Target-Based Sustainability: A New Era in Corporate Reporting
Discover a new target-based framework for corporate sustainability reporting. Learn how it integrates financial and non-financial metrics, offers customizable categories, and prioritizes materiality for more meaningful ESG assessments.
January 10, 2025
This video is part of an INSEAD lecture by Dr. Hermann J. Stern for master students of the INSEAD sustainability program. You can find the full lecture here: Measuring What Matters: Sustainability Deep Dive for INSEAD Master Students.
The New Framework: Target-Based Measurement
The innovative approach presented in this video uses a horizontal target line as a benchmark, allowing companies to measure performance across various metrics. This system's beauty lies in integrating financial and non-financial metrics into one performance statement.
Key Features of the New Approach
Materiality in Focus
This approach aligns well with ESG reporting principles, particularly regarding materiality assessment. Companies can focus on issues most relevant to their operations and stakeholders, whether supply chain ethics, workplace safety, or any other sustainability category.
Advantages Over Traditional Methods
Looking to the Future
As sustainability reporting continues to evolve, this target-based approach offers a promising alternative to traditional methods. It provides a more nuanced and meaningful way to measure and communicate corporate sustainability performance.
