Reporting

Sustainability issues such as climate change and the over-consumption of the Earth's finite natural resources - increasingly living off the Earth's capital rather than its income - are challenges that are likely to lead to major changes in the way we live and work, in our economic model and in the level and type of government regulation.

In the face of this "sustainability revolution", it is increasingly important for organisations to understand how such issues will impact on their continuity and long-term success, and to be able to communicate clearly both the impacts and the company's response to investors and other stakeholders. It is only through the integration of environmental and social factors into business and management reporting that the fundamental connection between strategic direction, financial performance and sustainability impacts will be made clear.

External corporate reporting has evolved from the simple financial reporting of profits and losses, assets and liabilities, to give more information about how organisations are managed and conduct their business. This change has embraced information on governance as well as non-financial information on environmental and social performance.

In parallel, a separate strand of reporting has emerged under the "Corporate Social Responsibility" (CSR) or "sustainability" banner, which, as well as environmental impacts, can cover corporate relationships with employees, their health and wellbeing, relations with local communities, working conditions in the supply chain, transparency of business dealings, and anti-fraud and anti-corruption behaviour.

The challenge is to ensure that sustainability information is included in mainstream reporting and is strategically important so that it forms part of the decision-making process of the business. This differs from much of the current corporate responsibility reporting which is not connected with the business and its strategic thinking.