CHAPTER 1

• Sustainability/Sustainable Development


  Development that meets the needs of the present without compromising the ability of future generations to meet their own needs
• Two key concepts of sustainable development


  • Concept of needs - In particular the essential needs of the world's poor, to which overriding the priority should be given
  • The idea of limitation - Imposed by the state of technology and social organization on the environment's ability to meet present and future needs
• The World Commission on Environment and Development: 'Sustainable development is not a fixed state of harmony, but rather a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development, and institutional change are made consistent with future as well as present needs.'
• The World Business Council for Sustainable Development's three pillar model


  • Social performance - Reflects an org's impact on people and social issues
  • Environmental performance - Relates to the natural resources consumed in delivering products and services
  • Economic performance - Continues to include financial performance but will increasingly reflect an organization's wider impact on the economy
• ESG (Environmental, Social, and Governance)


  Used extensively by the investment community, reflects the view that managing environmental and social topics is a governance issue for organizations, a proxy for the quality of their management teams, and a process to assess whether they are positioned for long-term success
• ESG components


  • Environmental - Encompasses how a company is exposed to and manages risks and opportunities related to climate, natural resource scarcity, pollution, waste and other environmental factors
  • Social - Includes information about the company's values and business relationships
  • Governance - Incorporates information about a company's corporate governance
• Sustainability reporting vs financial reporting


  • Emphasis in financial reporting - Time scale: The reported year, Focus: Issues that organization directly, Economic view, Data: Financial, Materiality: Financial significance, Users: Shareholders and investors
  • Emphasis in sustainability reporting - Time scale: Future orientation, Focus: Wider sustainability impacts, Economic view: Material and Intangible, Data: Financial and Non-financial, Materiality: Any information that is significant to readers, Users: Stakeholders
• Market drivers for sustainability reporting


  • Commitment Formers (Creating demand)
  • Sustainability Reporting framework providers (Creating structure)
  • ESG Rankings, Ratings, and Indexes (Comparing and Benchmarking)
  • ESG Research Providers
  • ESG Aggregators and Disseminators
  • Consultants, Auditors, and Data management providers
• Intended users of sustainability reporting


  • Corporate Customers
  • Investors/Lenders
  • Employees
  • Communities
  • Advocacy Media Groups
  • Regulators/Gov Agencies
  • Suppliers/Business Partners
  • Industry Peers and Influencers
• Internal benefits of sustainability reporting


  • Effective Management of sustainability, risks, and opportunities
  • Sustainable vision, strategy, and business plans
  • Improved Management Information System
  • Motivates workforce
• External benefits of sustainability reporting


  • Investor attractiveness
  • Improved branding
  • Stakeholder engagement
  • Competitive advantage
• The first step is to identify the problem.
• The second step is to gather information about the problem.
• The fourth step is to develop solutions based on the analysis done in the previous step.
• The third step is to analyze the data gathered from the previous steps.
• The fifth step is to implement the solution developed in the previous step.
• The sixth step is to evaluate the effectiveness of the implemented solution.
• The seventh step is to communicate the results of the evaluation to stakeholders.
• The eighth step is to monitor progress towards achieving the goal or objective set at the beginning of the process.
• It serves as a roadmap for achieving success by providing a clear direction and guiding decisions.
• The eighth step is to document the entire process, including any lessons learned or best practices identified during the project.
• A business plan is a document that outlines the goals, strategies, and financial projections of an organization or startup.
• Business plans are essential tools for securing funding, attracting investors, and communicating your vision to stakeholders.
• The ninth step is to document lessons learned throughout the problem-solving process.
• The ninth step is to close out the project by completing all necessary documentation and archiving relevant materials.
• A well-defined plan helps individuals stay focused on their goals, prioritize tasks, allocate resources effectively, and make informed decisions.
• The tenth step is to close out the project by completing all necessary documentation, archiving materials, and transferring knowledge gained during the project to other areas within the organization.
• A business plan is a written description of your company's future, product lines, marketing strategies, financial projections, management team, competitive analysis, etc.
• Setting SMART (Specific, Measurable, Attainable, Relevant, Time-bound) goals can increase motivation and focus.
• A problem-solving approach involves identifying problems, analyzing them, developing solutions, implementing those solutions, evaluating their effectiveness, communicating the results, monitoring progress, and documenting the process.
• Problem solving is an iterative process that can be applied to various situations, from personal challenges to organizational issues.
• The first step in developing a successful business plan is conducting market research.
• Best practices refer to proven methods or techniques that have been successful in similar situations.
• Goals are specific statements that describe what an individual wants to achieve or accomplish.
• Primary research methods include surveys, interviews, observation, and experiments.
• Intended users of sustainability reporting


  • Corporate Customers
  • Investors/Lenders
  • Employees
  • Communities
  • Advocacy Media Groups
  • Regulators/Gov Agencies
  • Suppliers/Business Partners
  • Industry Peers and Influencers
• Corporate Customers


  Every sector now ask their suppliers to provide information on ESG policies
• Investors/Lenders


  An important audience for sustainability reporting with the market size for "sustainable investments" seek to divest from companies

  based on negative mkt perceptions
• Employees


  • Also now a leading topic of interest among the newest generation of employees entering the workforce
  • 96% of millennials look for an employer that is environmentally aware
• Communities


  Where an organization has a significant presence are also potential audiences for sustainability reporting

  interested in knowing an org is responsible and

  strives to make a positive impact