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Sustainability Statements

Sustainability statements – like financial statements – are important for public accounting and accountability. Their purpose is to provide a comprehensive picture of the impact of a company’s operations on the environment and society, including value created or eroded that may not be captured in financial performance information.

Guidance for reporting on Sustainability Statements

The purpose of sustainability statements is to answer the following information needs:  

01
Mitigation of environmental and social impact

Sustainability statements provide consistent and comparable accounting for the company’s main environmental and social footprint. It allows comparison of performance over time and with peers.

02
contribution to sustainable development

Sustainability statements also provide  an account of company’s contribution to broader societal and sustainability goals (e.g., Sustainable development Goals, Paris Climate Agreement).

Suggested Metrics For Sustainability Statements

Sustainability statements should include metrics that characterize performance on material issues, including:

  • Generic sustainability issues applicable to most industries, and
  • Specific issues based on industry, business model, or physical location.

Quantitative information on on sustainability performance can also help investors measure the financial impact of sustainability (extra-financial analysis).

examples of sustainability metricsESG and extra-financial analysisinitiatives for convergence of ESG Metrics

Examples of sustainability metrics

Consult this resource for examples of metrics for Sustainability KPIs and Statements, including:

  • Most common ESG Metrics [here]
  • Emerging market-focused E&S metrics [here]
  • Industry-specific ESG metrics [here]

ESG and extra-financial analysis

Extra-financial analysis consist in identifying and tracking performance on sustainability issues that have a material impacts the operational and financial performance of the company.

initiatives for convergence of ESG Metrics

Consult this resource for a list of recent initiatives aiming at convergence of ESG reporting standards and standardization of sustainability metrics.

Examples Of Reporting
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Sustainability Performance Summary AkzoNobel Report2019

Sustainability Statements—Royal DSM Sustainability Report 2019

Workplace Metrics—MTN Group Limited Sustainability Report 2019

Non-financial Summary—Westpac Group 2019 Annual Review & Sustainability Report

Statement of Social Performance—Novo Nordisk 2019 Annual Report

Links Between ESG And The SDGs

Companies should measure and report their impacts in relation to the Sustainable Development Goals (SDGs). SDG target 12.6 “encourage(s) companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle.” Governments are required to report the numbers of sustainability reports submitted on an annual basis, as required in SDG indicator 12.6.1.

The following SDGs lend themselves naturally to private-sector contributions:

  • SDG 3:   Good health and well-being
  • SDG5:   Gender Equality
  • SDG7:   Affordable and clean energy
  • SDG 8:   Decent work and economic growth
  • SDG 12:   Responsible consumption and production
what investors think?Sustainable finance applicationlink esg with sdgs targets and indicators

What investors think?

Accountability of companies’ contribution to the SDGs is consistent with a rising interest among investors to understand sustainability performance in the context of broader social and environmental outcomes.  According to a publication on Investing with SDG Outcomes by PRI, achieving outcomes in line with the SDGs requires collaboration on tools to contextualize outcomes data in the global thresholds and timelines required to achieve the SDGs.

Sustainable Finance Application

  • Performance Disclosure and Sustainable Finance [here]
  • Example of SDG Aligned Index and Investment Fund [here]

Link ESG with SDGs targets and indicators

Consult this resource for a list of SDG targets and indicators that are relevant for business [Here]

Examples Of Reporting
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Summary Performance on SDGs SSE Sustainability Report 2020

Summary Performance on SDGs SSE Sustainability Report 2020

Contribution to Communities Telefonica Consolidated Annual Report 2019