Simon Seebaluck, founder of Skyfall Consulting, discusses the importance of Global Reporting Initiative (GRI) standards and Circular Economy principles in Environmental, Social, and Governance (ESG) frameworks. We also discuss the significance of GRI disclosures related to climate change and how they align with global sustainability and financial reporting standards.

Simon, with your extensive background, how did you venture into Sustainability reporting?

Before I answer this, I wanted to ask: Have you ever wondered if missed opportunities – contracts not won, projects passed by, or loans unsecured – stemmed from the absence of a standard sustainability report? If this hasn’t been a concern yet, take note: the world has already pivoted towards valuing sustainability. It’s time to align or risk being left behind.

Sustainability has become indispensable to decision-makers worldwide in the current global business landscape. While sustainability reports have been known to yield better financial outcomes, they also demand a shift from traditional marketing strategies towards prioritising customers’ evolving needs. An organisation’s actions can have positive or negative consequences for the economy, environment, and society, leading to reputational and financial implications. In today’s context, it is practically impossible for any organisation to remain isolated from sustainability principles. Stakeholders tend to disapprove of organisations that do not contribute to sustainability endeavours, viewing them as part of the problem and disregarding them. Embracing sustainability can help organisations stay viable without resorting to price wars.

Our mission now is to assist companies in Mauritius in complying with GRI reporting and sustainability practices. We need to have a holistic view of businesses and how to connect the dots between Marketing, Finance, HR, and Operations so that the organisation can seize the “Wholeness” approach, which is an essential skill to master the complex challenge of embedding sustainability across the entire business spectrum. The wholeness approach cannot live in silos and certainly not only by filling forms and ticking boxes.

Therefore, it’s not only about seeing the big picture but also about comprehending the interconnectedness within its system, for example, how the Marketing department is linked to Sustainability. Sadly, we all know what happens when accountants talk to customers. A CFO can perhaps grasp the ESG and IFRS concepts but cannot see value in adding social and environmental values to an organization as they still linger in the traditional accounting concept. Or take a freshly produced cuvée of BSc of Science employees who can measure carbon emissions accurately but cannot link sustainability with marketing and sales to improve revenue. Funny enough, I spoke to the CEO of a significant organisation, and he told me that his HR department has all the Sustainability under wraps. We all know that HR is a department that ticks boxes, and, no offence, I really mean it. I had the chance to interact with some communication and compliance officers who have assumed the responsibility of sustainability managers. However, it will be challenging to integrate sustainability at the core without a proper understanding of the circular economy and ESG.

Before one embarks on this complex sustainability journey, there are all these very powerful, complex anthropology, ethical, and philosophical questions; organisations must start their sustainability journey and not wait for the Government to act, as it can only enhance global frameworks and abide by international law. Let’s not play the blaming game and hide behind the authorities.

Why is sustainability reporting crucial for businesses today?

Unfortunately, industries are built on unsustainable consumption (take-make-waste) that contributes directly to the planetary climate change crisis. Still, we can become part of the solution from any industry that significantly impacts climate change, biodiversity loss, waste, and pollution. Sustainability reporting enables companies from any location, small to large, to measure, disclose, and communicate environmental and social governance (ESG) performance comparably and credibly, thereby increasing transparency on their contribution to sustainable development. Sustainability reporting has gained significant importance recently as stakeholders increasingly demand transparency, commitment, and accountability from companies regarding their environmental and social impacts.

Companies risk disrupting supply and demand as economies respond to climate change. Climate change is responsible for floods in Bangladesh, wild bushfires in Australia, drought in Africa, shrinking glaciers of the Himalayas and rising sea levels in the Pacific Islands, to mention only a few examples. This is undoubtedly causing shifts in consumer behaviours, market uncertainty, and increased raw material costs. As consumers become more environmentally conscious, their purchasing habits are changing. Companies dismissing climate change may face decreased product demand and increased marketing expenditure, ultimately leading to financial instability.

Why GRI?

The Global Reporting Initiative (GRI) standards offer organizations a modular system of interconnected standards to publicly report the impacts of their activities in a structured, transparent manner to their relevant stakeholders. The disclosed information can be used by the organization to evaluate its policies and strategies or guide decision-making, such as setting goals and identifying future obstacles. This process acts as a compass, guiding us to recognise and improve our impact on the planet and society.

Picture steering the Titanic but equipped with the foresight of radar technology—this metaphor stresses how pivotal sustainability reports are. They serve as our radar, allowing us to foresee and navigate around ‘icebergs’ – potential environmental and social challenges – long before they threaten our voyage. Unlike financial statements that reflect past performances, sustainability reports empower us to proactively shape our future journey, ensuring we not only survive but thrive in today’s world. However, despite the clear benefits, the route to effective sustainability reporting is fraught with challenges.

What are the critical elements of Sustainability Reporting in a nutshell?

Sustainable business practices are based on environmental performance, social responsibility, and governance. Environmental performance focuses on energy consumption, waste management, and pollution prevention. Social responsibility includes labour practices, human rights, and community engagement. Lastly, governance emphasizes corporate governance, transparency, and ethical conduct. These pillars demonstrate how companies can contribute to a healthier planet and a more equitable society through responsible practices. Our approach to sustainability is rooted in the belief that ESG is not just a corporate responsibility but a strategic opportunity. Our approach goes beyond compliance, helping businesses uncover operational efficiencies, innovation, and market differentiation opportunities. So, as you know, environmental responsibility and business success are not mutually exclusive.

What are the benefits of companies engaging in sustainability reporting?

As we stand at the crossroads of environmental sustainability and economic growth, the choice is clear: embrace sustainability as a moral imperative and a strategic opportunity. Incorporating sustainability reporting into our strategic framework is not just about enhancing corporate transparency; it’s a critical step towards fostering trust, elevating our core structure, securing contracts or investments, and steering for a sustainable future. Sustainability reporting also helps companies build trust, enhance reputation, attract investors, retain talent, manage risks, and align with global sustainability frameworks such as GRI and the United Nations SDGs.

Are there any regulations for sustainability reporting?

Despite the lack of legal requirements for sustainability reporting, businesses across the globe are increasingly interested in partnering with companies that prioritise sustainability and disclose their sustainability performance through reports. For companies without a sustainability report, the decision is easy. The reporting is crucial for connecting with stakeholders on a deeper level. It’s about crafting a compelling narrative communicating a company’s sustainability journey, challenges, achievements, and future aspirations. Research shows that 73% of the top global companies have already published a Sustainability report, leading to 33% higher returns than their competitors who haven’t. This reporting enables businesses to measure areas that need improvement and track progress towards sustainability goals, which is essential for long-term success and resilience.

What challenges do companies face when implementing GRI reporting, and how does Skyfall Consulting help them overcome these?

Our approach demystifies sustainability reporting, especially with all the new confusing terminologies. We empower companies to embrace it as a core aspect of their business strategy. Skyfall Consulting can guide companies through the intricate process of GRI reporting, ensuring their operations align with global sustainability goals and the SDGs. We utilise the GRI standards to help companies measure, disclose, and communicate their ESG performance. Companies often grapple with integrating sustainability into their core business strategies. They may lack the necessary expertise to navigate the complexities of GRI reporting, such as a lack of policy and poor data management.

What are the enabling conditions for a Journey into Sustainability?

Leadership, collaboration, and a shared vision propel the journey into sustainability, further enabled by integrating Technology and a clear Roadmap. Systems Thinking and Education provide the framework and knowledge necessary for this transition, while Government Policies establish the supportive infrastructure, ensuring a seamless and impactful progression towards sustainable practices.

Have you ever contributed to any practical sustainability initiatives?

So far, I have successfully managed to save 1.3 million plastic bottles and approximately 75,000 cubic meters of water through practical business strategies. Moreover, in my academic capacity, I voluntarily deliver lectures on sustainability-related aspects at various universities in Perth.

What does the future hold for sustainability reporting in Mauritius?

Companies must understand that in less than three years, global stakeholders will stop trading with non-compliant sustainability reporting organisations. However, the Retail industry will likely experience a faster implementation of this. With increasing global emphasis on ESG, future trends will likely include stricter regulatory requirements and a greater demand for transparency. Organizations lacking sustainability reporting may face several challenges. They could miss out on attracting sustainability-conscious investors and customers, potentially harming their market competitiveness. Without such reporting, they might overlook operational inefficiencies or areas for improvement that could save costs or enhance performance.

Companies must contribute to climate change initiatives, provide efforts related to human rights, and meet the expectations of all stakeholders and not only shareholders. Customers need relevant, comparable, and consistent information about a company’s management of climate-related risks and opportunities to assess their exposure and allocate long-term orders effectively. Sustainable practices benefit both the environment and the organisation.

Remember the Titanic metaphor!