Organizations stand out when they disclose value-creating activities



Organizations stand out when they disclose value-creating activities

One of the many hallmarks of a sustainable business today is the promotion of shared prosperity through the alignment of the three-party goals of meeting the needs of business, society and the planet.

It positions the organization as not only profit driven, but socially responsible. Depending on the industry and sector to which an organization belongs, its business model should cover, at the very least, its entire value chain and the wide range of stakeholders involved, while adopting long-term thinking. and trade-offs between the different capitals used by the company. organization.

Recently, we have also seen organizations adopt concepts such as the circular economy, which avoids waste. In addition to implementing these strategies, organizations should pay equal attention to the information made available to stakeholders about these value-creating activities. Some value creation activities that organizations should consider disclosing to their stakeholders include the following.

Fast Moving Consumer Goods (FMCG) and mining companies with an extended value chain and a wide range of stakeholders typically apply a multi-capital value creation process in their business model.

These include ensuring that raw materials used in production are sourced and sourced responsibly; ensure that unfair or illegal labor practices such as child labor are not tolerated; hold suppliers to high standards; promote fair wages paid to suppliers, employees and governments through taxes; collaborating with suppliers in product research and development; and sustainable production to minimize negative impact on the environment.

In the mobility sector, organizations 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 community local community while maintaining a fair return for their shareholders.

In the financial services sector, organizations provide information on their loan portfolio exposure to industries that have a direct impact on emissions and on their strategies for refocusing their portfolios on renewable energy and sustainability-related lending.

These include activities such as green bonds that provide environmental benefits and promote a more sustainable economy and other industry-wide sustainable finance initiatives. Providing information about value creation improves an organization’s transparency and reputation.

Akinyemi Awodumila is an Associate Director at PwC Kenya. An author who writes and speaks widely on topics related to corporate reporting


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