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Challenges and opportunities of corporate SDG reporting
Time to move beyond assessing activities and outputs, and focus on disclosing outcomes and impacts
18 Feb 2021 | Camila Corradi Bracco

Since the launch of the Sustainable Development Goals (SDGs) in 2016, the role of the private sector in fulfilling the 2030 Agenda has been widely acknowledged, as set out under SDG 12. Yet to assess how companies are actually contributing towards these global goals, we need greater transparency on their impacts.

Over the past four years, Global Reporting Initiative (GRI) has championed the participation of companies in measuring their performance on the SDGs. As we look ahead to the Decade of Action needed to achieve the SDGs, it is clear that further progress will be needed, including doing more to increase private sector contributions.

Progress so far

At the end of 2020, the four-year Action Platform for Reporting on the SDGs from GRI and UN Global Compact concluded. This included a corporate action group (CAG) that connected business representatives in a peer learning platform, which successfully helped companies define and improve their SDG reporting.

Research on CAG participants revealed:

  • Increased clarity on how to engage with the SDGs from a business perspective
  • Improvements in how they measured SDG performance
  • Better prioritization of the most relevant SDGs
  • More integration of the SDGs into business decision-making processes.

However, the findings also indicate that many companies continue to face challenges with understanding and disclosing their SDG contributions, with opportunities to make corporate reporting more relevant and effective.

Improving data quality and addressing gaps

Reporting on priorities at the SDG target level, within each of the overarching goals, and linking them to the business strategy, is often missing. Overall, deeper connections between material topics with SDG targets and corporate priorities are needed. We also see there are opportunities to further explore the links between SDG priorities and the contributions of companies in the countries and jurisdictions where they operate.

Most importantly, corporate reporting on the SDGs often focuses on positive contributions that companies make to the SDGs, with a lack of transparency and accountability for negative impacts. This issue was also highlighted by KPMG research in December.

Reporting that has impact

Identifying SDG priorities throughout the value chain is a complex undertaking, as is demonstrating the cause-and-effect relationship between SDG contributions and business performance. Moreover, because of the interconnected and interdependent nature of the SDGs, companies need to identify and take account of synergies and trade-offs between positive and negative impacts.

Efforts to quantify impacts on the SDGs and contextualize them (for example, considering the social thresholds and planetary boundaries) need strengthened. That is why it is necessary to move beyond assessing activities and outputs, and focus on how to disclose outcomes and impacts. This is crucial as it enables businesses to manage their performance and demonstrate accountability for their impacts.

Making SDG reporting relevant to stakeholders

There is increasing interest from a wide range of stakeholders in how businesses can contribute to the SDGs, including how companies are aligning products, services and business strategy with the SDGs. Policy-makers, investors, consumers, labour organizations and civil society all increasingly demand that companies show transparency through providing quality data and balanced reporting.

However, different stakeholders have different expectations and data requests. Steps businesses can take to provide more strategic and relevant information include:

  • Providing aggregated or disaggregated information that allows stakeholders to assess their performance and contribution to the SDGs
  • Setting long-term SDG-related performance targets and regularly reporting on progress
  • Clearly demonstrating how the business strategy aligns with the SDGs.

Proactive communications on the issues that matter most – to both the company and stakeholders – is crucial. Not only does it provide the necessary information to assess corporate sustainability performance and impact, it also allow stakeholders to make decisions that contribute to the SDGs.

Driving business action through reporting

Inspired by the progress to date and the opportunities still to come, GRI is launching a Business Leadership Forum on corporate reporting as a driver for achieving the SDGs. This forum, to commence in March, will offer participating companies practical insights on sustainability reporting, focusing on how to raise the quality and strategic relevance of their reporting.

The forum is built around a series of online sessions that will bring together corporate reporters and representatives from key stakeholder groups – including the investment community, governments, regulators, members of the supply chain, civil society, and academia.

The experiences of the past four years have shown that both businesses and stakeholders benefit from strategic and relevant SDG-related information. Sustainability reporting is an essential driver of the transformational change that is required to achieve the SDGs. As we look ahead to the Decade of Action and the pandemic recovery phase, the case for meaningful corporate reporting on the SDGs is more compelling than ever before.

Camila Corradi Bracco is a senior coordinator of content development and programme delivery at Global Reporting Initiative.