How to harmonize the sustainability reporting of your business unit with your parent company

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Part of international company Engie Group, Engie North America is a power generator, energy services company and retail electricity supplier committed to shaping a more sustainable future throughout the United States and Canada.

In 2019, our business unit produced its inaugural sustainability report to provide more localized, relevant performance data and better connect with our local stakeholders.

Building on a parent company’s reporting to address local needs can be challenging, and we learned a lot through this process. Here are some tips we would like to share:

Tip 1: Don’t overfocus on reporting frameworks

This may be controversial in the sustainability reporting world, but Engie North America opted out of using a specific framework for its report.

Why? For two reasons:

  1. Our parent company produces an annual integrated report with consolidated data, which uses the International Integrate Reporting Council’s International (IR) Framework. This report is particularly useful for investors and CSR rating agencies that rely on the standardization provided by frameworks.
  2. We wanted our report to be localized, easily understood by our stakeholders and relevant in terms of information and data.

Adhering to a reporting framework made it more difficult to achieve these goals. If your parent company is using a well-known framework, we recommend aligning with how parent company data is reported but also recommend being creative and communicating with local stakeholders in the most effective way possible. In other words, don’t overthink the use of reporting frameworks.

Tip 2: Start by explaining the sustainability positioning of your parent company

We suggest beginning the report by explaining the parent company’s business and sustainability strategy, even if that doesn’t seem pertinent at first sight.

This helps stakeholders recognize the overall purpose of the company and how its strategy aligns with environmental and social issues. You may also want to briefly highlight the efforts of your parent company in terms of non-financial performance and recognition from different CSR ratings.

Tip 3: Explain who you are as a business unit or subsidiary

After that, you’ll probably need to provide more details about your entity.

What part does your organization play within the larger company? What makes it unique? How does its strategy align or differ from the parent company?

Providing an overview of your entity, highlighting performance and explaining to the reader where it fits in the strategy of the parent company can help set the tone for the rest of the report.

Tip 4: Use interviews and testimonials with local partners and CSR leaders

We felt it was essential to provide insights from our partners that are engaged in the energy transition and in similar sustainability initiatives.

These partners can be customers, NGOs, trade associations, suppliers or employees. Partner insights can provide useful supplemental information, increase credibility and help the reader connect to the material.

Tip 5: Highlight sustainability objectives

Does your parent company have sustainability objectives? You absolutely want to highlight the long-term objectives of your parent company, because it dictates a subsidiary or business unit’s strategy and daily actions.

Objectives also pave the way for common measurement and facilitate knowledge sharing, so they can provide readers with a great deal of insight into a company’s approach to sustainability.

If available, you should also highlight the entity’s planned contribution to global objectives and any short-term targets that have been set by the entity.

Tip 6: Focus on local performance data

While it can be helpful to highlight some sustainability performance data from the parent company, the report should focus on business unit or subsidiary performance. This data probably will be much more interesting to a local stakeholder.

You can collect all the necessary local data from the various functions around your entity, but you should ensure alignment with how performance data and metrics are reported by the parent company. This will help readers better understand local sustainability performance and make easier for to connect local performance with parent company performance and objectives.

Tip 7: Tell them what you do

Because it has a more local focus, a business unit or subsidiary sustainability report provides a great opportunity to get into detail about the work your company performs. Make sure you summarize your business but also provide local, concrete examples of the type work you do for customers — how your company makes money.

This may feel like a blatant marketing exercise, but this information can be essential, and these details are often missing from parent company sustainability reports. By providing more information and examples of the type of work you do as an entity, the reader will have a better understanding of your business and the related sustainability impacts.

Tip 8: Translate what you do into impact data

In addition to discussing what you do as a company, talk about how the work your company performs impacts stakeholders in terms of local environmental and social performance. This probably sounds obvious, but to effectively show impact, it helps to provide data.

For example, in our report, we discuss the avoided emissions associated with our renewable energy assets, and the avoided emissions associated with the energy efficiency services we provide. For social impact, we provide data regarding our engagements with educational institutions and data regarding the jobs we support and gross domestic product we generate in the U.S. and Canada.

This helps the report to move beyond basic performance data and bridges the gap between the work the entity does and the environmental and social outcomes of that work.

Romain Reboux

Source: https://www.greenbiz.com/article/how-harmonize-sustainability-reporting-your-business-unit-your-parent-company-sponsored

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