Future trends in sustainability reporting

Sustainability reporting is set to change a lot in the next few years due to new rules, higher expectations from stakeholders, and new technology. Here’s how:

1. Stricter Rules

Governments are making companies follow tougher rules for sustainability reporting. For example, the European Union’s new rules (CSRD) require detailed information on environmental, social, and governance (ESG) factors. Companies will need to provide more thorough and standardized information about their sustainability efforts​ (IMD Business School)​.

2. Better Data Accuracy

Companies will need to improve the accuracy and verification of their sustainability data. This means they will use more rigorous methods to collect and check data, including third-party audits and advanced data analysis tools to ensure the information is reliable​ (Plan A)​.

3. Advanced Technologies

New technologies like blockchain, artificial intelligence (AI), and the Internet of Things (IoT) will help improve transparency. Blockchain can keep unchangeable records of sustainability data, while AI and IoT can provide real-time monitoring and reporting of environmental impacts​ (IBM – United States)​​ (Plan A)​.

4. Broader ESG Metrics

Future reports will cover a wider range of ESG metrics, including social and governance factors, not just environmental ones. This will give a more complete view of a company’s sustainability performance and its impact on various stakeholders​ (IMD Business School)​.

“Around 40% of global emissions come from buildings, and most of these result from the ways we heat our homes and businesses. Switching to cleaner, low-carbon options will play a critical role in tackling climate change.” Nationalgrid.com

5. More Stakeholder Engagement

Companies will use interactive platforms and digital tools to engage more directly with stakeholders. They will share their sustainability efforts and get feedback from investors, customers, and the public, which will build trust and accountability​ (Plan A)​.

6. Global Standards Alignment

There will be a more accurate alignment of sustainability reporting with global standards like the Task Force on Climate-related Financial Disclosures (TCFD) and the Global Reporting Initiative (GRI). This will help standardize practices across industries and regions, making it easier to compare different companies’ sustainability efforts​ (IMD Business School)​.

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7. Climate Risk Transparency

With more awareness of climate change, companies will need to be clear about their climate-related risks and opportunities. They will disclose their exposure to these risks and their strategies to manage them, helping investors and other stakeholders understand their long-term sustainability​ (Plan A)​.

In summary, sustainability reporting will become more detailed, accurate, and standardized, driven by new regulations, technological advances, and the need for greater transparency and accountability.