SME Guide to Impact Reporting: Turning Values into Visible Impact

What is an Impact Report??

Let's start at the beginning. An Impact Report is a document that describes your business's initiatives and accomplishments in effecting positive change in society and the environment. In essence, it's your business's report card, but instead of grades, it measures your ethical and sustainable practices. These reports serve as a transparent way to demonstrate to stakeholders, like customers, investors, and employees, that your company is not solely driven by profit but is also committed to social and environmental causes.?

Why Now??

Impact Reports have gained significant traction in recent years for several reasons:?

1. A Tool for Communicating: Businesses are typically doing great things in their community, for the environment, and as employers. Impact Reports are a tool to share these activities, celebrate successes, and outline future plans.?
2. Larger B2B Customers are Reporting: While SME’s may not be required to do any kind of sustainability measurement or reporting, many larger companies in Australia and internationally are beginning to place greater emphasis on the impact of their suppliers.??
3. Government Entities are Interested: When working with government clients, impact reports and sustainability strategies are becoming essential. During the tender procurement process, SMEs are being asked about their goals and initiatives. Increasingly, government agencies are also requiring suppliers to report on their commitments and progress when working with various levels of government.?
4. Transparency is Currency: Stakeholders expect transparency from businesses. They want to see beyond the glossy website and policies and into the guts of your operations. An Impact Report provides that transparency, building trust with your employees and customers.?
5. Risk Mitigation: The business landscape is complex. Climate change, supply chain disruptions, and evolving regulations pose real threats. Impact Reports serve as early warning systems, helping SMEs identify potential risks and prepare strategies to navigate them effectively.?

Where to Start?

• Understand Your Value Chain: Mapping out your entire value chain, including the areas outside of your control, will give you the first indications of where your business may be impacting the planet and society.?

• Start Measuring: Create a reliable data collection and management plan. Start small, looking to measure what you have reliable and easily accessible data for, like electricity use.?

• B Corp Guidelines: B Corps are at the forefront of ethical business practices. Their guidelines are an excellent starting point for SMEs venturing into Impact Reports. These guidelines encompass a wide range of areas, from environmental practices to fair wages, providing a comprehensive framework to align your business with ethical standards.?

• Corporate Sustainability Reporting Directive: If your SME operates within the European Union, the Corporate Sustainability Reporting Directive is a game-changer to watch. This directive is set to reshape sustainability reporting, with a specific focus on SMEs. Staying informed about its developments is crucial for compliance and competitive advantage.?

• GRI Materiality: The Global Reporting Initiative (GRI) suggests that materiality is the cornerstone of impactful reporting. Materiality refers to the issues that are most significant to your business and stakeholders. Instead of trying to cover everything, focus on what truly matters. This targeted approach makes your Impact Report more concise and relevant.?

What Great Impact Reports Look Like?

Creating an impactful Impact Report doesn't have to be daunting. Here are seven elements that exceptional Impact Reports have in common:?

1. Clear Purpose: Define why you're creating an Impact Report. Is it to build trust with customers, meet regulatory requirements, or communicate your sustainability efforts to investors? A clear purpose will guide your efforts and ensure your report serves its intended function.?
2. Materiality Matters: Materiality is the guiding principle in impact reporting. It emphasises focusing on issues that are most relevant to your business and stakeholders. Highlight the areas where your actions have the greatest impact.?
3. Share Your Measures: Support your claims with data. Metrics and figures add credibility to your report. Quantify your environmental achievements, social contributions, and governance practices. Data lends substance to your narrative.?
4. Engage Stakeholders: Don't start on this journey alone. Engage your employees, customers, and local communities. Their perspectives and feedback are invaluable. Stakeholder engagement enhances the authenticity of your report.?
5. Transparency: Transparency is the bedrock of trust. Be open about your successes and failures. Transparency in your Impact Report shows stakeholders that you have nothing to hide. It fosters a sense of accountability.?
6. Set Targets: Share your sustainability goals and how you plan to achieve them. A roadmap to progress demonstrates your commitment to continuous improvement. Setting targets helps you measure your impact over time.?
7. Stories Matter: Numbers and statistics are essential, but stories resonate on a deeper level. Share real-life examples and anecdotes that demonstrate your impact. Personal stories make your report relatable and memorable.?

Why Start Now??

• Builds an Annual Process: Make impact reporting an annual ritual. Incorporating it into your business calendar ensures accountability. It demonstrates that your commitment to sustainability is not a one-time affair but an ongoing journey.?

• Accountability: An Impact Report holds your business accountable. It serves as a documented commitment to your sustainability goals. Having a report card encourages you to stay on course and continually improve.?

• Consolidate All Plans: As your business grows, sustainability initiatives may proliferate. An Impact Report consolidates all your sustainability plans and efforts in one place. It acts as a reference point for everyone involved in your business, keeping everyone aligned with your mission.?

• Demonstrating Authenticity and Transparency: In today's world, authenticity and transparency are highly valued. An Impact Report provides evidence that you're not just making empty promises but are genuinely committed to ethical and sustainable practices. It demonstrates to your stakeholders that you're not just talking the talk but walking the walk.?

For a practical approach to creating your Impact Report, contact us at [email protected]