5 Reasons Private Companies Should Do Sustainability Reporting

When it comes to sustainability reporting, private companies have not felt the same pressure to report as public ones, but that soon won’t be the case.

Sustainability-related regulations continue to tighten, such as the SEC ruling that requires public companies to disclose their greenhouse gas emissions and the expected costs and risks of climate change on their business. But private companies are starting to feel the pressure, too. For example, new legislation in California will require many companies doing business there (including private companies) to report on their emissions and climate change impacts. And as other rules are implemented for public companies, stakeholders will begin expecting all companies to be transparent about their sustainability impacts. We’re reaching a point where private companies won’t be able to avoid sustainability reporting, and those that have already taken steps to shore up their sustainability efforts will be in a much better place to act fast.

Private companies don’t have to look at this as a burden. In fact, sustainability reporting brings a lot of value to a company. It’s clear that business success of the future will be closely tied to a company’s sustainability. This runs the gambit from efficient operations that reduce environmental impacts (and save money), to creating a work culture that attracts and retains the best employees, to rethinking product and service lines to respond to consumers’ desire for a more sustainable future. These steps aren’t woke – they are simply good business.

If you’re a private company and you aren’t doing sustainability reporting, now might be the time to get started. Here are five reasons sustainability reporting could benefit your business:

1. Prepare for customer expectations. As increased scrutiny is being placed on the full value chain, more companies will be demanding data on the materials that go into the products they produce. In some cases, companies have stated that they will look for new suppliers that better align with their own sustainability goals. If you’re unprepared to provide data to these customers, you risk losing their business. Luckily, the data they need is often the same as what would be collected for a sustainability report, so companies who are reporting have a leg up in meeting customers’ requests.

2.  Stay competitive. The reality is that in a world increasingly focused on sustainability, you cannot afford to sit this one out. Now is a good time to get processes in place, like tools to collect your sustainability data and a team to analyze your performance and write your story. It’s also a good time to look at your competitors – if they are doing sustainability reporting, they have a reputational advantage, which will inevitably lead to a business advantage as well. Those that make sustainability a priority tend to approach their work more innovatively, rolling out better products and adapting to changing market dynamics more easily.

3.  Better understand your business. At its core, sustainability reporting is about transparency, both for your external stakeholders as well as your own company. Going through the exercise of analyzing detailed data about your operations may uncover issues that have been occurring in a silo, and bring them to the attention of leadership and cross-functional teams. Often, this leads to opportunities, such as reworking a manufacturing process to reduce waste or creating new HR trainings that prepare future leaders and improve employee retention.

4.  Reduce costs. The insights sustainability data provides can ultimately save your business money. For example, you might install LED lighting throughout your facility to demonstrate how you are reducing your greenhouse gas emissions, but also gain the added benefit of a lower electricity bill.

5.  Attract and retain employees. According to a Deloitte survey, 83% of millennials (who make up more than one-third of the workforce) actively seek out employers with strong commitments to environmental and social responsibility. And a study by Harvard Business Review revealed that employees at companies with strong sustainability programs are 55% more engaged and 16% more productive. Sustainability reporting is one of the best ways to demonstrate to prospective and current employees that this is a company worth working for.

But let’s be real for a second – even when you know all the benefits of sustainability reporting, it can be overwhelming to figure out how to get started. Here are a few ideas for initiating sustainability reporting at your company. Or drop us a note at inquiries@standingpartnership.com – we love talking with companies about how they can begin and/or build on their sustainability reporting journey.