Environmental Report, Social Report, Sustainability Report, Triple Bottom Line Reporting, Report on Intangible Assets
Preparation of an environmental report meets a fundamental need of sustainable management, i.e. the full and correct illustration of the business-environment relationship, which cannot be in any way limited to the mere consideration of the data reported in the usual income statement and balance sheet. Using this tool, businesses that measure their environmental impact for the purpose of reducing it can control costs while benefitting from new competitive prospects linked to improved efficiency and effectiveness, in both environmental and economic terms.
One of the most commonly used tools for social reporting is the Social Report. An independent document separate from the ordinary accounts, it covers a series of qualitative and quantitative indicators to document the company’s social performance. This type of document is complementary to the financial statements and often, for the purpose of accuracy, clarifies the meaning of certain items in the financial statements.
The natural evolution of the Social Report and the Environmental Report is the Sustainability Report, which aims at reporting the impacts on both the environmental and social arenas, also informing the reader of economic aspects, without going into specific details.
The Sustainability Report should be a comprehensive, easy-to-read document, which allows stakeholders to immediately find the information they need to assess the company as a whole. Integrating the information to be disclosed into just two documents (financial statements and sustainability report) provides not only organisational benefits for the company, but also a significant advantage for inexpert readers who could be confused by the presence of three different documents published by the organisation.
Triple Bottom Line Reporting
ITriple Bottom Line Reporting is the latest evolution in company sustainability management. This consists in a document which goes beyond sustainability and expands the financial reporting addressed to shareholders and the financial community, following the approach of the “Triple Bottom Line”: economic sustainability (profit), social sustainability (people) and environmental sustainability (planet). This essentially involves combining the documents illustrated above with the traditional financial statements.
The data in the financial statements, the sustainability report and the environmental report have a high level of correlation with each other, and if disclosed without illustrating their links, may give rise to partial disclosure, while Triple Bottom Line Reporting provides comprehensive, easy to understand disclosure. Using the specific “modular” approach of this tool, the data may also be disclosed using different types of language, depending on the specific audience.
Report on Intangible Assets
Reporting on intangible assets may be accomplished by drawing up a Report on Intangible Assets, which, naturally, documents data which is also reported through Triple Bottom Line Reporting, the sustainability report and the social report. However, while the purpose of the Social Report is to assess the social impact of business operations, the Report on Intangible Assets attempts to measure the contribution of abstract elements of the company to the creation of economic value.
In summary, this type of document can be defined as a tool which reports on the assets that provide value to the company over the medium/long-term, and also uses qualitative as well as quantitative indicators.