What are the best practices for non-financial performance reporting?

Sustainability reporting can be voluntary or mandatory. Irrespective of the reason, the need for reporting should be to "communicate with purpose", by embracing objectivity and transparency. The reporting should consider stakeholders' expectations. However, the report should not be green-washed for use as a marketing document. The key purpose of the reporting should be to showcase how sustainability is being considered in an organization's strategy, business plans, governance mechanism, and day-to-day operations. It should communicate aspirational goals, plans, and progress. Considering the availability of data, and considerations of confidentiality of certain information, the organization should communicate the scope of the report.

In my experience, detailed research of the various standards is key to selecting the appropriate standards and framework. GRI standards are detailed and cover all aspects of sustainability reporting. - requires both qualitative and quantitative information. - primarily analysis of past data, but some forward-looking information. - some standards are mandatory, others optional. TCFD on the other hand is more climate-focused. These standards are suitable if the company has a significant environmental footprint and is working towards reducing its negative impact. Considering the recently issued IASB sustainability standards (currently voluntary), which also require climate-related disclosures, companies should seriously consider TCFD.

In my experience, collecting and verifying organization-wide data is a major challenge in reporting non-financial data. Communicate the following to all involved in report preparation: - scope of the report - guidelines as per standards and framework - methodology to capture data and narration Systems play a key role in ensuring the validity of information. Manual intervention should be limited and carefully analyzed. For derived information, consistency in the use of assumptions, formulae, units of measurement, conversions etc should be ensured. Periodic internal and external audits on select metrics reported provide additional comfort on the internal records, processes, and systems used to collect, analyze, and report data.

To be impactful, the report should engage the stakeholders and take them along on the organization's sustainability journey. This can be achieved by providing the following information: - vision, mission, strategies, objectives, and goals - risks foreseen and plans to mitigate the risks - key initiatives that were taken to convert the plan into action - performance measures that track the actuals vs goals To provide data and narration, formats (i.e., graphs, tables, storyboards, and pictorial form), should be chosen to provide clarity, conciseness, and comparability. The report should provide the big picture with relevant granular information. The report should be factual and balanced including both positive and negative outcomes.