Sustainability--whether from the planet or people perspective--is not just the responsibility of one person, one team, or one function alone. It is everyone's business because sustainability affects all of us as consumers, investors, employees, and members of the community.
A week ago, I had the honor of speaking at Beacon for the second time this year. During the session, I touched on the trends, brought on by the COVID-19 pandemic, that are impacting the workforce, and another trend soon to be keeping many reporting teams busy—disclosure of stakeholder capitalism metrics, which I also mentioned in The Altruistic Capitalist.
The initiatives underway by international reporting standard authorities to align standards, and by regulators to mandate disclosure, will bring consistency and nudge companies towards building businesses for the long term. Reliable data enable business leaders to communicate their priorities consistently to both internal and external stakeholders. Commitment and accountability follow what we track and measure.
I believe the approach is a step in the right direction, and caution that this can’t be one-size-fits-all. Additional reporting requirements may burden some businesses more than others from a cost perspective. Reporting teams will need to consider what tools, systems, and processes should be set up or adjusted to ensure that the data is reliable and insights can be extracted to make more accurate business decisions. You get what you put in—garbage in, garbage out.
Even with reporting requirements, there is still the potential for white- or greenwashing. Some may choose to conceal or fudge their numbers to appear more favorably. For instance, gender pay gap reporting could be cut and sliced into base salary, bonus, and benefits, and to exclude certain categories of employees, so a smaller gap is reported. This eschews the intention of reporting and accountability. In the end, with social media and employee empowerment, the truth will come out.