When businesses begin collecting sustainability data, they often focus on numbers first, such as amount of energy consumption or greenhouse gas emissions. However, by first crafting a simple sustainability policy, you can save time and frustration down the road. A sustainability policy can provide a solid foundation for your reporting. It can help make sure that your whole team is on the same track.
How a sustainability policy can help with your reporting:
- Creates accountability
- By assigning responsibilities to teams and individuals
- Sets clear metrics
- Defines what data the company prioritizes for reporting
- Defines goals and targets
- Provides a foundation
- Provides a solid baseline to compare progress against
- Discusses why reporting is important for the company
- Prevents greenwashing
- Ensures that your report includes only verifiable accomplishments
- Discourages vague claims without backup data
- Ensures continuity and aids in decision-making
- Outlines what should happen in case of structural changes in the company (for example, when should baseline data be updated to reflect changes in operations)
Is a sustainability policy required for sustainability reporting?
Some but not all standards require a description of a company’s sustainability policy or policies. The GRI Standards, one of the most widely used sustainability reporting standards globally, emphasize policies and commitments that guide a company’s actions.
For example, Under GRI 2: General Disclosures 2021, organizations reporting in accordance with the GRI Standards are asked to describe their policy commitments for responsible business conduct. They also need to explain how those commitments are put into practice. This can include commitments related to environmental protection, ethical business practices, and legal compliance.
What’s more, companies may need to explain how responsibilities are assigned, how policies are integrated into operations and business relationships, and how employees are trained or informed.
There are three key things to know about policies when using the Global Reporting Initiative (GRI) Standards to report:
- GRI does not require small organizations to have a separate policy for every topic.
- Organizations reporting in accordance with GRI are required to disclose their overall responsible business conduct policy commitments under GRI 2-23.
- For each material topic, GRI 3-3 requires organizations to describe relevant policies or commitments for managing that topic. Material topics are what your organization has determined are the most impactful ones to report on (see GRI 3: Material Topics for more details).
TIP: There are two approaches to using the GRI Standards when reporting. You choose one over the other based on your sophistication level and experience with sustainability reporting:
Reporting “in accordance with” the GRI Standards or
Reporting “in reference to” the GRI Standards
It’s acceptable for small businesses to report “in reference to” the Standards; this is much less onerous than reporting “in accordance with.”
When you are just starting to tackle sustainability reporting, you don’t need to create a huge library of policies. A simple, clear sustainability policy can be a practical starting point. For example, a company might commit to measuring its energy use and greenhouse gas emissions, reducing waste where possible, complying with environmental laws, and contracting only with suppliers who meet certain sustainability thresholds.
The key is to make sure the policy reflects how your company approaches sustainability, which commitments you’re making, and how you will turn those commitments into measurable actions.
A good first step: Choose your most important sustainability topics, write down your commitments, assign responsibility, and track your progress.
See below for a list of potential topics to include in your sustainability policy:
- Core policies almost every business should consider
Responsible Business Conduct / Code of Conduct
Human Rights and Labor Practices
Environmental or Sustainability Policy
Health and Safety
Anti-corruption and Ethical Business Conduct - Environmental policies based on your business’s activities and impacts
Climate and Greenhouse Gas Emissions
Energy Consumption
Water Consumption
Waste and Recycling - Supply-chain policies
Supplier Code of Conduct
Responsible Procurement Policy
Supplier Environmental Requirements
Supplier Human Rights and Labor Requirements
TIP: If you are reporting using ISO 14064 or to comply with the new California climate disclosure regulation (CA SB253), it is not required to have a sustainability policy on record.
By taking the time to craft a basic sustainability policy for your company now, you will ensure that your future reporting is done more easily and accurately. It will help ensure that you have accountability and that your staff all know the correct path to follow when reporting. It can also help you win business with clients who prefer working with suppliers that have clear policies in place.
Solar panel image by jamal39 from Pixabay
You can use our free editable small business Sustainability Policy Template and get started crafting your own policy today. Simply click on the button below to download your template and instructions.
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