I am a medium sized company, is Sustainability Reporting for me?

BY:
Alex Nichol

It’s not just the Unilever’s and Nike’s of the world to whom sustainability risks and opportunities apply.

Many smaller companies create and protect company and ‘stakeholder’ value by effectively managing sustainability impacts and communications. Some examples include Aurora Organic Dairy (USA, farming), Morgan Sindall (UK, construction), Knauf Insulation (Belgium, construction materials), Halba Chocolates  (Switzerland), Du Telecom (UAE), JSR Micro Inc. (USA, electronics), Viridor (UK, recycling) and Impahla Clothing  (South Africa, apparel and footwear).

In the EU there are various definitions of Small and Medium-Sized Enterprises. Some mean that quite large companies are within the SME bracket (e.g. up to 4,999 employees in France). Usually, though, a medium-sized enterprise ends up being one with about 250-1,000 employees or fewer, with a turnover up to 50m euros. The small or micro-enterprise is the level down in scale (typically fewer than 250 and 50 employees respectively). Collectively they all makeup more than 90% of businesses worldwide and on average account for 50% of the Gross Domestic Product (GDP).

Managing risk

By tackling reporting the companies above are taking the first steps to managing the wider risks and issues that affect their business. Other operational approaches include strategy development, community engagement, supply chain management, and third party assurance. In the UK, SMEs account for approx. 99% of all businesses, but only 4% complete a sustainability report. We can also note here that enterprises in the UK with a turnover of at least £36m must, from October 2015, comply with the UK’s Modern Slavery Act. It requires them to report steps taken during that year (policies, process, training, etc.) to ensure that slavery and human trafficking are not taking place in any of its supply chains, and in any part of its own business.

Customers of companies and brands want to engage with responsible companies, regardless of how big they are. Sustainability reporting can be an excellent way to help financiers make positive decisions about financing SME business growth.

A clear Sustainability Reporting process can generate reliable, relevant and standardised information on your sustainability impacts and performance. Key relevant issues (such as modern slavery) can be included within it. There are internal benefits such as management systems and employee engagement. There are external benefits such as market recognition and reputation.

How to get started

You get started by preparing who will lead the task, organising ‘content owners’, deciding which standard to use (such as GRI G4) and securing a broadcast directive from the boss. Then you call your stakeholders about their perspectives on your key issues to cover in the report. Then decide what to put in your report on what matters, where it matters, and what performance measure to use (indicator). There are free tips peppered through the Internet on how to do all this, so don’t despair if you find it daunting.

Once you have the content planned and raw material coming through you can start writing. It’s good to follow established principles of Reporting such as completeness and accuracy. Just make sure you tackle it in a structured manner. And write it so the report can be used for various purposes such as customer engagement and sales.

The Global Reporting Initiative also publish Ready to Report?, a free introduction for SMEs (from www.globalreporting.org), and you could buy a recent book by our friends at BeyondBusiness called Sustainability Reporting for SMEs published by DoSustainability.

If, however, you would like AB’s support based on over 15 years of reporting experience, along with our specialist reporting associates, then please contact us

Alex Nichols, Senior Sustainability Reporting Consultant

With more than 60 sustainability reporting related projects under his belt since 2001, Alex has a solid, 20-year experience of international sustainability projects for the business. His experience also includes strategy, stakeholder engagement, assurance, and training delivery.

He is very experienced in materiality, GRI guidelines, report strategy, engagement and copywriting.

Alex has worked in various sectors: automotive, construction, mining & metals, paper & pulp, waste, energy, food & beverage, rail, tobacco and manufacturing. He has a strong international experience and has managed successfully industrial, NGO and government projects in Europe, Turkey, Brazil, Jordan, Malawi, UAE and Australia.

Clients include General Motors, AB-InBev, IndoAgri (palm oil), JTI (tobacco), Nationwide Building Society, Cathay Pacific, Rio Tinto, Tate & Lyle, Emirates Integrated Telecommunications, Aperam and APP.

On training services, Alex has also delivered upward of 20 multi-day IEMA-Certified Training Courses since 2004; featuring highly interactive facilitation of dynamic international groups.

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Author: Alex Nichol

Alex Nichols, Senior Sustainability Reporting Consultant, Director ANCL and Associate Director Paia Consulting. Alex works with AB on reporting projects. To take advantage of AB’s support based on over 10 years of reporting experience, along with our specialist reporting associates, then please do get in touch.

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