SustainAbility today launched a tool to help companies improve transparency in their sustainability reporting. Effective corporate transparency is an important element of sustainability leadership. And yet, to date, it has largely focused on sustainability reporting, which is somewhat stalled when it comes to driving impact. Most companies are not gaining the value  commensurate with the resources spent on reporting.

SustainAbility sees a pathway through which transparency can drive better decision-making, improve corporate performance, and ultimately compel and enable companies to create a sustainable future. We explore this pathway in greater depth throughout this report.

While non-financial reporting and transparency efforts have brought numerous benefits to companies over the past two decades, there is a tremendous opportunity to gain more strategic value and to better reap the benefits of managing, collecting and sharing sustainability data and stories. In order for transparency to instigate change, however, we believe companies must progress efforts on three critical and interconnected transparency elements: materiality, valuation of externalities and integration. These three elements are the best levers available today to enable companies to significantly improve the impact of their reporting. Far beyond reporting, emphasis on and application of these three elements will help sustainability professionals gather the most critical information and use it to make more informed, strategic decisions that lead to improved business performance, including value creation in the environment, society and the economy. The elements are summarized as follows:

  • Materiality: A focus on gathering and providing information on the most material issues enables companies to refine their sustainability strategy, integrate material issues into the company’s larger corporate strategy and tighten reporting efforts to better communicate to stakeholders on the most critical issues.
  • Externalities: Having identified the most material issues, a company can begin to measure externalities relevant to these issues. This data empowers companies to fully understand and communicate their role in creating value in the environment, society and the economy.
  • Integration: Having prioritized the most strategic material issues and accounted for the externalities related to them, a company can use this information to better integrate sustainability into corporate strategy. True integration enables companies to leverage their business model for sustainable value creation.

To provide practical guidance in the application of these ideas, SustainAbility launched a Transparency Advancement Tool in this report. The tool illustrates how materiality supports externalities valuation, and then how those two elements in combination support the integration of sustainability information into decisionmaking and core strategy. With better decisions based on material, thorough information, the company is well-positioned to realize improved performance and positively contribute to society.

Along with this tool, which guides companies to more impactful transparency, SustainAbility presents the current state of activity as it relates to materiality, externalities and integration, as well as case studies of strong corporate practice.

Download the report (pdf)