In recent months, many countries have experienced social unrest and various forms of civil unrest. These events can be attributed to several factors, including a lack of trust within society.
Organizations in both the public and private sectors are dealing with record low levels of trust, which remains a factor driving stakeholder actions across society. Building trust involves, among other things, presenting a holistic picture of the organization that goes beyond the numbers.
This includes analysing value for money, societal impact, and how the organisation lives up to its values. Essentially, for an organisation, this involves consistent behaviour or action and can be translated into doing what you say you will do, in line with the organisation’s values and brand promise.
A sustainability report provides a complete view of the organization, helping to build trust through transparency and a focus on results.
The means by which organizations can achieve this goal include:
First, through sustainability reporting, stakeholders can access information about how an organization operates, makes decisions, assesses overall performance, and enhances accountability. Even SDG 16, which aims to build strong institutions, recognizes the importance of providing access to information.
Beyond the financial aspect, organizations can demonstrate accountability to stakeholders with the story behind the numbers.
Second, results- and impact-oriented sustainability reporting can provide an organization’s stakeholders with unique information that enables them to assess value for money based on expenditure.
Organizations can provide data on the lives of those affected in the communities in which they operate, which has become vital for private sector organizations because these social issues affect private sector organizations as much as they affect public sector organizations.
Therefore, taking a proactive rather than reactive approach to stakeholder engagement is crucial for organizations to ensure they understand the demands of their stakeholders.
Third, sustainability reporting provides a mechanism for organizations to demonstrate their accountability to stakeholders by emphasizing the organization’s performance against its non-financial objectives.
Often, organizations are quick to report on their performance without the context of the specific objective, making such reports less relevant to stakeholders because they cannot reliably assess performance.
Sustainability reporting enables organizations to compare their performance against targets while providing information about trade-offs, for example, helping stakeholders understand the balance between economic development and environmental protection.
Akinyemi Odumila is a Partner with Deloitte East Africa. He is an author who writes and speaks widely on corporate reporting topics.
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