Let’s get this to of the way first: Reporting does not equal meaningful action. More on that below.

However, we’ve found that companies willing to communicate about their impacts on people and the planet publicly can be a useful sign that they take these issues more seriously.

That’s particularly true if the company is willing to disclose areas of impact where they’re lagging or under-performing.

Being open about where you can improve build credibility and trust with stakeholders.

Acknowledging weaknesses and areas for opportunity reveals vulnerability and has risk - but it’s also a reality for most brands.

Having a public report can also be instrumental in driving accountability.

We generally use the same framework whether we’re crafting a report for a client or evaluating reports from other brands.

The framework is built around a series of questions that are designed to target key indicators of credible action on sustainability issues.

These indicators fall into three categories:

1. Issues Identification

Understanding what matters in terms of impacts to people and planet across the life cycle.

Ensuring that all relevant areas of impact are identified and targets or goals are established.

2. Performance Evaluation

Taking action on priority areas of impact and measuring the change.

Providing verifiable data on performance against near-term targets and long-term goals.

3. Integration

Embedding sustainability into operations and supply chain.

Describing how sustainability is integrated into decision-making across the company.

The first step in effectively managing (and reporting) on your sustainability efforts is to make sure your company has identified all of the areas of impact that are relevant.

We frequently find that while a company has correctly identified some of the relevant sustainability issues, there are often gaps.

These gaps are often obscured across the life cycle of products or within supply chains.

That’s why our starting point is to make sure we’ve correctly identified what matters - even though we should ultimately prioritize within these material areas of impact.

When it comes to identifying the relevant issues, here’s the kinds of questions we like to ask:

What matters to your company when it comes to sustainability?

Most companies have at least a general sense of what matters when it comes to sustainability - and many are often already working on specific issues like packaging waste or sourcing.

We think the key to identifying relevant sustainability issues is both art and science.

You don’t want to ignore major sources of impact on people or the planet.

But you also want to try and prioritize topics that resonate with your target audiences.

Some issues are industry specific but it is our perspective that some issues are nearly universal across businesses including climate, biodiversity, and social impacts - these are inherent in doing business regardless of what goods you make or services your provide.

It’s okay to have some gaps on the issues - just make sure you explain what they are, where you’re at, and what you’re planning to do about them moving forward.

Have you established credible goals on these issues?

Now that we know what matters in terms of sustainability impacts, we want to set some goals.

Where do we need to go to achieve a major improvement or change in the nature and extent of these impacts.

Your goals should be science-based whenever possible and aligned with our understanding of planetary boundaries and social well-being.

Like others kinds of goals, sustainability goals should be well crafted i.e. they need to be time-bound and have clearly defined assumptions and limitations.

We recommend creating goals (or objectives if OKRs are your thing) that can objectively assessed as being complete or incomplete.

Mistakes to avoid

• Ignoring issues to avoid looking bad - authenticity requires that you acknowledge places where you need to improve and how you plan to take action.  

• Omitting relevant issues because you are a subsidiary: For example, we recently reviewed a sustainability report from an animal protein company that omitted greenhouse gas emissions data because their parent company reported it in aggregate. Own your impacts!

So we know what sustainability issues matter for your company, set some goals, and thus which ones we should be reporting on.

What’s next?

We need to decide how to measure and communicate about your performance on these sustainability issues.

When thinking through performance evaluation, here are some of the questions we like to ask:

Do you provide data on your progress?

This data should be related to your goals and associated KPIs or key results.

Our preference is to always try to provide some primary data on performance - even if it’s not perfect.

We find that that quantity and quality of data for evaluating sustainability performance often increases over time.

But everyone has to start somewhere.

Have you evaluated impacts using a lifecycle approach?

There is often a bias towards end-of-life impacts associated with the sustainability of products, particularly with consumer products brands.

Sometimes that emphasis is well-placed, but other times it overlooks significant sources of impacts to people and the planet upstream (i.e. supply chain, and product use).

Do you have a plan for how to improve?

We’re in the “progress not perfection” camp - no company is perfect when it comes to these issues and there is always room for improvement.

So you’re not hitting your near-term targets of meeting KPIs?

Just say so, and let’s also be sure to talk about what you’re going to change to improve your performance.

Mistakes to avoid

• Only providing estimates of avoided impacts or emissions - your focus should be on the actual impacts associated with your operations and value chain.

• Failing to provide an explanation of assumptions, limitations, and data gaps: As we noted, the quality and quantity of performance data can vary widely depending on the maturity of the company. Be sure to note where you’ve got issues.

An important note on evaluating performance: context-based sustainability

Comparing your sustainability performance to your peers is fine, but what we really need is to be using “normative” measures or those that compare your progress in context with what is necessary to respect planetary boundaries and use only your fair share of resources.

You can watch a nifty video on how the United Nations is leading the way on this approach here.

We expect to see an increasing focus on sustainability performance evaluation and reporting that integrates the concepts of earth systems boundaries in the coming years.

We know what matters, we’re measuring our performance - what else is there?

Describing how sustainability is integrated into the core processes and operations of a business represents one of the most important and least communicated areas in our perspective.

Successfully integrating sustainability into the places where key decisions are made like R&D, product development, finance, and supply chain is perhaps the biggest unlock when it comes to transforming the way your business impacts and benefits people and the planet.

The process of making decisions, evaluation of performance, disclosure, and accountability are the core of business governance.

When we look at how to communicate about sustainability integration, here are some of the questions we like to ask to inform our reporting:

How is sustainability embedded in decision-making?

If you’re big enough to have an established business planning process including strategic planning and operational planning, then there an abundant opportunities to embed sustainability into decision-making.

Even if you’re too small to have any formal planning processes, sustainability should be integrated into how you build and allocate budgets.

Who is accountable for progress on goals and key metrics?

We want to describe the way your business allocates responsibility for impacts to people and the planet.

It’s amazing how quickly buy-in and collaboration can change when financial incentives are aligned with sustainability performance.

Let’s talk about how you do it.  

How do you collaborate with other organizations on material areas of impact?

Very few company’s have the resources and intent to transform entire industries.

Tackling the kinds of sustainability issues we face requires collective action.

Lots of organizations are out there trying to create positive change - how are you partnering with them?

Mistakes to avoid

• Not disclosing your lobbying and political activities: Check out our blog on this topic here [LINK].