ACCA holds discussion on sustainability reporting

ACCA with its 15 year record in championing transparency and accountability in relation to sustainability issues,held a discussion recently at the Cinnamon Grand on the topic of Sustainability Reporting –the transparency revolution .

The keynote speaker at this occasion was Santhosh Jayaram Head of Sustainability   and Business Excellence Services (South Asia) for Det Norske Veritas  ( DNV)  which is  an independent foundation with the purpose of safeguarding life, property, and environment.

Jayaram has worked in the field of Climate change since 2004 and has validated Clean Development Mechanism (CDM) Projects in various countries for registration with UNFCC. He has also been instrumental in developing the Extra Financial Risk Rating of DNV in Asia that includes risk related to governance, environment, social, employee and ethics.

Holding a masters in Environmental Science and Engineering from IIT Mumbai and having recently completed a course on sustainable technologies at University of California, Berkeley Campus , his current position serves to encompass three verticals of Sustainability, Risk Management and Supply Chain  Related Services.     

Speaking of the important role that sustainability plays in today’s context,   Jayaram stated,” Sustainability is the strategic outlook which will make the corporate excel by following emerging trends in society, natural resources and technology.”

He explained that “Integrating sustainability concepts into core business functions enables businesses to become more nimble in a fast-changing world.   Customers want it, it increases the bottom line, improves employee morale, attracts and retains talent, Improves operational efficiency, reduce risks and it is good for the environment.”

Jayaram affirmed that “Leaders pay a great role this evolution. As leaders they should be like great sailors of the past who discovered new lands. They must point to the destination with a direction. The able crew will figure out. As leaders in charge of this evolution, they must be open for discovery and risk.”

He added that “Business leaders must  evaluate  new markets, new products and  rethink long-held strategic assumptions in terms of sustainability to challenge decades of conventional wisdom to drive organizational change  and innovation. Such thinking can improve business reputation , create brand differentiation, capture industry synergies with other sustainable businesses ,  reduce business cost ,  lead your industry in Best Practices , improve  stakeholder engagement  and be able to  respond to consumer eco-preferences .”

.Jayaraman outlined examples of organizations such as IBM ,GE, Marks and Spencer  and Wal-Mart who have adopted such initiatives in their overall operations.

He pointed out that “The first thing to do is to start. When confronted with something as important as sustainability, there is no time to waste. Leaders need to convey a sense of urgency. Actions will express this; talk by itself will not. Visible and tangible actions and a spirit of urgency will infect an organization and are necessary ingredients to any real change.”

Jayaraman went on to say “ Just as soon as they start, leaders need to communicate the importance of the change they are advocating. There can be no doubt that this change is critical to the future success of the organization and the world at large and it is an extremely high priority. In addition, they have to create an enabling environment for the change to take place in their organization. Any other organizational objectives need to adapt to support the change and certainly not conflict with it.

Elaborating further Jayaram explained “leaders must listen to key stakeholders and consider their point of view when making decisions. They should also understand which of the key sustainability issues present the most amount of risk to businesses and prioritize them above all the myriad issues that companies have to respond to. Clearly articulated goals to meet these needs are important, and the leader needs to communicate these goals frequently. It is critical to understand the importance of both long- and short-term goals. Long-term goals need to be audacious and passionately communicated by a leader whilst   short-term goals must be visibly achievable, quantifiable, and realistic. The leader needs to have the courage to be visionary while at the same time remain pragmatic and demand accountability.”

 “With governance and sustainability being  increasingly critical to organizations, business leaders and professional accountants must recognize the importance of incorporating environmental, social, and governance factors into all functions and processes—from strategic planning and goal setting, to external communications and reporting,” Jayaram added.

He added that “There is a widely established expectation that companies wanting to obtain a leadership position and become competitive in the global marketplace , need to effectively manage their environmental and social performance, disclosing challenges and achievements in a sustainability report.  . Studies indicate that there are a variety of reasons for companies to release a sustainability report. Often-heard factors are Reputation enhancement, building trust and confidence among broader stakeholders, , improving risk management, attract talent, and stimulating corporate innovation. He said “that more recently  , mainstream investors have begun to take note of the impact of sustainability and are seen to include environmental and social assessments in their investment analysis.”

Jayaram also mentioned that according to the GRI ( Global Reporting initiative ) framework , it features Performance Indicators and Management Disclosures that organizations can adopt voluntarily, flexibly and incrementally, enabling them to be transparent about their performance in key sustainability areas.

Ideally, on each issue, companies should report on their strategy, management procedure and performance. Some companies are now starting to extend this to impact disclosure.

A sustainability report Jayaram said is therefore of value to both an issuing company and society. Publishing a first sustainability report can be relatively resource intensive for a company, but, if internal capacity is built, the process can become much less costly in subsequent years.

 He concluded by saying “The evolution has already begun; early movers have adopted sustainability as “the way they do business”. The choice is whether any corporate want to enter early, reap benefits, capture virgin opportunities and start celebrating.”