Understanding the relationship between everyday activities and economic, environmental and social issues, listening to stakeholders to choose “material” aspects and decide on the report’s focus, comprehending how an organization is dealing with sustainability issues, checking if the management tools and indicators are capturing and monitoring them adequately, etc., allow an organization to idenify its strengths and weaknesses.
Organizations that know their strengths and weaknesses are better able to survive in today’s interconnected societal context and demanding business environment.
Out of the whole reporting process, this may be the most valuable advantage for managers, as a fundamental reference point from which to plan and project the organization’s development.
When an organization is able to use this capital in the reporting process too, it is in a much stronger position to build a good reputation and improve its overall performance. As a consequence, opportunities for dialogue on concrete points for action will increase, both internally and externally. Such dialogues can produce much more productive results than the usual general, unfocused ones.
The reporting process provides, for companies, early warning of trouble spots, and shows up unexpected opportunities. These discoveries can help management assess possibly damaging developments before they emerge as unwelcome surprises, or take advantage of opportunities before the competition.
Occasionally an organization discovers, during the reporting process, that some aspects generally considered very well managed are in fact not; this could threaten the organization’s reputation. It is also common to identify critical aspects which were never considered for monitoring.
According to Håkon Nordang, Senior Advisor, Social Responsibility, StatoilHydro, Norway, “sustainability reporting is an essential part of knowing your organization Tweet This!—its key risks, challenges and opportunities—and provides crucial insights into the long-term viability and value-creation potential of the company …”
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