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Definition & Benefits of Sustainability Report

Sustainability Report at a Glance

A sustainability report is a report that contains not only financial performance information but also non-financial information consisting of social and environmental activities information that enables the company to grow sustainable performance. The implementation of sustainability reports in Indonesia is supported by government regulations such as the Limited Liability Company Law number 40 of 2007 and POJK number 51 of 2017.

The practice of reporting social and environmental responsibility activities that are disclosed through sustainability reports requires guidelines. One of the guidelines that can be used is Global Reporting Initiative (GRI). GRI is an international organization that guides sustainability reports internationally. GRI issued a guideline on sustainability reporting in 2001 and it has been continuously updated to this day. The benefits of a sustainability report based on the GRI (2011) framework are as follows:

  1. As a benchmark for organizational performance by taking into account laws, norms, legislation, performance standards, and voluntary initiatives
  2.  Demonstrating organizational commitment to sustainable development
  3. Comparing organizational performance over time
  4. Improving sustainability performance
  5. Improving risk management and investor communication
  6. Engaging stakeholders and improving stakeholder relationships
  7. Motivating and engaging employees
  8. Building credibility as a committed and effective corporate citizen
  9. Strengthening internal data management and reporting systems
  10. Improving sustainability strategy and selection of performance indicators and targets
  11. Benchmarks of sustainability performance against oneself and others

The sustainability report in the GRI guidelines version 3.1 is divided into three dimensions, namely Economic-Economics (EC), Environmental-Environment (EN), and Social aspects. The social aspect consists of four sub-dimensions, namely: Labor – Labor (LA), Human Rights (HR), Society – Society (SO), and Product Responsibility (PR).

 

Also read: Sustainability Report Product

 

The Benefits of Sustainability Reports for Companies

1. Maintain and Improve Company Reputation

The first benefit is that the company’s reputation can be well-maintained or even increased. Sustainability reports also encourage improved reporting and transparency in order to create public trust in the company. Based on a study from Boston College Center for Corporate Citizenship and EY (2013), it was revealed that the sustainability report was able to optimize the company’s reputation.

In addition, it is stated that the market value of the organization shows a significant movement, where the market value of the company in 1975 was 83% determined by the financial aspect and 17% by the non-financial aspect. This has changed drastically with 2009 data, where the market value of business organizations is determined only by 19% of the financial aspect and the remaining 81% is the non-financial aspect of the company due to the support obtained from internal and external stakeholders, such as consumers, employees, investors, regulators, suppliers, and other groups. The company’s ability to effectively communicate social and environmental activities and performance in a sustainability report is considered important for the long-term success, survival, and growth of the organization.

2. Meet the expectations of employees

Sustainability reports can also help to meet the expectations of all employees who work in the company. Employees will feel that they are working in the right company because they pay attention to environmental, economic, and social aspects. This has an effect on increasing employee loyalty.

3. Increase Access to Capital

Seperti yang sudah dijelaskan diatas bahwa perusahaan yang membuat sustainability report lebih dilirik oleh investor atau pemodal. Oleh karena itu apabila perusahaan membutuhkan modal tambahan dalam menjalankan usahanya maka akan lebih mudah dalam mendapatkannya. Hal ini tentu saja membawa keuntungan sendiri untuk perusahaan itu dan memudahkan manajemen dalam menjalankan bisnis.

4. Company Efficiency and Reducing Waste

Another benefit of making a sustainability report is that the company can make efficiency and reduce the impact of waste on the surrounding environment. In the process of making this report, the company must collect information about the process and its impact on the environment.

Through these data, transparency will be created on the company’s performance so the company’s management can make necessary decisions. Such decisions include efficiency in costs incurred, eliminating raw materials from non-renewable natural resources, reducing the impact of waste that will arise, etc.

5. Increase Positive Influence on Company Stakeholders

Companies must maintain relationships with stakeholders by accommodating their wants and needs, especially stakeholders who have power over the availability of resources used for company operational activities, such as workers, customers, and owners. Therefore, the organization’s survival depends on the support of stakeholders so the company’s task is to seek that support.

One of the strategies to maintain relationships with company stakeholders is to disclose sustainability reports that cover economic, social, and environmental aspects. The disclosure of the sustainability report is expected to fulfill the needs of the stakeholders so that it will produce a harmonious relationship between the company and its stakeholders.

Sustainability Report Components

Sustainability reports in accordance with GRI standards and POJK 51/2017 are usually used as references for companies in Indonesia. So, things that must be included in the sustainability report include:

1. Theme

The theme in the sustainability report describes the big picture of the company in its business performance.

2. Achievement of Sustainability Performance

Describe related economic, environmental, and social flashes.

3. Awards & Certification

Awards that have been achieved by the company over the past year.

4. Sustainability Strategies

The context of sustainability is inseparable from industry dynamics, changes in regulations and standards, business strategies formulated by the company, operational activities carried out, value chains, and stakeholder concerns.

5. Sustainability Performance Highlights

  • Economic Performance
  • Environmental Performance
  • Social Performance
  • Awards & Certificate
  • Previous Year Sustainability Report Overview

6. Management Report

7. Company Profile

  • Company Identity and Profile
  • Company History
  • Vision, Mission, and Sustainability Values
  • Company Scales
  • Shareholders
  • Operational Area
  • Product, Services, and Business Activities
  • Association Member
  • Significant Change
  • Sustainability Report

8. Sustainability Governance

  • Responsible for sustainable finance implementation
  • Sustainable finance competency development
  • Risk assessment on the sustainable finance implementation
  • Stakeholder Relation
  • Problems, developments, and impacts on the sustainable finance implementation

9. Sustainability Performance

10. Financial Services Authority Regulation Reference

11. GRI Standard Index “Core” Option

 

Also read: Wika Gedung Wins Gold Winner MENA AWARDS 2021 (Sustainability Report)

 

Sustainability Report Quality Principles (GRI Standard)

  • BALANCE

Sustainability reports reflect both positive and negative aspects of organizational performance

  • COMPARABILITY

Report information consistently and enable stakeholders to analyze changes in organizational performance over time (Previous Sustainability Report)

  • ACCURACY

Accurate and detailed information

  • PUNCTUALITY

On-time information

  • CLARITY

Understandable and accessible information

  • RELIABILITY

The report can be tested and determine the quality of the information

 

Sustainability Report Material

  • Reflect on the organization’s significant economic, environmental and social impacts; or
  • Substantially influence stakeholder assessments and decision

GRI Standard

This is the following disclosure scheme of the sustainability report accordance to GRI standart

 

Example of Sustainability Report

This is an example of a sustainability report that we have collaborated with. We compile and make reports in accordance with GRI standards and POJK No.5 2017

 

Contoh Sustainability Report

Conclusion

If you are a go-public business owner, a sustainability report is something you should pay attention to and maybe you should make annually to let investors know about the sustainability of your business.

 

Making Sustainability Reports with Senyum Untuk Negeri

The preparation and creation of a sustainability report require a detailed study with complete data. If it’s lack of preparation, or lack of knowledge related to writing, data, and display design will reduce the sustainability report quality and transparency.

The best solution is to make a sustainability report by collaborating with Senyum Untuk Negeri. We are ready to make a good and quality sustainability report for your company in accordance with GRI standards and POJK no. 51 2017.

More info please contact us at 0812-35-5000-53 .

 

 

Source:

activesustainability.com/sustainable-development/what-a-sustainability-report-is-for-i/

https://accurate.id/marketing-manajemen/sustainability-report/agar-perusahaan-lebih-dikenal-masyarakat

Manfaat dari Pelaporan GRI

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