This Sustainability Reporting Checklist, prepared by Joss Tantram, Terrafiniti is an introduction to sustainability reporting and covers topics such as materiality, reporting standards, stakeholder engagement and communicating to investors.

1. Sustainability
reporting
checklist
sustainability | guidance

2. A developing trend
In the next few years it is likely
that the content and coverage
of such reporting will reach even
further into mainstream business
practice, seeking to demonstrate
the integration of environmental
and social issues. In practice, links
between environmental, social and
financial risks, the materiality of
environmental and social issues
and company performance will
increasingly shape and drive
company strategy and behaviour.
Support for your approach to
reporting
Terrafiniti has extensive experience
in the field of non-financial reporting;
working to establish best practice and
also directly with companies.
Through our work with companies
and as part of major sustainability
reporting awards, we have developed
a range of services and approaches
to assist organisations in developing
their strategy for reporting and
assessing their existing reporting.
From these approaches we have
developed a set of essential
questions to ask when developing or
assessing your reporting.
Increasing transparency &
accountability
The pressure for such non-financial
reporting comes from a range of
stakeholders, including NGOs,
community groups, investors,
and regulators. Non-financial
reporting should not be confined to
multinationals or large companies.
Impetus is also growing for small and
medium sized enterprises (SMEs)
and public bodies to produce reports
which reflect their environmental and
social performance.
What’s in a name?
Sustainability reports can go by
many different names: CSR reports,
CR reports, reports to society,
corporate citizenship reports and
many others. At their heart however,
all such reports should focus upon
the important (termed material)
environmental and social impacts
and implications of an organisations
activity (often termed “non-financial”
aspects). In this guidance, we have
used the terms “sustainability” and
“sustainability reporting”.
Non-financial reporting
should not be confined to
multinationals or large
companies.
How to use this guidance
The following guidance can be used
in two key ways:
›› To assess your current reporting
– look at your report and use our
questions to gain a picture of its
alignment to best practice.
›› To develop a best practice
approach for your reporting- best
practice reports cover the issues
and detail highlighted by our
questions.
Social and environmental issues are becoming recognised as
important sources of business value and risk. An increasing
number of drivers are prompting companies to disclose their
approach and demonstrate performance in these terms.
For more information
call +44 (0)1483 531 766 or
e-mail info@terrafiniti.com
Sustainability reporting
checklist
Sustainability reporting checklist | Page 1

3. System/Methodology/Approach
Sustainability reporting presents a narrative on the
management of sustainability within an organisation.
As such, it should be clear from a report that the
company takes a strategic, systematic approach
towards management and reporting. The use of formal
and informal management system approaches and
the use of reporting guidance are therefore essential
aspects of best practice.
Does management of sustainability:
›› Utilise a formal Environmental Management System
(e.g. ISO 14001, EMAS), or an informal systematic
approach (e.g. use of UN Global Compact)?
›› Utilise a recognised sustainability reporting approach
(e.g. Global Reporting Initiative)?
›› Mention external, independent indicators of
commitment/performance (e.g. Ethos Institute
Indicators, principles from ISO 26000)?
Leadership and stakeholders
Sustainability should be managed as part of normal
business practice, alongside any other business
priority. To put it simply, if something is important to
you, then it should be treated as such. In addition,
increasing importance and value is being given to
the role that stakeholders can play in identifying key
environmental and social priorities and in enhancing
the value of your sustainability activities.
›› Does the report have a statement from the Chairman
and/or CEO?
›› Does management identify the contribution of
sustainability to overall business strategy?
›› Is there a clear description of company sustainability
vision and values?
›› Is stakeholder engagement a clear part of the
sustainability management approach?
›› Is there a clear description of the stakeholder
engagement process?
Governance
Disclosure of governance processes (how
management takes place) and especially
sustainability governance are an essential part
of a good report. Such information provides an
indicator of the importance that the company places
on such issues and also the extent of embedding
of environmental priorities within overall business
priorities.
›› Is there a clear description of how sustainability is
managed within the company?
›› Are overall sustainability governance structures
clear?
›› Is there a clear description of identified stakeholder
issues?
›› Are there dedicated structures to support
sustainability?
Focus – material issues
Sustainability management, and therefore reporting,
should focus primarily upon those environmental
and social issues and impacts that are most relevant
and significant (material) for the company and its
stakeholders. Therefore the material issues focussed
upon should be those most closely aligned with the
delivery of core business and not those associated
with peripheral or “good news” stories.
›› Is there a clear process for the identification of
material/business relevant sustainability issues?
›› Is the identification of material sustainability issues
integrated into:
> risk management?
> governance processes?
Sustainability reporting best practice questions
Sustainability reporting checklist | Page 2

4. Performance and continuous improvement
Reporting should be able to tell an evolving story. How
has a company progressed against its stated aims and
objectives and how is its performance improving? The
disclosure of clear objectives and targets, alongside
the disclosure of performance, whether positive or
negative, allows the company to communicate its
commitment clearly to investors, employees and wider
stakeholders. Comparison with sector best practice
is also a useful way of demonstrating progress/the
distance still to travel.
›› Does the report explain how long term objectives
are identified? (E.g. is there a clear link between the
way that issues are identified and managed with the
objectives are set?)
›› Is year on-year performance disclosed?
›› Is performance against stakeholder identified issues
specifically disclosed year-on-year?
›› Are performance data normalised as well as absolute
(e.g. CO2 production given as a total tonnage and as
tones per unit of production/turnover)?
›› Does the report note performance of the company
relative to sector best practice?
Openness; telling the whole story
Transparency and accountability are key themes in
sustainability and reporting should reflect this. Not
only through communicating practice across the whole
organisation, but also in discussing and acknowledging
the wider implications of social and environmental
trends for the organisation’s strategy, policy and
marketplace over time. It is through such analysis and
disclosure that an organisation can really create value
through sustainability; by interpreting, understanding
and communicating the implications of social and
environmental trends.
›› Does the report give its reader a comprehensive
picture of a whole organisation?
›› Are case studies given focussing on material issues?
›› Are difficult issues openly discussed?
›› Are the implications of “big picture” trends and
issues discussed?
Third Party Statements, Assurance and Verification
An independent third party assurance statement
is considered to be a fundamental requirement for
good practice in reporting. Assurance statements can
cover “softer” content including policies, governance
structures and processes in addition to the assurance
of hard data. In addition, feedback from assurance
providers can provide a useful dialogue on continuous
improvement.
›› Does the report have an independent statement
which comments on the quality/veracity of the
contents of the report?
›› Does the statement use a recognised formal
Assurance methodology e.g. AA 1000 AS, ISAE 3000
or COS 3410N?
›› Does the statement comment on previous
performance and indicate key future issues for
consideration?
More help and support ?
This guidance is just a taster of the wider tools and approaches we have
developed for supporting best practice. Get our free ‘What’s What in
Sustainability’ newsletter to be the first to hear about key sustainability
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Call us for an informal chat to see if we can create value for you - contact
Joss Tantram (Partner, Corporate Sustainability) on +44 (0) 1483 531 766.
www.terrafiniti.com