Proactive Planning: A Recommended Timeline for Your Sustainability Journey
To make the most of today’s frameworks, Position Green has developed a recommended timeline that can serve as a checklist and help guide corporate sustainability journeys.
Alignment amongst the top sustainability reporting frameworks is an important milestone in the transition towards a sustainable economy. It greatly benefits stakeholders across the spectrum by increasing comparability, reducing compliance burdens, improving data quality, and enhancing transparency and accountability. While this integration should make reporting simpler, it’s not always clear how companies should leverage these frameworks to develop a robust sustainability strategy.
Corporate sustainability teams are often lean, so it’s important to plan ahead and prevent burnout. Attempting to do everything at once (usually within one quarter) will prevent quality results. By following our recommended process, corporate teams can be more engaged throughout each stage and ensure that findings are actually integrated into the company’s overall strategy.
September – November: The Basics
Any sustainability strategy should start with an understanding of your company’s material topics. The adopted European Reporting Standards (ESRS) require companies to complete a double-materiality assessment. This ensures that organizations are focused on the sustainability impacts they have on the world in addition to the financial risks and opportunities that our changing ecosystems have on business. Completing this exercise before the start of Q4 ensures that material topics are at the forefront when developing next year’s corporate strategy. From here, companies should complete a risk assessment in line with TCFD and TNFD. Companies have a few options for this depending on their maturity with sustainability and which federal regulations they’re exposed to. A high-level risks and opportunities analysis may be the best fit for first timers, while a qualitative and/or quantitative climate scenario analysis is recommended for companies that are further along on their journey. TCFD serves as the backbone for global climate disclosure (everything from CSRD to CDP) and provides a blueprint for integrating climate-related risks into the corporate ERM process.
November – January: Crafting the Path Forward
As the year ends, companies can use this newfound information to perform a gap analysis. This will identify areas where the organization can improve its sustainability practices related to material topics, risks and opportunities. This in turn informs the sustainability strategy for the next year, as it clearly defines ways to reduce impacts, improve performance, attract and retain customers and employees, mitigate risks and improve bottom line, and comply with expected regulations. From here, companies should establish tangible targets to achieve their sustainability goals. Setting a science-based target through SBTi will encourage internal conversations around the company’s ambition levels and the pathways it can take towards decarbonization. Loosely defined targets don’t carry much weight and can come off as greenwashing. Use the down time of January to craft clear and realistic goals that will guide your strategy throughout the year.
January – April: Corporate Reporting Season
There’s been an increased push for the timing of sustainability reports to align with annual financial reports. It’s also more relevant to stakeholders if the sustainability report is published closer to its reporting year. While corporate fiscal years differ, those that follow the calendar year are advised to publish by April. Start by collecting last year’s GHG data to update a GHG Protocol-aligned inventory. Once this is finalized, companies can use all the data and information from the double materiality assessment, risks and opportunities analysis and GHG inventory to build the narrative around their achievements and challenges over the last year. With the outcome of the gap analysis and newly defined sustainability goals & targets, corporates can more clearly communicate their successes, areas for improvement, and roadmap for the coming year in their sustainability report. The best practice frameworks for these annual reports include Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB), which is now housed under the International Sustainability Standards Board (ISSB).
April – July: Voluntary & Mandatory Disclosures
With a comprehensive sustainability report complete, companies should be well prepared to disclose with any mandatory or voluntary framework. This timing also aligns well with CDP, which is released in mid-April and due at the end of July. To be considered for leadership points with CDP, companies must have clarity on climate-related risks and opportunities, an SBTI aligned target, calculated Scope 3 emissions, and a sustainability strategy that’s integrated into the corporate ERM. This exemplifies that the company is well positioned to manage and committed to reducing their sustainability impacts. Following Position Green’s timeline ensures that organizations are well positioned to transparently disclose their sustainability efforts and meet the growing demands of investors, customers, and other stakeholders.
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