Businesses must move towards close integration of their financial and sustainability reporting. That's when results come through faster. Image Credit: Shutterstock

The UAE recently charted a new course to safeguard our planet with the declaration of 2023 as the ‘Year of Sustainability’. This resolute step speaks volumes about the steadfast commitment towards environmental conservation, while playing host to the COP28 in November cements the nation’s position at the vanguard for sustainability.

Large enterprises and SMEs alike have incredible potential to advance the sustainability agenda, but many lack the expertise or capacity to do so. Companies that prioritize sustainability goals as part of their business plans reap long-term benefits, from gaining investor trust and positive public perception to driving improved financial performance.

Identify key stakeholders

To comprehensively evaluate your ESG impact, it is essential to gather insights from all relevant stakeholders. Map out key stakeholders internally from among the management and employees, as well as externally, including partners and suppliers.

‘Materiality’ assessment

Conducting a materiality assessment begins with determining which ESG areas are most significant to both the business and stakeholders, particularly those areas pertaining to day-to-day operations that align with corporate strategy. By conducting a preliminary outreach to key stakeholders, you gain an initial understanding of the main impact areas and visualize an initial mapping of those areas against the UN’s Sustainability Development Goals (SDGs).

Collect relevant data

Ensure key stakeholders have the resources needed to capture data tailored specifically for each area of impact. Use detailed templates, customised questions and guidelines to collect information related to potential SDG contributions from various divisions, based on the overarching impact areas identified in the initial outreach.

Gather numerical evidence as well as case studies where possible. This step will provide you with specific details about your organization’s impact on the Goals.

Analyze data

After collecting and scrutinizing the data, analyze it to discern tangible insights that can help fine-tune your initial mapping against the SDGs. Using these insights, you will be able to hone in on your impact areas.

Map impact areas

This is where the findings can be tabulated, revealing exactly how each aspect of your business is contributing to the SDG. Here, it is essential to ask yourself questions around your environmental impact: what is your brand doing to be a steward of the environment? How are you reducing carbon emissions, preserving biodiversity, improving air and water quality, combatting deforestation, or managing waste responsibly?

Reflecting on your brand’s social impact is also a necessary exercise. Ask yourself: what are you doing to improve lives and livelihoods? Are your people given the best opportunities for success, and how do you strive to involve external communities in your mission?

A commitment to transparency and accountability is essential for any brand. To ensure you stand strong in the future, consider what steps the organization has taken to ensure and maintain sound governance. Put policies and procedures in place that promote effective governance, such as a well-structured board of directors and audit committees? Do you have robust anti-bribery measures or incentives such as whistleblowing programs to support ethical decision making throughout your operations?

Develop your sustainability report

Write a sustainability report based on the ESG findings, including your CSR activities, governance framework and people management approach. Use sound judgement when selecting and ranking what areas of impact should be highlighted and against which SDGs.

Don’t succumb to superficiality by hanging your hat on as many SDGs as possible just to look good. Focus the reporting on the areas in which you truly make a difference.

Long-term ESG strategy

Develop an ESG roadmap for the next 3-5 years. Articulate specific targets per impact area and track progress to ensure each goal is achieved within the set timeframe.

Combine financial and sustainability reporting Unite your fiscal and sustainability initiatives by integrating annual financial performance reports with ESG reporting.