Measuring the Impact of Social/Environmental Initiatives

Written By: Ellis Orlan, CPA (IL), CGMA, SF Partnership LLP, Toronto, ON, Futurpreneur Mentor, eorlan@sfgroup.ca @SFPartnership

Over the last decade, reporting on environmental and sustainability performance has grown worldwide, with many large and some medium-sized organizations producing an annual sustainability report. Such reporting addresses the positive and negative aspects of a company’s environmental and social performance with the goal of increasing transparency and building goodwill with stakeholders, such as shareholders/investors, employees, community members and customers.

The process of issuing a sustainability report also helps bring more clarity and focus to the organization’s efforts in managing its environmental and social performance. A sustainability report can be a good way to improve your performance.

In practice, small and medium enterprises are less likely to issue sustainability reports. However, reporting on sustainability performance can help them gain credibility. Customers, investors and bankers are increasingly looking to environmental measurement and reporting as a tool to assess the credit worthiness and risk profile of businesses.

Employees are also interested in working for companies aligned with their values.  Being able to read about concrete efforts and the positive impacts the company has generated in the environment or the community can make the best and the brightest talent more attracted to the organization.   The goal is to provide a means to communicate information to stakeholders to gain trust and credibility. This may be as simple as posting information on the company website, or providing an update to suppliers, customers and staff, all the way to more robust and complex annual sustainability reporting.