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Sustainability Reporting in the Era of ESG: Best Practices and Emerging Trends 

by Guaranga Das Prabhu Global Commons Oct 25th 20237 mins
Sustainability Reporting in the Era of ESG: Best Practices and Emerging Trends 

Sustainability reporting is becoming an increasingly critical tool as organisations strive to navigate this new landscape shaped by environmental, social, and governance (ESG) factors. In this article, we take a look at ESG considerations and best practices in sustainability reporting.

A Brief History of Sustainability Reporting

Over the years, sustainability reporting has evolved significantly. Financial performance reporting was initially the primary focus of organisations. There was, however, a shift towards a broader perspective as a result of growing environmental and social concerns.

Sustainable reporting has a long history, dating back to the 1970s when companies first publicly disclosed their environmental impacts. As a result, subsequent milestones were established, such as the Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP). Standardising sustainability reporting frameworks facilitated transparency and comparability.

ESG Factors: An Overview

ESG, or Environmental, Social, and Governance, refers to three key dimensions through which organisations are evaluated. Among environmental factors are carbon emissions and resource consumption. In addition to labour practices, social factors also include engagement in the community and the company’s impact on society. A corporation’s governance structure, board composition, and ethics are among the factors that contribute to its governance.

Best Practices in Sustainability Reporting

A commitment to responsible and transparent business practices can be ensured through the following best practices, which makes sustainability reporting more than a box-ticking exercise. A wide spectrum of topics should be included in a sustainability report, such as environmental impacts, social initiatives, and governance practices. 

Recognised sustainability reporting frameworks such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and Integrated Reporting Framework should be used. As a result, the reports are more consistent and comparable. 

Data sources, methodologies, and limitations of data collection should be disclosed in order to ensure data accuracy and transparency. Forward-looking information about sustainability targets, goals, and strategies in addition to historical data, should be included. Performance metrics with benchmarks and comparisons to peers in the industry should be contextualised. Qualitative narratives to support quantitative data should be used, in order to explain the sustainability journey of the organisation, the challenges it has faced, and strategies it is working on to improve sustainability. 

Sustainability data should also be verified by independent auditors or experts. Sustainability reports should be used to demonstrate how the organisation’s long-term goals align with its sustainability goals and it should be reviewed and improved on an ongoing basis. Transparency and accountability should be established by soliciting feedback from stakeholders.

Emerging Trends in Sustainability Reporting

Sustainable reporting is evolving to meet emerging trends as the world grapples with pressing global challenges. Organisations are realising the need to take sustainability reporting beyond traditional boundaries. Community engagement and diversity metrics are becoming increasingly important for understanding societal contributions and managing social risks. New technologies like blockchain and artificial intelligence (AI) are improving data transparency and enhancing ESG trends analysis, boosting the accuracy and efficiency of reporting. 

Product life extension, reuse, and recycling initiatives, such as reporting on circular economy initiatives, are gaining popularity. Increasingly, organisations are reporting how they align with sustainable finance principles and issue green bonds or loans backed by sustainability. Reporting is expanding to include the entirety of an organisation’s supply chain, including efforts to ensure ethical labour practices, responsible sourcing, and material traceability. With the advent of impact investing, companies are reporting on the social and environmental benefits they have gained from their investments. 

Organisations are increasingly reporting on their efforts to restore soil health, enhance biodiversity, and combat land degradation through regenerative agriculture and land use practices. Reports on sustainability are being aligned with the Sustainable Development Goals (SDGs), demonstrating how their actions contribute to the SDGs. Businesses are conducting climate risk scenarios analysis in response to investor and regulatory demands and reporting potential financial impacts of climate scenarios. As consumers seek trustworthy information on products, eco-labels, and certifications are being used more frequently to indicate environmentally friendly and sustainable products.

More on the topic: There’s Growth in Sustainable Investing – But Are the Benefits Worth It?

Case Study: Govardhan EcoVillage, A Beacon of Sustainable Reporting Excellence

A remarkable testimony to sustainable living and reporting can be found in Palghar, Maharashtra, India, where the 100-acre Govardhan Ecovillage (GEV) is located. Ecovillage’s sustainability reporting is a benchmark in the field. In order to disclose comprehensively, the community covers a full range of ESG issues. Through this approach, stakeholders can gain a comprehensive understanding of GEV’s sustainability journey, which extends far beyond mere compliance.

A Platinum Certification from IGBC Green Village Rating affirms GEV’s commitment to eco-friendly practices. Providing an example of sustainable architecture and construction, the community serves as a living laboratory. Govardhan EcoVillage has implemented several notable sustainability practices. The practices include segregating household waste into recyclable, biodegradable, and e-waste categories. 100% of food and garden waste is composted at the community level, reducing waste and benefiting the environment. 

Furthermore, GEV has harnessed rainwater runoff and diverted it into reservoirs with a capacity exceeding 75% of the total runoff, promoting water conservation. Water resource management is also enhanced by using at least 25% of treated wastewater for various applications. As part of their commitment to eco-friendliness, GEV produces sustainable products such as organic goods, incense sticks, pickles, and paper bags. Among the community’s green innovation initiatives are Rural Development Cells, women’s empowerment programs, agricultural and water resource development projects, as well as employment generation opportunities.

What’s more, GEV’s commitment to resource efficiency and sustainable building practices has earned it a five-star rating in GRIHA, a prestigious award. The achievement proves that GEV is committed to reducing its environmental footprint while maintaining a high standard of living for its residents. The Govardhan EcoVillage (GEV) is committed to sustainable construction practices. As part of the construction contract, contractors are required to prevent air pollution, emphasising their commitment to minimising environmental impacts. By conserving potable water during the construction phase, GEV ensures that this resource is preserved. GEV’s energy efficiency efforts are evident in their buildings’ impressive energy performance, with energy consumption reaching only 40% of benchmarked figures. 

Over 70% of the required annual energy is sourced from renewable sources for hot water. Further, GEV provides hygienic waste storage for segregated waste, as part of its waste management strategy. As part of their commitment to sustainability, all composite wood products are free from urea-formaldehyde resins, which contributes to a healthier indoor environment. Using insulation, refrigeration equipment, and fire extinguishers free of harmful substances like CFCs and HCFCs, they minimise ozone depletion. A green supply chain policy underlines GEV’s commitment to responsible and sustainable practices across all aspects of its business.

The Govardhan EcoVillage (GEV) represents sustainable living, embodying all 17 SDGs. A wide range of initiatives contribute to each of their goals through their multifaceted approach.

GEV empowers over 8,000 farmers with organic agriculture and animal care, benefiting over 1,500 families (SDG 1). They combat hunger by distributing 1.1 lakh meals for free during the COVID-19 pandemic and over 700,000 meals each year (SDG 2). A number of health camps, 100,000 treatments, and 5,500 cataract surgeries are offered to support community well-being (SDG 3).

Over 9,000 students are enriched by STEM classes, Gurukul education, and sustainability programmes (SDG 4). 300+ women-led self-help groups promote gender equality, benefiting 12,000+ families (SDG 5). Approximately 850 lift irrigation beneficiaries, 5,500 drinking water beneficiaries, and 1,050 customised irrigation beneficiaries benefit from clean water and sanitation solutions (SDG 6).

Using 350 KW of solar power, off-grid operation, and biogas generated from 3,600 kilogrammes of cow dung (SDG 7), the facility achieves energy sustainability. Economic growth is realised with a 50% income increase, training and placement of over 1,080 tribal students, and India’s 3rd Largest Skill Center spanning 70,000 square feet (SDG 8). Water recycling, rainwater harvesting, and green buildings are examples of the innovations GEV embodies (SDG 9).

More than 9,000 students benefited through STEM classes.

Through ecotourism, the community bridges urban and rural populations, earning the UNWTO Award (SDG 10). A sustainable community consists of 12 forests, 7 temples, a biodiversity park, COB mud houses, and organic compost (SDG 11). Govardhan Yoga, Ayurvedic treatments, and their own-label Sattvic and A2 milk products promote responsible consumption and production (SDG 12).

GEV organises Nexus Conferences, participates in flood relief programmes, and raises awareness through cultural events (SDG 13). Biopesticides, bio-fertilisers, vermicompost, and plastic treatment are used to protect life below water (SDG 14). In addition, they conserve indigenous species, plant trees, and provide shelter for wildlife (SDG 15).

They are committed to cultivating a harmonious community with equity for all, as reflected in SDG 16. As part of their efforts to achieve sustainable goals (SDG 17), they collaborate with more than 100 stakeholders, including ministries, embassies, corporations, NGOs, and think tanks. The multifaceted approach taken by GEV to these SDGs demonstrates their commitment to holistic community development.

There are many challenges to sustainability reporting, including data accuracy, overload, and greenwashing. It is difficult to reconcile short-term financial goals with long-term sustainability due to a lack of universal standards. Taking care of these issues is crucial for credibility.

Sustainability reporting should follow best practices in the ESG era. As regulations tighten and investor expectations rise, it is more important than ever to provide transparent and meaningful reporting. Sustainability reporting is reshaped by emerging trends such as climate reporting, social impact measurement, and technological advances. By adapting to the changing environment, organisations can manage risks, seize growth opportunities, and benefit society as a whole.

More on the topic: ESG Investing in 2023: A Rising Trend Amid Greenwashing Concerns

Tagged: esg

About the Author

Guaranga Das Prabhu

A member of ISKCON’s Governing Body Commission, he is actively involved in enhancing leadership effectiveness and governance of temples and communities globally. Owing to his expertise of presenting Vedic Knowledge in a contemporary and enticing way, he has spoken in TEDx events and corporations like Intel, Salesforce, Google etc. He has shed light on the importance of sustainable development and CSR activities. He is the Director, Strategy & Communications of Govardhan Eco Village- International Society for Krishna Consciousness. The eco- village is a testament to the powers of Ayurveda, Yoga and Meditation to bring about transformative change. Led by the principles of humility and sustainability their mission is to serve and propagate the benefits of India’s age old traditions to the whole world.

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