Sustainability reporting boosts accountability in organisations

In a highly competitive environment, organisations face increasing pressure to deliver consistent returns to investors.

This expectation from a critical stakeholder such as investors is a significant driver of strategy. It is at the core of why sustainability is good for business in the short, medium and long term.

Therefore, as organisations set out their strategic plans anchored on future drivers of sustainable growth in their markets, they must put in place a mechanism for the responsibility for the outcomes and accountability in strategy implementation. For instance, investors want to know whether organisations have done what they said they would do and whether the strategy adopted is right.

Also, investors would like to assess if the timelines set by an organisation on strategic areas like climate or business model transitions are appropriate or should be revised. In other words, it is not enough for organisations to set strategic targets (financial and non-financial). It is more important to assess performance against the right industry benchmarks for comparability and ensure targets are SMART (specific, measurable, achievable, relevant, and time-bound).

Sustainability reporting provides equal focus on an organisation’s short- and long-term viability. It is a comprehensive view of how an organisation creates value, providing a connected picture from strategy, business model, and value drivers to performance.

Sustainability reporting helps an organisation’s stakeholders distil the main drivers of strategy—financial and non-financial—and gives stakeholders a clear picture of their performance relative to their strategic ambitions.

Clarifying performance measures linked to strategy is suitable for course correcting, ensuring that organisations are accountable for the results.

Sustainability reporting can provide stakeholders with information on the context for strategy setting, trade-offs on performance targets, and timelines influencing decision-making in an organisation. In addition, to attract and retain global capital flows, organisations must improve accountability in strategy execution.

Therefore, organisations can demonstrate accountability and ensure investors have the information required for their decision-making by preparing sustainability reports.

Akinyemi Awodumila is a Partner at Deloitte East Africa. He is an author who writes and speaks widely on corporate reporting topics.