Presenting the elements in an engaging, transparent and convincing way is paramount to support the impact of sustainable development and CSR activities and content. Communications approach also ensures that the information is well chosen and constructed, and reflects the unique personality and position of the organization and its CSR agenda.
The materiality matrix: identify the most relevant issues
According to the World Business Council for Sustainable Development (WBCSD), an association of 190 international companies united by a common commitment to sustainable development, 89% of its signatory members use a materiality matrix to present their activity reports. Today, the use of a materiality matrix seems essential to identify the most relevant issues for a company’s activities.
A few rules are necessary to set up a relevant matrix of materiality for the institution or company in question:
- The company must take into account its internal stakeholders and external stakeholders specific to its activity and its strategic axes;
- The company or institution must be clear in the representation and explanation of the process, and must be able to allow for the traceability of material issues in the topics targeted in the CSR strategy.
The use of a materiality matrix is relatively well established in large international companies, but not evidently seen in medium-sized companies and the public sector.
It seems that many organisations of the public sector are still on the sidelines of this exercise. A city setting the example is the City of Los Angeles.
In 2018, Los Angeles published its third report “pLAn – Transforming Los Angeles”, which explains the challenges and actions implemented by the city to make its activities understandable. Of the 61 objectives set for 2017, 55 were achieved in 2017, while the remaining 6 are still in progress. The metropolis is therefore committed to monitoring all the indicators put in place to monitor the objectives set within a proven action plan.
For companies of any size, the materiality matrix makes it possible to position its leadership, integrate its stakeholders, and measure the impacts of its activities, thus communicating its CSR policy.
Sustainable Development Goals: A global framework for contribution
The UN Agenda 2030 and its 17 Sustainable Development Goals (SDG) are programs which engage internationally committed organisations. These international targets also represent a shared opportunity and responsibility for companies to address CSR. Thanks to the UN Agenda 2030, which sets the SDGs, companies also have a universal and global framework within which to ensure that their activities contribute to sustainable development. Sustainable Development Goals can be used in different ways by companies to create and communicate value. SDGs can:
- Enable a self-diagnosis or self-assessment of CSR performance, e.g. which are the SDGs to which I contribute the most through my activity?
- Serve as a framework for the development of the CSR strategy
Using SDGs in CSR reporting is a high value-added initiative with high communication value. Indeed, it creates a dialogue with other stakeholders as Agenda 2030 is a common language. The SDGs also make it possible to compare its performance with that of its competitors on an international scale.
To integrate the SDGs into CSR reporting, it is therefore necessary to choose the objectives on which the company wishes to target and above all to choose relevant indicators to monitor the implementation of the objectives.
The real estate sector can be a powerful driver for large-scale deployment of the SDGs. For companies in the sector, successful implementation of the SDGs will strengthen the business environment by reducing instability (educational problems, climate risks, wars, etc.), as well as the negative impact of activities on people and on the planet.
The most significant objectives linked to the real estate and construction sector is related to the life cycle of buildings during its development, usage and recovery phases (as seen in the diagram).
(Source: RICS – UNGC)
Climate Disclosure: TCFD the new expectations of stakeholders
The TCFD (or Task Force on Climate-related Disclosures) was created by the G20 at COP21 in 2015 to develop recommendations for corporate financial transparency in addressing climate risk.
The TCFD, chaired by Michael Bloomberg, specifies in 4 pillars the climate reporting elements expected for companies: governance, strategy, risk management and the indicators, and the metrics used. This new form of reporting represents a new framework for companies to clarify and communicate their financial exposure to the climate risks to which they are exposed.
In the real estate sector, the consideration of climate reporting is not yet fully developed, but some insurers are starting to integrate these elements into their reporting. This is the case for Axa, which provides two climate scenarios and links potential climate impacts to its financial data via an estimate of the exposure value. The insurer provides its methodologies and historical trend analyses for its climate data, providing context to explain the influence of these trends and the potential influence of countries’ future climate policies.
TCFD recommendations are now being disseminated and the publication of climate financial information is improving. However, there is still a long way to go before investors and analysts are able to make decisions based on credible and useful climate information. In order to facilitate and accelerate companies towards low-carbon and resilient strategies, these recommendations should be adopted at the international level
As presented, there are several communication tools in terms of CSR and sustainable development communication, at the same time they take more criteria into account. Companies and public actors must take control of these existing and new communication tools to ensure the widest and most relevant dissemination of the policies put in place.
If you would like more information on these subjects or to deploy this type of methodology throughout your activities, do not hesitate to contact us.
Article researched and written by Pierre Rostan and Constance Flachaire for Urban Chronicles™
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