In recent years, sustainability has become a central concept in corporate strategies, including the banking sector. Sustainability reporting has become a key tool for communicating the commitment to a more sustainable future. In this blog post, we will explore what you should consider when it comes to reporting sustainability in the banking sector, with a particular emphasis on digital sustainability, including website emissions.
What Is Sustainability Reporting
Sustainability reporting is a document that allows companies to monitor, evaluate, and communicate their performance in terms of social, environmental, and governance responsibility. These reports go beyond traditional profit and loss measurements, providing a comprehensive view of a company’s impact on society and the environment. Because of this characteristic, they are also referred to as Non-Financial Statements (NFS).
In an era where sustainability is in the spotlight, reporting on these aspects has become crucial to demonstrate commitment to corporate responsibility. In the European Union, non-financial reporting is already mandatory for some companies and will become mandatory for many more by 2028. For more information on this topic, please refer to our content on EU Sustainability Reporting Obligation.
How to Report in the Sustainability Report
Before discussing what to include, it’s important to remember how. Currently, there are no specific constraints, and companies can operate freely. However, for practicality and simplicity, especially when preparing the first sustainability reports, most companies refer to established international standards. The two main ones are:
- The Global Reporting Initiative (GRI) Standards: GRI is an international framework used for reporting a company’s sustainability performance, providing guidelines and indicators for structured communication of environmental, social, and economic impacts.
- The GHG Protocol: GHG Protocol is an international standard for measuring and managing greenhouse gas emissions by companies and organizations, enabling them to calculate and consistently report their carbon emissions.
- SDGs: also known as the United Nations Sustainable Development Goals, are a set of 17 global goals aimed at promoting prosperity, peace, and sustainability by 2030. They address challenges such as poverty, gender equality, education, health, and environmental sustainability. They are not actually a standard but a declaration of intent.
- ISO Certifications: international standards that define requirements and guidelines to ensure the quality, safety, efficiency, and sustainability of products, services, and business management systems. They are used to improve performance, competitiveness, and compliance with global standards. Some ISO certifications are environmental certifications that help report specific processes or events.
- Other standards: There are numerous other standards in addition to those mentioned above, which are less commonly used but can still be useful depending on the company and industry. Examples include the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures (TCFD).
Choosing the reference framework is the first step to simplify the choice of what to include in the sustainability report.
What Elements Does the Sustainability Report Contain
In sustainability reports, it is essential to include a series of key elements to provide a comprehensive view of a company’s commitment to sustainability. These elements may vary depending on the specific needs and goals of the company.
The main purpose of the sustainability report is to promote transparency and communication regarding the company’s conduct. Therefore, a sustainability report should include:
- Information about the organization
- Identification of stakeholders and their expectations
- Identification and evaluation of relevant sustainability issues
- Company’s commitment
- Risk and opportunity management
- Data collection, analysis, and reporting
- Progress, developments, and new initiatives
- Communication with stakeholders
In summary, the sustainability report serves as a fundamental tool to demonstrate commitment to sustainability, engage stakeholders, and improve sustainable business performance by promoting transparency and communication throughout the process.
Once it is clear which sections a sustainability report should include, starting to draft it becomes much simpler. However, one of these sections usually raises more doubts and is the part related to reporting environmental activities.
Environmental data can be divided into areas such as:
- greenhouse gas emissions
- energy consumption
- other resources (water consumption, waste generated and recycled, land use, raw materials, etc.)
Let’s focus in particular on emissions.
Reporting Emissions in the Sustainability Report
Here, the standards mentioned earlier come to the rescue. Most of them make a distinction in emissions reporting, introduced by the GHG Protocol and divided as follows
- Emissions Scope 1 – Direct emissions of greenhouse gases (GHGs) that a company produces directly. Examples include combustion vehicles (not electric ones!), blast furnaces, various types of combustion.
- Emissions Scope 2 – Indirect emissions that the company produces indirectly. This mainly includes purchased electrical energy, which does not cause emissions when used by the company but has emissions during its production.
- Emissions Scope 3 – Emissions not associated with the company itself but related to its value chain and of which the company is indirectly responsible. This includes third-party goods transport, business travel, waste disposal, and product use.
The most commonly used standards suggest using CO2e (carbon dioxide equivalent) as the unit of emissions measurement. Emissions of the following are usually reported:
- Direct use of fossil fuels
- Company vehicles and fleets
- Production of the electrical energy used in the company
- Heating and cooling
- Business travel
- Production
- Product logistics
- Product use
- Product disposal
Increasingly, emissions generated by the supply chain, both upstream and downstream, are also included for activities performed on behalf of the reporting company.
Including Digital Sustainability in the Sustainability Report
Digital sustainability is becoming increasingly relevant for companies, and we will see it appearing more and more in sustainability reports. In fact, websites also significantly contribute to energy consumption and, consequently, to CO2 emissions.
If you want to make the sustainability report as complete, comprehensive, and transparent as possible, it is strongly recommended that all companies with a website include it in the report.
The measurement carried out by Karma Metrix is expressed in CO2e and is aligned with the main international standards, such as the GHG Protocol Corporate Standard and GRI 305 emissions. It is fully aligned with the United Nations Sustainable Development Goals (SDGs), making a tangible contribution to the global ambition to address crucial environmental and social challenges.
These data can be directly incorporated into the organizations’ sustainability reports, providing a tangible way to demonstrate commitment to the SDGs and report progress toward these goals to stakeholders.
Among the customers who have already included Karma Metrix and website emissions in their sustainability reports are UnipolSai, Iren, Gruppo RCS (Gazzetta dello Sport and Corriere della Sera), and Trenord.
Conclusion
The future of sustainability reports is destined to be more integrated and comprehensive, also due to expected regulatory developments. Organizations that embrace this vision will not only be better positioned to address global challenges but will also have the opportunity to thrive in a world that demands sustainable change. Sustainability is not just a corporate goal but will increasingly become a requirement from consumers, partners, and the supply chain.
Are you ready to act?
Feel free to contact us without any commitment. We will explain how you can also join the companies that have already chosen to embark on a digital sustainability journey.
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