As a global brand that values sustainability in all business practices, BDO’s business advisory services have aided many businesses on their journey to goals of sustainability. Our values align with that of protection, preservation, and growth both inside and outside of the business.
Businesses need internal and external leadership in this space, which is why we provide strategic advisory services that can act as both a demonstrator and a guide to companies. We can frame goal-setting questions in terms of sustainability, asking how sustainable your business practices currently are, setting goals for improvement, and establishing metrics to measure the success of sustainability initiatives. This is called a sustainability report.
What is sustainability reporting?
Sustainability reporting is the practice of evaluating your business’ environmental, social, and economic impacts as it operates from day to day. A business’ impacts on these factors are assessed, helping you to identify the gaps in your business’ practices and create initiatives to fill them. Every industry’s practices are applicable here, whether fishing and forestry businesses, corporate offices in the heart of a city, charities or social enterprises.
Below are the some of the elements that can covered in a sustainability report:
- Environmental Sustainability. Energy and emissions, effluents and waste, materials, biodiversity, and carbon impact.
- Economic Sustainability. Investments, economic responsibility, and corruption issues.
- Social Sustainability. Cultural outcomes for Māori businesses, community investment and engagement, employee wellbeing, supplier sustainability and human rights in labour.
General business opinion indicates in this pandemic era that sustainable business practices are, now more than ever, extremely relevant. With a renewed focus on health, safety and wellbeing, employees, customers and investors want to understand how an organisation’s business is conducted and they are questioning the ‘business as usual” mindset.
Governance leadership in the sustainability space
The purpose of an organisation’s governor is to steer the ship and lead by example using their own set of values. Through a sustainability report, governors are able to ask themselves what their values are and commit to decisions that bring their organisation’s practices into alignment with them. The report also allows governors to lay out success measures, and better understand the social and environmental returns of company changes would look like. Beyond that, sustainability reports enable the creation of a framework of this process to replicate results.
Leaders and demonstrators are needed in this space, as sustainable values become part of the overarching leadership mantra and the organisation’s cultural psyche. As an organisational leader in New Zealand, it is important to incorporate your own personal values into your organisation, as people are now more mindful than ever about the values of the businesses they support. Kiwis actively seek out businesses that (1) understand their organisation’s impacts and (2) create initiatives to compensate or overcome them.
Māori entities, in particular, value people, planet, profit, and culture equally. (Māori Business Survey) Their investment in land is to leave it better for future generations, caring for their land, and embodying Kaitiakitanga (guardianship and protection). Instead of aiming for social or environmental neutrality, many create strategies that leave the land better than they found it, and these considerations capture their full world view. These strategies may include helping a certain number of people get jobs, deviating waste from landfills by altering business practice, or investing in philanthropy through a company program.
Sustainability reporting in different industries
Forestry & Carbon Credits
Increased political relevance combined with the pressures from New Zealand’s commitments to international climate change agreements, has seen interest in the forestry sector continue to grow. This trend may be accelerated further by a desire to own more tangible assets classes in the post-Covid era. Landowners are increasingly aware of the need to take a measured approach to land use, with full consideration of how a balanced approach may utilise forestry-related projects to drive environmental benefits as well as commercial returns.
Alongside this comes the increased demand for measurement and reporting of land use activities. In addition to compliance, internal monitoring and risk management monitoring landowners are increasingly turning to sustainability reporting as a means of identifying greater efficiencies, costs savings and maximising resource use. By developing an increased awareness of their energy and resource use landowners can develop competitive advantages with customers and third parties with aligned social responsibility objectives.
Creating value through the Emissions Trading Scheme is not a new concept, but the drive towards forestry and increased prevalence of central and local government support options for afforestation projects provides valuable opportunities for those involved with forestry to leverage new revenue streams in addition to biological asset growth. BDO Christchurch has experience identifying, building and supporting these endeavours.
A changing Fishing Industry
The Fishing Sector is currently under significant and ongoing scrutiny in terms of sustainable firm practices. Recording and reporting helps to achieve improvements in quota management. We have discovered, together with our clients, that quota management together with bird mitigation, by-catch management and a pragmatic interface with recreational fishers are essential points of focus in reducing environmental impact.
Philanthropic Funds – Investing for impact
A diverse range of funding and philanthropic channels are particularly focussed on the way the organisations that they are supporting conduct their business. Whether health service providers assisting members from a range of communities with life challenges to charities to social enterprises, we have seen a number of the organisations we advise seeking greater transparency and reporting of key success measures and indicators that have meaning and relevance.
In one case, instead of simply giving grants to causes, our client considered how they could help to create long-term sustainable returns by researching the big changes an organisation was making in society. This required data collection and analysis and laying out the evidence of these changes through comprehensive sustainability reporting and fit for purpose KPI reporting.
Procurement is one area that businesses can change to become more sustainable. Kiwis like to buy local, and a recent trend has demonstrated that consumers are interested in transparency around what they’re buying. They want to know their clothing, consumables, and other purchases are ethically acquired by looking at ethical reports. These reports also affect those working within the business, as people will be more mindful about decisions they make across the board.
Reach out to BDO to help your organisation thrive now and in the future.
Sustainability reporting is the first step in orienting your organisation to a better future. Knowing what your current practices are is essential to creating new ones. Assessing the core values of your business helps to develop new practices that align with them. This process is a part of BDO’s strategic advisory services.
As a business with global reach and experience in virtually every sector, we can help your business grow in a sustainable way. Improve your business’ trajectory, reach out to a BDO advisor today.