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Ext. PublicationThe Imperative of Continued Sustainability Reporting
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Companies will continue to report on environmental and social performance because the demand for insight — from investors, lenders, customers and employees — is not going away. Reporting creates the discipline to measure what matters, integrate responsible business practices into core operations and demonstrate progress in ways that resonate across stakeholders. As a result, it has become a business function that supports decision-making, operational efficiency and long-term value creation.
In A Practical Guide to Validating the Business Purpose of Sustainability, we introduced a structured approach for validating the business purpose of sustainability. When combined with an understanding of the demand drivers shaping the market for reporting and tracking these initiatives, organizations can distinguish themselves as forward thinking — with a 360-degree view of risks, opportunities and long-term performance.
Some stakeholders may question the necessity of a sustainability report, or more broadly, what the future of this reporting looks like. Several factors underscore the importance and benefits of staying the course when it comes to working toward your organization’s sustainability goals and programs, and ultimately, reporting.
- Access to capital: Transparency in sustainability reporting aligns with the expectations of institutional investors and lenders, supporting access to capital and demonstrating responsible business practices. According to the Center for Audit Quality, 98% of S&P 500 companies share ESG-related data — an indication that such reporting has become a widely adopted standard among leading corporations.
- Operational efficiency and cost savings: Tracking and measuring sustainability-related operations like energy and water usage through sustainability reporting can uncover efficiencies that may have otherwise been unknown. By implementing these functions, organizations have opportunities to reduce costs and improve efficiency, directly impacting your company’s bottom line.
- Human capital and workforce stability: Reporting on human capital programs plays a key role in attracting and retaining talent. In a competitive labor market, employees value organizations that invest in professional development, workplace culture and well-being. Highlighting a commitment to these areas strengthens an organization’s reputation as an employer of choice, reduces turnover costs and supports business continuity.
- Regulatory preparedness: Proactively aligning with emerging state and international disclosure requirements positions organizations to efficiently meet future regulatory demands. As the U.S. Securities and Exchange Commission (SEC) pulls back, states like California, New York, New Jersey, Colorado and Illinois are advancing aggressive climate disclosure laws that will impact both public and private companies, explains a climate policy journalist in recently published article. These state regulations mandate climate-related risk reporting and greenhouse gas (GHG) emissions disclosure — including Scope 3 emissions — beginning as early as 2026.
Note: California regulations were passed in 2023, with reporting required in 2026, using 2025 data. Many other states modeled their regulations on California. View this helpful chart of the requirements and timelines.
- Market competitiveness: Maintaining ESG or sustainability reports ensures competitiveness and responsiveness to stakeholder expectations. Illustrating this trend, 98.6% of companies in the larger half of the Russell 1000 by market capitalization — which roughly aligns with the S&P 500 — publish sustainability reports, indicating a significant commitment to ESG initiatives across industries. Building these reports also creates a bank of content that can drive sales materials, website updates, email campaigns and social media engagement, keeping the company’s messaging sharp and aligned with market demands.
- Reputation and risk management: A well-structured ESG strategy helps mitigate reputational risks and reinforces credibility with customers, partners and regulators. Proactively managing environmental and social impacts strengthens operational resilience in an increasingly scrutinized market. We’ve described the criticality of conducting climate risk assessments and how it not only demonstrates foresight, for example, but can also help lower insurance premiums and capital costs by identifying and mitigating potential risks before they escalate.
While the format and delivery of reports may look different years from now, the foundation and value of doing the reports may likely remain. There is a business imperative to understand how climate risk, efficient operations, employee well-being and other ongoing factors can impact your business. Stakeholders will want to know how these factors impact your organization and ultimately, how it affects them. Weaver can help you navigate this changing landscape. Contact us today.
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