By:
Dr Sunday Omojuyigbe FCA
Miriam Aroh Bsc
ABSTRACT
This article explores the rising importance of Sustainability Reporting practices in today’s corporate world. It highlights why Economic, Social and Governance (ESG) are critical for business long term existence, investors confidence, and regulatory compliance, with particular focus on Nigeria. By examining global frameworks and Nigeria regulations, this article provides practical steps for companies to embed sustainability into their strategies. The conclusion emphasizes that sustainability reporting is not merely a compliance exercise but the new standard of business excellence.
In recent years, the concept of Sustainability Reporting has gained significant traction among investors, companies, and consumers alike. As the world faces pressing challenges such as climate change, social inequality, and corporate governance issues, ESG criteria have emerged as essential metrics for evaluating the sustainability and ethical impact of investments.
INTRODUCTION
In today’s corporate world, where environmental concerns and social responsibility are at the forefront of business practices, sustainability reporting has emerged as a crucial tool for organizations to report the impact of their business activities on the society.
Sustainability Reporting is the practice of entities disclosing information about their environmental, social, and governance (ESG) performance. This type of reporting aims to provide stakeholders such as: investors, vendors, customers, government and the public with insights into how an entity is managing its impact on the environment and society.
Sustainability Reporting typically include information on resource usage, waste management, carbon emissions, labor practices, community engagement, and other relevant metrics. The goal is to promote transparency and accountability, helping organizations to communicate their sustainability efforts and progress towards their goal.
Sustainability reporting is not just something companies do to tick a box anymore. It has become a key part of how businesses build trust, manage risk, and show what they stand for. In fact, a survey of Sustainability Reporting carried by KPMG in 2024 found that over 96% of the world’s largest 250 companies now publish sustainability reports. This is a sign of how imperative Sustainability Reporting has become.
THE PILLARS OF SUSTAINABILITY REPORTING
The pillars of Sustainability Reporting include:
- ENVIRONMENTAL: This aspect examines how a company performs as a steward of nature. It includes factors such as carbon emissions, waste managements, resources depletion, biodiversity and climate impact.
- SOCIAL: This component looks at how a company manages relationship with employees, suppliers, customers, and the communities where it operates. It include issues like labor practices, human rights, community engagements, diversity and inclusion.
- GOVERNANCE: This aspect focuses on a company’s leadership, executive pay, audit, internal controls, and shareholders right. It assesses how a company is governed and whether it operates transparently and ethically.
WHY SUSTAINANABILITY REPORTING MATTERS
- INVESTOR CONFIDENCE: Global investors are increasingly drawn to companies with strong Environmental, Social, and Governance (ESG) practices.
- ACCESS TO CAPITAL: Financial institutions, including the International Finance Corporation (IFC) now prioritize businesses with ESG integration for funding. A strong sustainability report makes it easier for businesses to secure capital.
- REGULATORY COMPLIANCE: In Nigeria, regulatory bodies such as the Securities and Exchange Commission (SEC), Nigerian Exchange (NGX) Group and so on now mandate sustainability disclosure.
- REPUTATION AND TRUST: Stakeholders from customers to partners increasingly favor companies that are ethical, transparent, and socially responsible. Sustainability reporting strengthens reputation and builds long-term trust.
- LONG-TERM RESILIENCE: By addressing environmental, social and governance risks upfront, businesses protect themselves against future crises, ensuring stability and sustainable growth.
SUSTAINABILITY REPORTING FRAMEWORKS
A sustainability reporting framework is a structured set of guidelines that helps companies on what to report, measuring methodology, how to clearly and consistently report sustainability related information to stakeholders.
Some frameworks are broad and stakeholder-focused, while others are designed specifically for investors or regulators. Depending on objectives, an entity might use just one or combine several to meet different needs.
- GLOBAL REPORTING INITIATIVE (GRI): Offers guidelines for sustainability reporting, most widely used framework worldwide. It provides standards for reporting on ESG performance and focuses on transparency and comparability.
- INTERNATIONAL ORGANIZATION FOR STANDARDIZATION (ISO) 14001: Establishing, implementing, maintaining, and continually improving environmental management systems. It focuses on financially material sustainability issues that may be relevant to investors.
- TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSUES (TCFD): It encouraged companies to disclose governance, strategy, risk management, and metrics related to climate. It is focused on climate-related risks and opportunity
4. CARBON DISCLOURE PROJECT (CDP): Encourages companies to disclose their environmental impact. It encourages transparency in carbon emissions, water usages and climate risks.
5. INTERNATIONAL SUSTAINABILITY STANDARDS BOARD (ISSB): Is a standard setting body established by IFRS Foundation. Its primary aim is to provide global baseline for sustainability reporting. The ISSB develops the IFRS sustainability disclosure standards, it helps investors and stakeholder make informed decisions, reducing report fragmentation, and promotes transparency and accountability in how an organization manage sustainability-related risk and opportunities.
PRACTICAL STEPS FOR COMPANIES
- Develop a clear ESG strategy aligned with business goals.
- Conduct a materiality assessment to identify key ESG issues.
- Report using global and Nigerian frameworks.
- Build staff capacity through ESG awareness and training.
- Strengthen corporate governance structures.
- Engage stakeholders in the ESG journey.
- Gather relevant data on ESG as relate to the company operations.
- Align sustainability reporting with financial reporting to avoid repletion and variance.
CONCLUSION
Sustainability reporting is no longer a matter of choice but a strategic necessity for organizations seeking long-term existence and competitiveness.
By embedding environmental, social, and governance practices into their core operations, companies not only reduce risks but also unlock opportunities for innovations, investment, and market growth.
In Nigeria and across the globe, stakeholder from regulators to investors and customers are increasingly demanding accountability and transparency on how the activities of entities affect the environment, social and governance ecosystem.
Therefore, businesses that take sustainability reporting seriously will not only enhance their reputation and stakeholder trust, but also secure their place in a rapidly evolving global economy
HOW WE CAN HELP ON SUSTAINABILITY REPORTING
At Sunday Omojuyigbe & CO, we believe sustainability reporting is not just about compliance, it is about creating lasting values for businesses, stakeholders, and societies. We work with organizations to transform ESG goals into practical actions that deliver measurable results.
Strategic Guidance: We can help to align ESG priorities with your overall business objectives.
Capacity Building: We can equip your management and staff with the knowledge to drive ESG from within.
Sustainability Reporting: We can assist to develop clear, credible reports that meet global and local standards.
With our expertise, you can confidently navigate sustainability reporting requirements while building stronger and more sustainable organization.
For more detailed insights and or consultation you can reach us:
Website: www.sundayomojuyigbe.com
Email: [email protected]
Phone: 08035747457; 07058653716.
