Sustainability reporting can go beyond simple compliance to provide companies with insight into clear opportunities and risks, according to a leading expert.

Speaking as part of a special panel convened to examine the strategic integration of sustainability reporting, Alice Strevens, director of human rights and social impact at Forvis Mazars, says companies should use sustainability reporting as a moment to think long term about their organisations.

“A lot of boards are used to thinking in the short to medium term but when you need to think about sustainability and policies, actions and targets related to sustainability, you need to start thinking over the longer term to understand how your investment initiatives that align with your strategy will pay off.

“That is a complex piece of work to conduct, but it’s something that different functions—whether its enterprise risk management or finance—need to get involved with to really understand how this is benefiting the business, enabling us to identify and act on risk, and identify and act on opportunity.”

Sustainability reporting has become an ever more pressing concern as jurisdictions around the world move to mandatory reporting.

Regulatory progress

In the UK, Taskforce for Climate-related Financial Disclosures (TCFD) reporting is mandatory for many companies but regulators are in the process of green-lighting new UK Sustainability Reporting Standards (UK SRS), while the EU is currently in the final stages of overhauling the European Sustainability Reporting Standards (ESRS).

Elsewhere, new reporting standards from the IFRS Foundation, known as S1 and S2, have been adopted, or are in the process of being adopted, by 40 jurisdictions around the world.

The webinar, presented by Board Agenda in association with Forvis Mazars, examined the way boards are able to balance compliance with strategic integration of the new standards.

Compliance is costly and requires training and can become the main focus of many companies, but the process can produce more than meeting the needs of regulatory requirements.

Another panellist, Tina Mavraki, a strategic adviser to the Centre for Climate Engagement and founder of the consultancy Ingenios, echoed a belief in the strategic value of sustainability reporting to companies.

“The fantastic work that the sustainability community has done has set the frameworks.

“Now it’s down to what does this mean for risks, our opportunities, our strategy and our business integration. That’s where the real value comes, as far as boards are concerned.”

Sallie Pilot, managing director of the Investor & Issuer Forum, said investors have a deep interest in the information contained in sustainability reporting.

They want to know how “material” sustainability risks are affecting long-term value creation and competitiveness, how the risks are factored into strategy and how capital allocation is aligned with sustainability goals. They’re also concerned with the way executive pay matches those goals.

“Investors have moved beyond that focus of ‘tell me what your targets are’ to ‘show me how it’s embedded across your business’,” she said.

You can watch the full 48 minute webinar here  ‘on demand’  where our experts reveal the latest insights on sustainability regulation, reporting and strategic integration.