Natalia Scherbakoff, Global Director of Technology & Innovation, Engineered Materials
Over the past decade, the increase in societal awareness around environmental, social, and governance efforts have increased the need for transparent sustainability and financial reporting.
Large companies, like Trinseo, are required to follow governmental regulations for what disclosures need to be made in sustainability reporting. In the U.S., the Securities and Exchange Commission (SEC) requires companies to include certain climate-related disclosures within their reports. Alternatively, the EU requires companies to disclose information on their environmental impact, treatment of employees, respect for human rights, and more. However, as the demand for consistent, transparent reporting grows, these regional requirements are not always sufficient.
In order to create standardized sustainability reporting and address the changing landscape, international and industry guidelines and standards have been developed that require a scientific approach to disclosures. This standardization enables companies and organizations around the world to create comparable, comprehensive reports for improved transparency of sustainability initiatives.
The most utilized standards come from the Global Reporting Initiative (GRI), an independent, international organization that addresses sustainability impact through standards that report on the economy, environment and people in a credible, scientific way.
Trinseo integrated GRI Standards several years ago into our sustainability reporting to align our messaging with the language used by the global community and be transparent about the work we are doing to reduce our impact on the planet. In order to align with GRI Standards, we take a scientific approach to reporting on data, such as our greenhouse gas emissions, chemical impact on the environment, and electrical usage from renewable and fossil-based sources. Last year, we also implemented the Sustainability Accounting Standards Board (SASB) disclosures into our reporting for communicating financial sustainability information to investors.
This July, we will release the Company’s 12th Sustainability and Corporate Social Responsibility Report, which will begin to incorporate the Task Force on Climate-related Financial Disclosures (TCFD), which addresses climate-related financial disclosure recommendations designed to help companies provide better information to support informed capital allocation. By aligning our sustainability reporting to global standards, we are being transparent about the scientific approach we are using to achieve our 2030 Sustainability Goals.
The Future of Reporting
Starting in 2023, GRI will implement Universal Standards that align reporting with international guiding principles and policies on human rights and due diligence, such as the UN Guiding Principles on Business and Human Rights and the U.K. Modern Slavery Act.
In addition to creating more transparency for reporting, the new standards will eliminate the “Core” and “Comprehensive” designations for GRI. Instead, standards have been revised, added, or eliminated to create an extensive disclosure list that is required for all participating companies and organizations. These comprehensive changes enable more uniformity in global sustainability reporting standards. As sustainability reporting continues to advance, reporting organizations will need to work together to align standards with appropriate governmental policies and best practices.
Reporting standards are tools to provide reliable, objective data through systematic processes. Each and every participant is applying the same methodology, which provides a level playing field for transparent and trustworthy information. Sustainability will not manifest through the effort of a small number of organizations, but requires a global, concerted effort. By utilizing the same international standards in sustainability reporting, we are scientifically proving our outcomes for a better future.
Learn more about reporting standards in my recent Forbes article.