Four Sustainability standards you should know about!

Whether you’re in the beginning stages of making your company more sustainable, or have already made some headway, your company could benefit from using sustainability standards. From an economic perspective, the standards may help you increase your productivity and efficiency. From an environmental and social standpoint, using standards can help you ensure that your company is increasing its positive impact on the world.

There’s a lot to know when it comes to sustainability standards. Luckily, we’re here to help you keep track of it all. In this post we will be covering the best-known and most widely-used sustainability standards, including:

1. Global Reporting Initiative (GRI)

2. Sustainability Accounting Standards Board (SASB)

3. ISO 14001

4. Integrated Reporting

Of course, the standards alone are not enough, you also need to set sustainability goals. That’s why we will look at:

• Sustainable Development Goals (SDGs)

• Science-Based Targets initiative (SBTi)

Buckle up.

1. What are the GRI Standards?

We’ll start with the most-used standards for sustainability reporting, the Global Reporting Initiative (GRI) Standards.

The goals of GRI are twofold. The non-profit aims to:

1. Help organizations take responsibility for their impacts, and

2. Establish a global, common language through which organizations can communicate those impacts.

GRI has created the GRI Standards, which are designed to help organizations like yours prepare and report information related to your environmental, social, and economic impacts. The GRI Standards are freely available to the public, so that any organization can use them to increase their transparency to stakeholders.

The GRI Standards are divided into four groups: the 100 Series or the "Universal Standards," and three topic-specific Standards: the 200 Series (economic), the 300 Series (environmental), and the 400 Series (social).

Overview of the GRI Standards, source: GRI

Here’s a quick run-down:

1. The Universal Standards

As the name suggests, the Universal Standards are applicable to all reporting organizations, including yours. The Universal Standards include:

• Foundations, which explains the GRI Standards system and how to use them

• General Disclosures, which entails providing details about, among other things, the organization and its reporting practices, activities, and governance.

• Material Topics, which is about identifying the material topics of the reporting organization, in other words, the topics that reflect the organization’s most significant impacts on the environment, people, and economy.

2. The 200 Series: Economy

The 200 Series centers around economic sustainability. The 200 Series is not about the financial condition of the organization itself, but rather the impact that the organization has on the economic conditions of its stakeholders and on the economic systems at a local, national, and global level. Some of the economic topics include anti-competitive behavior, tax, and anti-corruption.

3. The 300 Series: Environment

The 300 Series is all about the environment, specifically, the organization’s impacts on natural systems, such as land, water, air, and ecosystems. Some of the environmental topics include emissions, biodiversity, and waste.

4. The 400 Series: Social Systems

The 400 Series focuses on how the organization impacts the social systems surrounding it. Some of the social topics include non-discrimination, child labor, and customer privacy.

In closing, using the GRI Standards will allow your organization to publicly disclose your most significant sustainability impacts and how you manage them, in a way that is in accordance with a universally-accepted standard.

2. What are the SASB Standards?

The Sustainability Accounting Standards Board (SASB), has published standards with the goal of developing the market standard for the disclosure of sustainability information to investors. Out of all the information that could be used to communicate to all the various stakeholders of a company, such as customers, employees, and regulators, SASB focuses on the subset of information that impacts the organization's financial performance.

SASB recognizes that different industries may have different ways of solving the same sustainability issues. Therefore, SASB has created different standards for 77 different industries such as the consumer goods, health care, and transportation industries.

The standards cover issues relating to five sustainability dimensions including environment, social capital, human capital, business model and innovation, and leadership and governance. Each of the dimensions contains a number of subtopics, such as air quality, human rights, and competitive behavior, totaling about 30 issues. From these 30 issues, the ones most likely to impact financial performance in a given industry are identified.

So, what’s included in the standards themselves? Each industry standard includes an average of 6 disclosure topics related to the most relevant sustainability dimensions for that industry. The disclosure topics are accompanied by:

• A definition of the disclosure topic,

• Accounting metrics for each disclosure topic,

• A technical protocol that provides guidance on how to compile the data, and

• Activity metrics for normalizing the data.

In summary: using the SASB standards can help your company become more transparent about its sustainability as it relates to financial performance in a way that is specific to your industry.

3. What is ISO 14001?

The International Organization for Standardization (ISO) is a group that has created 24,000 international standards that cover nearly every aspect of manufacturing and technology. ISO 14001 is all about environmental management systems (EMS). It includes defining the requirements for an EMS, providing guidance on implementation, and recommending controls for processes that have environmental impacts. Some of the environmental issues that ISO 14001 requires organizations to consider include:

• Air pollution,

• Water and sewage issues,

• Waste management,

• Soil contamination,

• Climate change mitigation and adaptation, and

• Resource use and efficiency.

The standards are designed to be applicable across all business sectors and industries and aim to create a framework for companies and organizations to follow in order to set up an effective EMS. The standards contain five key elements:

1. Environmental policy,

2. Planning,

3. Implementation and operation,

4. Checking and corrective action, and

5. Management review.

In addition to ISO 14001, a few other standards belong to the ISO 14000 family and are designed to be complementary to ISO 14001. These include:

• ISO 14004 - for the establishment, implementation, maintenance, and improvement of an EMS and its coordination with other systems,

• ISO 14006 - for helping organizations that already have an EMS in line with ISO 14001 to implement eco design into other management systems, and

• ISO 14064-1 - for organization-level principles and requirements for the reporting and quantification of greenhouse gas emissions and removal.

4. What is Integrated Reporting?

Integrated Reporting is a framework created by the International Integrated Reporting Council (IIRC). Integrated Reporting recognizes that organizations draw on different resources available to them in order to create value over time. These resources are called the Capitals, and the IIRC identifies six of them:

The Integrated Reporting Capitals, source: IIRC

Using Integrated Reporting can help your organization to think more holistically about its strategies and use more future-oriented communication, as the framework requires companies to think about their plans in the context of their impacts on the different Capitals. Integrated Reporting can therefore help your company to make better-informed decisions, take advantage of key opportunities, and manage risks.

The Bottom Line

That was a lot to take in. Here’s a quick summary:

Sustainability standards alone are not enough

So now we’ve looked at all sorts of ways to track your impacts, but unfortunately that alone does not make you a sustainable company.

Afterall, if a restaurant throws away 50% of the food it buys every week, just knowing that half of its food goes to waste, and the associated environmental impacts, does not make the restaurant more sustainable, right?

So what’s missing? Goals.

Say the restaurant owner decides she wants to throw away less food. After coming to the conclusion that she is currently throwing away 50%, she needs to set a waste reduction goal and work towards it.

Luckily, there are two frameworks for setting sustainability targets that can go hand-in-hand with your measuring:

• Sustainable Development Goals (SDGs)

• Science-Based Targets initiative (SBTi)

What are the SDGs?

Let’s go back to the basics. The Sustainable Development Goals (SDGS), are 17 integrated goals that were adopted by the United Nations in 2015. The SDGs are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.

These are the Sustainable Development Goals:

The 17 integrated SDGs, source: the United Nations

Each SDG has a number of specific targets, and there are 169 targets in total. For example, target 12.6 is to "Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle."

Companies are increasingly declaring their business practices to be in line with the SDGs. While there is a thin line to walk between making a real difference and so-called "SDG-washing," it is well worth it for your company to assess whether it is already helping progress towards any of the targets, or whether you can adjust your business activities to be in line with the SDGs.

What is the SBTi?

The Science-Based Targets initiative (SBTi), aims at providing organizations with a clear path towards reducing their greenhouse gas emissions that is in line with achieving the Paris Agreement goals. In other words, the targets set have to contribute towards limiting global warming to well below 2 degrees Celsius, preferably 1.5 degrees Celsius, above pre industrial levels.

In order to have officially set Science-Based Targets, an organization must go through a 5-step process that includes:

• Submitting a letter of intent to set an SBT,

• Working on an emissions reduction target in line with SBTi’s criteria,

• Presenting the target to SBTi for official valuation,

• Announcing the target and informing stakeholders, and

• Reporting company-wide emissions and tracking target progress annually.

To be approved by SBTi, the targets must meet rigorous criteria, including to:

• Include all relevant greenhouse gases,

• Cover a timeframe of 5 to 15 years from the submission date, and

• Be reported on to the public on an annual basis.

Since setting an SBT requires official certification by a third-party group of experts, SBTs are a great way for your company to reinforce its commitment to making the world a better place, and to ensure that you’re setting goals that actually have an impact.

Is your head spinning from information overload?

Want to become compliant with these or other sustainability standards but don’t know where to start? We’ve got you covered! At SustainLab, we know the ins and outs of these sustainability standards so you don’t have to. Our sustainability management platform makes it easy for your organization to create sustainability targets and keep track of your progress towards their achievement on a regular basis.

Want to learn more? Then get in contact with us today!

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