Sustainable development has become a prominent trend globally with the increase in policies from countries, requirements from brands and pioneering efforts of many organizations and businesses. Publishing a sustainable development report is considered the responsibility of businesses to demonstrate transparency about their sustainability activities. From those public figures, businesses can build trust with partners and customers. Let's join GREEN IN Learn how to build a sustainable development report through the article below!
1. What is a sustainability report?
“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” - According to the United Nations in the 1987 Brundtland Report
A sustainability report is a public disclosure by a company of its environmental, social and governance (ESG) impacts and aspirations, along with metrics that demonstrate progress towards these goals. In addition to demonstrating a company’s commitment to sustainability, the report proactively assesses the effectiveness of strategies and actions taken to achieve its goals.
It can be said that sustainable development reporting is a scale, a means of publicizing and demonstrating responsibility to stakeholders for the organization's activities, towards the goal of sustainable development. Through transparent reporting and demonstrating their responsibility, organizations not only strengthen the trust of stakeholders but also contribute to promoting sustainable global economic development.
2. Effects of sustainable development reporting
- Increase competitive advantage, attract customers in green supply chain: ESG practices and reports that meet international standards will help gain a superior competitive advantage in attracting customers from EU, US, Japan, Korea, etc.
- Increase prestige, reputation, attract investment: Good ESG practices help businesses improve their prestige and reputation, while attracting more investment from international financial institutions.
- Compliance with regulations: Good ESG practices and reporting contribute to compliance with Vietnamese laws and help partners/customers comply with international laws.
- Strengthening business strategy, attracting talent: Integrating ESG strategy into business strategy helps ensure compliance with new world trends. At the same time, it contributes to attracting and retaining talent.
- Save costs, improve profit margins: Practicing ESG initiatives well helps save operating costs and improve profit margins in the long term.
- Risk Mitigation: Good ESG practices and reporting help mitigate both financial and non-financial risks for businesses.
3. Current status of sustainable development reporting in Vietnam
On January 11, 1, the book “Guidelines for preparing a Sustainable Development Report” was launched in Ho Chi Minh City, compiled by the State Securities Commission (SSC) in collaboration with the International Finance Corporation (IFC), with the aim of providing basic procedures and criteria to help Vietnamese enterprises easily build their own sustainable development reports. This handbook helps enterprises understand how to measure, manage and disclose environmental and social impacts.
In 2023, Vinamilk will publish its 12th Sustainability Report with the theme “Mindful Change – Net Zero 2050”. This report focuses on the roadmap to achieve the Net Zero target, including greenhouse gas inventory according to ISO 14064 and achieving carbon neutrality according to the international standard PAS 2060:2014 at many units.
At the same time, on October 27, 10, ACB released the 2023 Sustainable Development Report. This is the first bank in Vietnam to publish a separate report on the topic of sustainable development according to GSSB standards and referencing the United Nations Sustainable Development Goals (SDGs).
Nowadays, businesses in Vietnam and around the world have clearly recognized the importance of publishing sustainability reports publicly and transparently. This trend not only brings many benefits to businesses but is also expected to become an essential standard in the future.
4. Sustainability reporting framework
Currently, businesses can apply a number of frameworks to implement sustainable development reports on a voluntary basis. Depending on the sustainable development goals that the business identifies as well as the users of the information source, the application of the framework will change. Some popular frameworks include:
- The Sustainability Accounting Standards Board (SASB) has issued a detailed guidance framework for each specific sector and industry. These requirements are used to help businesses determine the financial materiality of information on sustainable development, which can then be disclosed transparently to management agencies or the public.
- United Nations Global Compact (UNGC): This is a framework built on specific principles to encourage global businesses to adopt sustainable development policies, be socially responsible and disclose their results. The UNGC sets out 10 key principles in four areas: human rights, labor, environment and anti-corruption.
- Working Group on Climate-related Financial Disclosures (TCFD): This framework provides recommendations on climate-related financial disclosures, relevant to organizations across all sectors and regions. Organizations can use TCFD recommendations to develop consistent and comparable reporting, which will enhance transparency about climate risks and impacts on finances.
It can be seen that the common point of these frameworks is that they all focus on the materiality of an issue. When building a sustainability report, the assessment criteria need to be linked to financial materiality to be consistent with the requirements of investors and other stakeholders.
5. Conclusion
The above article has helped you learn about sustainable development reports. Hopefully our information will be of some help to you as well as help in the process of protecting the green - clean - beautiful environment. Don't forget to follow the next articles at GREEN IN for more updated information!