The Surprising Connection Between CARFAX and Sustainability

In 1984, two enterprising entrepreneurs, Ewin Barnett and Robert Daniel Clark, started CARFAX?. The entrepreneurs introduced what was to become known as the CARFAX Vehicle History Report. At that time, these reports primarily focused on whether a car had been in an accident. ?

However, today, these reports are far more comprehensive. According to their website, a CARFAX report is now a "complete report of all publicly available information about a vehicle. The data includes the history of owners, maintenance, accidents, and many other events affecting the vehicle's value and operability. These reports help inform car buyers about the vehicles they are looking at."

So, now that we understand what's in a CARFAX report, how can we connect these reports to sustainability reporting? Surprisingly easily.

First, a definition. Sustainability reporting is:

The process of communicating an organization's environmental, social, and governance (ESG) performance to stakeholders. These stakeholders can be investors, employees, vendors, and customers.??

Just as a CARFAX report reveals a car's maintenance and upkeep journey, sustainability reports reveal a company's sustainability journey. This type of reporting is becoming more and more commonplace and will grow significantly in importance in 2024, and in years to come.?

Why? Why is sustainability reporting growing?

With the growing emphasis on sustainability, it is one of the few ways an organization can demonstrate its commitment to sustainability and the progress it is making toward operating more sustainably. For instance:

• Just as consumers decide on purchasing a vehicle based on its CARFAX report, the many stakeholders mentioned earlier use the report to determine how efficiently the company is operated, what steps it has taken to reduce risks such as climate and environmental risks, and how sustainability has helped the organization reduce operating costs.
• Sustainable reporting helps businesses take a solid step ahead of their competitors, retain new and larger customers, more significant investors, and garner the interest of new employees, many of whom now want to work with sustainability-focused companies.

Creating a Sustainability Report

If it’s your organizations intention to begin preparing a sustainability report in 2024, here are some key things to remember:

·?????? It should be clear and concise. Avoid technical terms and jargon. It should be written so it is engaging and easily understood by “techies” and laypeople alike.

·?????? Organize it logically using a table of contents and subheadings to make it easier to understand.

·?????? Use a recognized sustainability reporting framework. This helps stakeholders compare your organization to similar organizations. The Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) are considered solid sustainability reporting frameworks.

·?????? Identify and report on the ESG issues that are most relevant to your organization and stakeholders. This can vary depending on the industry, so focus on those factors that have the most significant impact on your business, the environment, and society.

·?????? Set clear, ambitious goals for your sustainability performance. Goals should always be measurable, reporting on your progress in achieving your goals.

·?????? The report should include data, solid evidence, and case studies supporting your sustainability performance. Having this data provided by an independent, third-party organization adds further credibility.

·?????? Be accountable. Should questions arise about your sustainability report, be prepared to answer them with facts, graphs, and infographics.

·?????? Finally, never "greenwash" the report. The Corporate Finance Institute?says sustainability greenwashing is “when the management team within an organization makes false, unsubstantiated, or outright misleading statements or claims about the sustainability of a product or a service, or even about business operations more broadly.”? Greenwashing sustainability reports rarely works out well.

Please watch this short video to learn more about sustainability reporting and its connection to CARFAX reports.

And if you have questions, don't hesitate to get in touch with me.

Steve Ashkin is president of the Ashkin Group, a consulting firm specializing in Green Cleaning and sustainability. Steve is recognized as one of the one hundred most important contributors to the professional cleaning industry in ISSA’s 100-year history.

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