Organisations stand out when they disclose value-creation activities – Business Daily
One of the many features of a sustainable business today is promoting shared prosperity through alignment in the tripartite goals of meeting the needs of business, society, and the planet.
It positions the organisation as not only profit-focused but socially responsible. Depending on the industry and sector an organisation belongs to, its business model should cover, at the very least, its entire value chain and the broad range of stakeholders involved while embracing long-term thinking and trade-offs among the different capitals utilised by the organisation.
Recently, we have also seen organisations embrace concepts such as circular economy, which avoids wastage. In addition to implementing these strategies, organisations should pay equal attention to the disclosures made available to stakeholders on these value-creation activities. Some value-creation activities organisations should consider disclosing to their stakeholders are as follows.
Fast-moving consumer goods (FMCG) and mining businesses with an extensive value chain and a broad range of stakeholders usually apply a multi-capital value creation process in their business model.
These include ensuring the raw materials used in production are procured and sourced responsibly; ensuring unfair or illegal labour practices such as child labour is not tolerated; holding suppliers to high standards; promoting fair wages paid to suppliers, employees, and governments through taxes; collaboration with suppliers in product research, development; and sustainable production to minimise adverse environmental impact.
In the mobility sector, organisations that have created value through their business model disclose information on efforts to reduce carbon emissions and pollution, improve safety and efficiency and support the local community while maintaining a fair return to their shareholders.
In the financial services sector, organisations provide information on their lending portfolio exposure to industries directly impacting emissions and their strategies to refocus their portfolios on renewables and sustainability-linked lending.
These include activities like green bonds that deliver environmental benefits and promote a more sustainable economy and other sector-wide sustainable finance initiatives. Providing information on value creation improves transparency and the reputation of an organisation.
Akinyemi Awodumila is an Associate Director at PwC Kenya. An author who writes and speaks widely on corporate reporting topics
