Friday, 24 November 2017

Materiality statement is key to sustainability reporting

Sustainability Reporting is a critical step to achieve a smart and inclusive growth with long-term profitability and environmental care. GE3S is a leading Sustainability Consultancy Dubai and Abu Dhabi. For the stakeholder, transparency encompasses a systematic process for improving performance and sustainability reporting practices. It enables companies to measure, monitor and manage their impact on society, the environment, and the economy. For this to be useful, a company should meet with the Sustainability reporting consultant writing the report and categorize the main impacts that influence the assessments and decisions of stakeholders. Material topics for a reporting organization should include those topics that have a direct or indirect impact on its ability to create value for the three pillars of Sustainability. Materiality in dealing with Sustainability reporting differs from Financial reporting. In financial reporting, materiality is commonly thought of as a threshold for influencing the economic decisions of those using an organization’s financial statements i.e investors while materiality in sustainability reporting is not limited to those sustainability topics that have a significant financial impact.

GE3S as a Sustainability Reporting Consultant helps in determining materiality for a sustainability report includes the consideration of economic, environmental, and social impacts that cross a certain standard in affecting the ability to meet the needs of the present without compromising the needs of future generations. Yet these material topics will often have a significant financial impact on an organization in the near-term or long-term. They will therefore also be relevant for stakeholders who focus strictly on the financial condition of an organization. When Sustainability consultants create the report, materiality enables external stakeholders to understand the companies’ true value, tangible and intangible assets, and provides a critical source of information for affected communities and stakeholders. Many topics that attract significant stakeholder interest in an organization, or represent major economic, environmental, or social impacts, result in financial consequences within a time frame that will be relevant for at least some participants in capital markets. The threshold for defining material topics to report should be set to identify those opportunities and risks which are most important to stakeholders, the economy, environment, and society, or the reporting organization, and therefore merit particular focus in a sustainability report.

 GE3S prepare Sustainability reports by following the ‘Reporting Guidance for Defining Content’, and applying the ‘Reporting Principles for Defining Content’ in the GRI Sustainability Reporting Guidelines, the organization should be able to report on those topics that demonstrate its impacts. The G4 Guidelines will also propose that the organization presents its material topics upfront in the report, meaning that higher visibility will be given to the chosen material topics. This helps organizations offer report users a very clear picture of the material topics identified. These could range from greenhouse gas emissions, calculating carbon footprint to human rights or the gender balance of boards of directors.  As Sustainability reporting consultant, GE3S, understands the importance of this and values materiality assessment in the core of every sustainability report.

Sources:GRI https://www.globalreporting.org/Pages/default.aspx

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