Collaboration lowers compliance costs of sustainability reporting

Organisations must, therefore, approach the adoption of these new reporting requirements with a collaborative mindset, regardless of the cost-benefit analysis.

The IFRS sustainability standards provide for proportionality considerations during application to ensure that organisations do not suffer undue cost and effort during adoption of the new standards.

Notwithstanding, a collaborative approach provides organisations with the ability to lower their cost of compliance by working with stakeholders across the entire value chain of sustainability, including reporting.

It is a highly encouraged approach from regulators that helps organisations to understand the requirements of the new sustainability reporting standards for effective adoption.

Collaboration should begin internally for organisations.

Sustainability reporting remains an outcome of embedding sustainability into an organisation’s business growth strategy. Therefore, it requires collaboration across different functions for a successful reporting process.

Therefore, getting the buy-in from key internal stakeholders is critical to lowering the cost of compliance. Another opportunity for collaboration is with stakeholders across an organisation’s value chain.

Read: Corporate reporting as a tool for accountability and transparency

Some of the information required for sustainability reporting resides outside the organisation, and the level of effort to acquire this information is a function of how collaborative an organisation has been with its stakeholders who hold this information.

For example, Scope 3 emissions measurement and reporting requires information across the 15 categories of value chain activities from stakeholders outside an organisation.

The collaboration mindset applied by organisations should also be extended to their industries and sectors. It remains an important avenue for organisations to share and learn among peers in their industry.

Associations can offer capacity-building sessions to their members. At the same time, industry-based approaches can also be applied for specific aspects where consultations and guidance need to be provided to aid the smooth adoption of sustainability reporting standards.

Through collaboration, organisations can solve some of the most pressing challenges and ensure an effective adoption of the sustainability reporting standards.