A successful business starts by discovering what clients, customers or users want and need and then figures out how to deliver them in a way that works for the business. Competitive advantage is a lot closer to being realized when companies also figure out a way to differentiate themselves from others that share their space. Traditionally businesses have looked within their own operations to find and create differentiators based on price, marketing and service and product offerings. But what if we expand the notion of competitive advantage to include those things that may be less tangible; those things that contribute to the overall experience everyone has with your business.
Sustainability reporting is the new buzzword for corporations looking to speak to stakeholders who have higher expectations of corporate responsibility – stakeholders like customers, investors and internal interests – who are looking for a business that embraces and provides a more holistic experience. Sustainability reporting is a process for publicly disclosing an organization’s economic, environmental, and social performance (triple bottom line). Many organizations are finding that financial reporting alone is no longer satisfying the need for information about overall organizational performance; it is no longer contributing to the kind of experience many stakeholders expect of the businesses they engage with.
According the report The Business of Sustainability: Imperatives, Advantages and Actions, produced in collaboration with the Boston Consulting Group and MIT Sloan Management Review, executives surveyed said they weren’t fully exploiting the opportunities and mitigating the risks that sustainability presents. The majority of actions taken thus far have been those necessary to meet regulatory requirements. But, a small and growing number of companies are acting aggressively on sustainability — and reaping substantial rewards. Companies pursuing sustainability initiatives in earnest are unearthing opportunities to reduce costs, create new revenue streams, and develop more innovative business models, creating competitive advantage.
Some key benefits of sustainability reporting are:
> Improved financial performance — reporting helps to identify opportunities for reducing operating costs and improving efficiencies
> Advantage over competitors — there is a short window of opportunity before companies will lose first-mover advantage
> Improved stakeholder relationships — demonstrating a commitment to sustainability builds trust with customers who will come to expect it, encourages communication and improves reputation
> Improved investor relationships — allows companies to gain better access to investor capital, benefiting from the growing demand for ethical investment funds
> Improved risk management — understanding risks and dealing with them appropriately reduces liabilities, avoids loss of reputation and saves time and money
> Be ahead of the game — organizations positioning themselves ahead of the increased regulations that are likely to occur can take advantage of incentives offered to early adopters
> Allows vendors of larger corporations (who are embracing sustainability more enthusiastically and will influence the supply chain) to provide them with sustainability reporting information before their competitors do
> Creates opportunities to develop innovative products and services and access new markets and business opportunities
> Ability to better recruit and retain employees
The economic, environmental and social sustainability of organizations will become increasingly important over time, and the risks of failing to act decisively are growing. Companies should look to better understand the implications and benefits of sustainability reporting for their business. Akendi’s experience design approach provides a scientific and systematic method for the creation of sustainability reports that allow organizations to clearly communicate their desire for increased social responsibility, and their performance, in the most meaningful way to customers and users.
Athena Herrmann