How to Simplify Your Sustainability Report: 3 Steps to Close the Transparency Gap

Sustainability reports are meant to provide transparency about a company’s impact to investors, regulators, and the public. But as new regulations and supply chain demands increase, these reports have grown longer and more technical, often leaving the average reader behind.

Companies face a growing challenge: they must satisfy regulators and investors with detailed disclosures while creating a clear, engaging report for a wider audience.

Sometimes hundreds of pages long, these documents cover everything from carbon footprints to diversity metrics and supply chain risks.

While maximum transparency is the goal, overly technical language can make a report unreadable and impractical. A report filled with dense financial models and detailed metrics often obscures the key takeaways.

Navigating Regulatory Complexity

New regulations, such as California’s SB 253 and SB 261, contribute to this complexity. The Climate Corporate Data Accountability Act (SB 253) requires large companies operating in California to disclose their full greenhouse gas emissions across Scopes 1, 2, and 3. The Climate-Related Financial Risk Act (SB 261) mandates the disclosure of climate-related financial risks and a description of how those risks are managed.

Like similar regulations worldwide, these laws aim to give investors and the public better insight into a company’s climate impacts. To meet these demands, you must avoid creating redundant work for your team and unnecessary confusion for your readers.

Three Proven Steps to Simplify Your Reporting

To avoid unnecessary complexity, consider these three proven steps to transform your reporting from a compliance exercise into a powerful communication tool.

1. Focus on What Matters: The Power of Materiality

A common mistake is trying to include everything, which leads to information overload. The solution lies in a robust materiality assessment, a core methodology that helps you focus on what truly matters to your business and your stakeholders.

A materiality assessment helps you identify and prioritize the issues most relevant to your business. This proactive approach allows your team to:

• Avoid immaterial disclosures: Focusing on what is truly significant allows you to produce a shorter, more focused, and more credible report.

• Anticipate and manage risks: Our methodology helps you predict which emerging issues are likely to become financially material, giving you a competitive advantage.

2. Communicate Clearly: Ditch the Jargon

Sustainability reporting is full of jargon that can confuse even the most seasoned professionals. This technical language is a major barrier to understanding for many stakeholders.

Avoid technical jargon and communicate insights in clear, simple language. This is not about “dumbing down” your report; it is about translating complex data into a compelling, understandable narrative that can help bolster trust among investors and employees. Authentic storytelling, backed by your data, is your key to credibility.

3. Visualize Your Impact: Make Data Digestible

Dense tables and walls of text make it nearly impossible for readers to quickly grasp key trends and performance metrics. Use infographics, charts, and other data visualizations to make complex data more digestible.

Visuals can transform your report from a dry, technical document into an engaging, accessible story. This is particularly crucial for complex data, such as Scope 3 emissions, which represent the majority of a company’s carbon footprint but remain a significant reporting challenge.

Companies should also consider publishing a comprehensive report for investors and a separate, summarized impact report for consumers and employees. This tiered approach ensures each audience receives the information most relevant to them in a format they can easily understand.

Struggling to Navigate Complex Reporting Regulations or Produce a Clear, Impactful Sustainability Report?

At OBATA, we understand the complexities of modern sustainability reporting. Our long-standing experience in corporate sustainability reporting and communications helps companies navigate these new requirements while producing a clear and compelling narrative.

We partner with clients to develop a strategy that satisfies a wide range of stakeholders, from regulators to the public, ensuring your report effectively communicates your commitment and progress.

If your team is struggling to create a report that satisfies both regulators and stakeholders, let’s discuss how OBATA’s sustainability reporting and consulting services can help you simplify the process.