Investors and other stakeholders are influenced by a company’s reputation and the respect and trust it has earned. Reputation rankings published in business magazines are frequently based, partly, on publicly available sustainability information.
As a consequence, there are always concerns about how much a company’s reputation might be damaged by public disclosure on potential risks or bad news, and the natural instinct is for organizations to avoid such disclosure. However, reporting both good and bad news can build trust and respect Tweet This!. Stakeholders are more likely to give a company the benefit of the doubt if the company is honest and open about its performance, even if it is not very good.
Experience shows that dishonesty about a company’s weaknesses, which in the current context of worldwide, instant digital connection may be revealed through many communication channels, tends to damage a company’s reputation more than the open and honest treatment of weaknesses in a sustainability report.
Companies found that sustainability reporting often helped achieve better stakeholder relations and increased trust, which in turn leads to other advantages:
• Increasing market share
• Gaining improved access to capital, and a lower cost of capital
• Enhancing community license to operate
• Streamlining regulatory approvals
According to Francisco Ravenna, Agronomist, Viña Huelquén Ltds, Chile (SME), “when we report we can show the quality of our products and services, improve the image of the company and gain reputation.”
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