Sustainability Reporting is an important tool used in the implementation process of CSR, communication and transparency
Sustainability Reporting (SR) plays an active role in assisting an organisation in setting its goal, measuring progress, sustainability management, efficiency and bringing an overall improvement in performance.
SR works as a communication instrument between the bank and its stakeholders. It helps in sending unambiguous ideas to all stakeholders of its overall impact and creates opportunities for enhancing its efforts towards building a prosperous sustainable future.
The SR of an organisation entails the values, governance model, and the correlation between its operational strategies and a persistent commitment to a sustainable world economy. Therefore, the report elucidates the impacts of the organisation's activities on the economy, environment, and society.In most cases, SR can be mistakenas interchangeable with corporate social responsibility (CSR) reporting, non-financial reporting or a triple bottom line (three Ps: People, Planet, and Profit) reporting, among others. However, it should be borne in mind that SR is an important tool used in the implementation process of CSR, communication and transparency.
As the regulatory authority for all commercial banks in Bangladesh, the central bank has stated that SR should be executed in compliance with the Global Reporting Initiative (GRI) guidelines. The GRI is a globally accepted format which is regarded as the "standard" in this regard.
As a concrete tool, Sustainability Reporting reinforces the transparency of commercial banks in front of the private sector and helps in building an empowered environment and creating a stronger base to accomplish the Sustainable Development Goals (SDGs).
On the other hand, GRI provides a common language for organisations and stakeholders, which is designed to help the institution to communicate its impacts on the economy, environment, and society and how they can contribute towards achieving the goal of sustainable development.
As a result, to identify and assess the impacts of SR on the country's banking industry, attention must be paid towards formulating a plan and maintaining a culture of SR reporting as the economy advances towards a more "sustainable tomorrow".
In February 2011, Bangladesh Bank issued a policy titled "Guidelines for Green Banking" for all scheduled banks. The guidelines require that commercial banks prepare their Sustainability reports as Independent Annual Sustainability Report (IASR) by following the GRI standards.
For this, commercial banks and other NBFIs have to make their Annual Sustainability Reports (ASR) adhering to the GRI standards or any other internationally accepted format. For the advancement of the economy of Bangladesh, the central bank has formed the Sustainable Finance Department to monitor how banks and other NBFIs are working in this regard.
Sustainability Reporting is one of the latest concepts of present-day banking policies, where the environment remains a focal point of every investment. In line with the concept of traditional marketing shifting towards digital campaigns, for-profit companies keep shifting their decisions from exclusive to inclusive, individual to social, vertical to horizontal.
While allowing themselves to benefit from society and nature with their existing resources, banks and other financial institutions' responsibilities have multiplied. When it comes to the needs of society for long-term protection, the banking sector is an entrusted entity, which puts them in a more responsible position compared to others.
For successfully implementing this practice, the only way is to make the banking sector accountable in disclosing the sustainable reports, including stakeholders' engagement, focusing on the sector's sustainable development.
Awareness of customers and investors is also a prerequisite to the standard reporting practice. Key stakeholders such as banks need to support this practice on every level; making it important for the top/senior management to focus on the matter. This practice will boost the demand for special programs for key officials, which needs to be arranged by the central bank.
Financial entities need to be made aware of the magnitude of the concept of sustainability and therefore be encouraged to cooperate with banks that adopt sustainable development measures.
Reporting practices regarding green banking and sustainability should be combined in policy analysis to design standard guidelines- so that no factors between these standards can be distinguished, and the ultimate development goals of a country can be achieved sustainably.
Importantly, Sustainability Reports (SR) consists of very relevant and engrossing information regarding sustainability for stakeholders, which will not have the desired impact unless it is assured that the report is received or is received sporadically.
Finally, as a part of a country's corporate society, banks should always work towards building a more informed economy and should always be mindful of what Crazy Horse- the famous American war leader once said, "Treat the earth well: it was not given to you by your parents, it was loaned to you by your children."
Md. Touhidul Alam Khan is the Deputy Managing Director of Prime Bank Limited. He is the first Certified Sustainability Reporting Assurer (CSRA) in Bangladesh and the Fellow Member of Institute of Cost & Management Accountants of Bangladesh (ICMAB).