Strategy and Analysis

This section is intended to provide a high-level, strategic view of the organization’s relationship to sustainability in order to provide context for subsequent and more detailed reporting against other sections of the Guidelines. It may draw on information provided in other parts of the report, but this section is intended to produce insight on strategic topics rather than simply summarize the contents of the report. The strategy and analysis should consist of the statement outlined in 1.1 and a concise narrative outlined in 1.2.

1.1      Statement from the most senior decision-maker of the organization (e.g., CEO, chair, or equivalent senior position) about the relevance of sustainability to the organization and its strategy.

The statement should present the overall vision and strategy for the short-term, medium-term (e.g., 3-5 years), and long-term, particularly with regard to managing the key challenges associated with economic, environmental, and social performance. The statement should include:

·    Strategic priorities and key topics for the short/medium-term with regard to sustainability, including respect for internationally agreed standards and how they relate to long-term organizational strategy and success;

·    Broader trends (e.g., macroeconomic or political) affecting the organization and influencing sustainability priorities;

·    Key events, achievements, and failures during the reporting period;

·    Views on performance with respect to targets;

·    Outlook on the organization’s main challenges and targets for the next year and goals for the coming 3-5 years; and

·    Other items pertaining to the organization’s strategic approach.

1.2     Description of key impacts, risks, and opportunities.

The reporting organization should provide two concise narrative sections on key impacts, risks, and opportunities.

Section One should focus on the organization’s key impacts on sustainability and effects on stakeholders, including rights as defined by national laws and relevant internationally agreed standards. This should take into account the range of reasonable expectations and interests of the organization’s stakeholders. This section should include:

·    A description of the significant impacts the organization has on sustainability and associated challenges and opportunities. This  includes the effect on stakeholders’ rights as defined by national laws and the expectations in internationally-agreed standards and norms;

·    An explanation of the approach to prioritizing these challenges and opportunities;

·    Key conclusions about progress in addressing these topics and related performance in the reporting period. This includes an assessment of reasons for underperformance or over-performance; and

·    A description of the main processes in place to address performance and/or relevant changes.

Section Two should focus on the impact of sustainability trends, risks, and opportunities on the long-term prospects and financial performance of the organization. This should concentrate specifically on information relevant to financial stakeholders or that could become so in the future. Section Two should include the following:

·    A description of the most important risks and opportunities for the organization arising from sustainability trends;

·    Prioritization of key sustainability topics as risks and opportunities according to their relevance for long-term organizational strategy, competitive position, qualitative, and (if possible) quantitative financial value drivers;

·    Table(s) summarizing:

o   Targets, performance against targets, and lessons-learned for the current reporting period; and

o   Targets for the next reporting period and mid-term objectives and goals (i.e., 3-5 years) related to key risks and opportunities.                 

Concise description of governance mechanisms in place to specifically manage these risks and opportunities, and identification of other related risks and opportunities.