Sustainability reporting within the central government

Sustainability is a multifaceted concept, and its role in central government may be more difficult to understand than in the activities of private companies, for example. There are many definitions of sustainability, but most of them include responsibility for the economic, social and environmental impacts of an organisation’s activities.

As a term, sustainability is challenging if it is understood to be the opposite of unsustainability or irresponsibility. But the issue is not a black and white one; the lack of irresponsibility in an organisation does not mean that their activities are sustainable and responsible. The image below may help you understand the concept. The image describes different organisational operating models based on ecological and social carrying capacity so that the Y axis indicates carrying capacity and the x axis indicates activities.

The first Earth in the image describes an unsustainable and irresponsible operating model where carrying capacity is reduced as a result of human activities. The following two Earths describe operating models that can be seen as two levels of sustainability. The sustainable operating model involves maintaining the harmful effects of activities at a level that can be tolerated from the perspective of carrying capacity. In this operating model, the element of sustainability can be understood to be halting the growth of negative effects. The Earth on the right describes a development-oriented operating model where activities can be used to renew carrying capacity and, as a result, repair what has been broken by previous activities.

Central government operations may automatically appear to be sustainable, in which case preparing a separate sustainability report seems like unnecessary work. After all, the state’s tasks are based on the implementation of tasks critical to society, aiming at the good of society as efficiently and economically as possible. In addition, the state is bound by the principles of good governance. However, the fact that activities aim to achieve a certain good societal solution does not automatically mean that they are sustainable and promote sustainable development. As stated in NAOF’s performance audit report on the promotion of sustainable development published in 2019, interviewees in ministries were able to identify the link between sustainable development and their own sector and areas of responsibility, especially the permanent tasks of ministries. However, it does not mean that the SDGs are guiding the ministries to operate in a different way to how they otherwise would.

The central government plays a significant role in Finnish society. Key stakeholders’ views of the direction in which Finnish society should be developed inform the central government’s work carried out under the direction of the Government. However, the central government’s task is to oversee the work carried out to achieve common goals and to ensure that the impacts that the activities have on society and the environment are headed in the right direction. Statutory tasks can be carried out in different ways, and when setting the course for the activities, choices are also made about the types of impacts the activities will have on society and the environment.

One of the objectives of drawing up a sustainability report based on the UN’s Sustainable Development Goals is to identify the potential of the reporting organisation to contribute to addressing the challenges of sustainable development. Once the role has been identified, high-quality reporting not only makes the work transparent to governmental stakeholders, but also encourages the organisation to continuously develop its sustainability.

The requirement of corporate and organisational sustainability has increasingly been met by producing reports describing operational sustainability. In this context, the term sustainability is fairly subjective – there is no universal, precise definition for it. At worst, each report defines sustainability from the perspective of the reporting organisation, and it is not possible to compare the reports with each other.

When discussing the sustainability of central government organisations, it is beneficial to have some degree of consistency, as it makes it possible to combine reports from different organisations and, on the flip side, to make comparisons between different actors’ reports. To make this happen, we have to use a common framework.

A number of sustainability reporting models have been developed, and new ones are constantly emerging. The State Treasury has decided to use the UN’s Sustainable Development Goals (SDG) and 2030 Agenda as a reporting framework. This means that sustainability reporting that follows the State Treasury’s guidelines focuses on sustainability as determined by the 2030 Agenda.

In Finnish, the State Treasury’s sustainability reporting is referred to as ‘responsibility reporting’. ‘Sustainability reporting’ may be a more apt way to describe the perspective of the reporting framework, but ‘responsibility’ can be seen as an umbrella term that includes sustainable development. Either way, the objective is to have reporting that encompasses more than promoting the UN’s Sustainable Development Goals, such as describing your ecological footprint with Green Office reporting or generating data on social responsibility. The plan is to collect this footprint data in a central government data bank as automatically as possible, especially the data collected by group actors.

The goals of UN’s 2030 Agenda for Sustainable Development is to achieve sustainable development that takes account of the environment, the economy and humans on an equal footing. The 2030 Agenda has guided the work done for sustainable development in Finland and other countries since 2016.

Finland is committed to achieving the goals of the 2030 Agenda by year 2030. The implementation of the programme is still ongoing, and the goals have not been met yet. There is now less than a decade to achieve the common goals, and we need to considerably accelerate and increase measures in order to meet them. The Sustainable Development Goals broadly cover global sustainability challenges, and each central government unit has an opportunity to contribute to these goals.

The countries committed to the programme have an obligation to monitor and evaluate their development in order to meet the goals, which requires a high-quality, achievable and current database of materials. Local and national analyses lay the foundation for monitoring and evaluating the achievement of the goals at a global level. The Finnish Government reports annually to the UN on the progress of its work.

By drawing up a high-quality sustainability report for the sustainable development goals that are central to the core activities of each agency and institution, these actors can contribute to high-quality monitoring at the national level.

The State Treasury recommends having the sustainability reports of agencies and institutions focus on the impact of their activities regarding 3 to 5 of the UN’s Sustainable Development Goals. The purpose of the reporting is not only to inform stakeholders about the central government’s sustainability work, but also to raise awareness of the agencies’ and institutions’ possibilities of promoting the goals of sustainable development.

For now at least, the National Audit Office of Finland (NAOF) will not be reviewing the sustainability reports of ministries, agencies and institutions.

Even in the private sector, legislation does not require verifying corporate responsibility reports. However, requirements for the quality and reliability of corporate responsibility information have grown alongside the reporting obligations for non-financial information. Especially large companies have met this requirement by submitting their corporate responsibility reports to external auditors for verification.

Reliability is a key feature of sustainability reporting, no matter the organisation. While auditing reports can increase stakeholder confidence in the reported information, reliable information production also involves other factors. The reliability of sustainability reporting can be assessed in the light of the following qualitative characteristics: relevance, extent, accuracy and comparability.

Even though the sustainability reports of ministries, agencies and institutions are not currently being separately checked or otherwise verified, we should pay special attention to producing sustainability information that is as reliable as possible.

In public administration, sustainability reporting was initiated in the 2010s. You can search the reports listed below for examples and inspiration on how sustainability reporting can be implemented.

• The sustainability report for 2020 of the National Land Survey of Finland
• Collection of earlier sustainability reports of the National Land Survey of Finland

According to a report (record no 284/54/2018) by the National Audit Office of Finland (NAOF), sustainable development is present in the budget proposal but has not guided financial planning. The conclusions of the final report (11 May 2019) of the State Treasury’s Making Sustainability Visible pilot project support the NAOF’s recommendations: if the objective is to make sustainable development and questions regarding sustainability guide policy content more clearly, the ministries should more systematically analyse whether their activities are in line with sustainable development.

Another significant finding with regard to the central government’s sustainability reporting project is that the Sustainable Development Goals are mainly linked to the ministries’ permanent tasks. However, this does not mean that the Sustainable Development Goals are guiding the ministries to operate in a different way to how they otherwise would. The sustainability reporting guidelines prepared by the State Treasury seek to respond to this by providing a clear definition of what sustainability means within the central government.

The most effective thing for society is what agencies do through their statutory duties and the core activities of their agency. When everyone does what they do best, it results in the greatest possible benefit at the level of society.

In sustainability reporting, every agency should examine, through the performance of their own statutory duties, what societal and global impacts are caused by their activities. The perspective of a sustainability report on the impacts of the activities of a ministry or agency is thus different from the perspective of an annual report, which also reports on the results and societal impacts of the activities. In other words, the target group of a sustainability report is not automatically the same as that of an annual report.

At the initiative of Director General of the State Treasury Timo Laitinen, the Government Finance Administration, Information and Working Life Management division started the Making Sustainability Visible pilot project in January 2020. The pilot’s participants included the National Land Survey of Finland, the Office of the President of the Republic of Finland, the State Treasury and the Finnish Tax Administration. The sustainability reports produced by pilot agencies have allowed the State Treasury to assess the amount and quality of guidelines required. In order to compare sustainability efforts across government agencies and administrative branches, we need to implement a sufficiently harmonised reporting framework that will account for the varying areas of specialisation and operating environments of the relevant organisations.

The assessment of the central government’s sustainability reporting that was carried out as part of the Making Sustainability Visible pilot project shows that the potential of sustainability is not being fully realised. For example, this is evident in that sustainability is at the core of few agency strategies.

Although many agencies report on sustainability, either as a separate publication or as part of their annual report, the sustainability linked to the agency’s core activities should be studied in a more analytical way. It would help citizens, companies, third sector operators and investors better monitor risks and impacts linked to other than purely economic operations.

The sustainability report does not in itself solve sustainable development challenges or global issues. However, it can be a valuable tool that encourages organisations to act and examine how the shift towards a more sustainable society can be promoted in different areas of society. Expanding sustainability reporting at state level also allows Finland to strengthen its pioneering position in sustainability and encourage the European Commission to report on how the EU’s budget or policy contribute to achieving the Sustainable Development Goals.

The core idea of sustainable development is to secure good living conditions for current and future generations. The aim is to find an appropriate balance between human well-being, the economy and the environment. The Commission on Sustainable Development handles the incorporation of national sustainable development goals in the national policy.

Sustainable development has had an important role in the strategies and programmes of the Finnish Government since 1990. The current government programme aims to mould Finland into a society that follows the principles of social, financial and ecological sustainable development by 2030.

Well-being through a sustainable economy

The United Nations (UN) has defined 17 Sustainable Development Goals (SDG) that must be achieved by 2030. The efforts to reach the goals is guided by the UN’s Agenda 2030 programme. It emphasises that the methods of implementation are equally important as the goals themselves.

According to the Agenda 2030 programme, the resolution of global problems requires multifaceted collaboration and partnership between countries, operators and citizens. Active exchanging knowledge and experiences, sharing best practices and ensuring systematic policies are some of the means that can be used to tackle the challenges involved.

The aim of the sustainable development goals is to make the world a better place for us all. This can be achieved by merging the social, environmental and economic perspectives more efficiently than at present.

The State Treasury will bring together communication professionals and experts interested in sustainability and sustainable development to share experiences and views and to make the state’s sustainability work more effective.

Do you want to write a blog about sustainability?

You can also sign up as a blog writer on the valtiolla.fi website (in Finnish), where sustainability has been highlighted as one of the central government’s development areas in working life. If you do not want to write yourself, you can also submit suggestions for new posts or point out a civil servant who would be interesting to interview.

More information, please contact vastuullisuusraportointi(at)valtiokonttori.fi.

The Resource Wise Agency (Resurssiviisas virasto) network brings together central government operators that are interested in sustainability and sustainable development. The forum serves as a place for sharing experiences and good practices, which can provide agencies with support for the promotion of sustainability and the themes of sustainable development.

What is the path to carbon neutrality in different sectors of government? What is resource wisdom and sustainable development from the perspective of a public organisation? How is the department’s carbon footprint calculated? The Resource Wise Agency network organises various workshops and events on current sustainable development themes.

The network also has its own workspace provided by the Senate. The State Treasury’s Kaiku Services maintains the workspace together with Senate Properties. The network was started on the initiative of the #resurssiviisasvirasto and everyone working in public administration organisations is welcome to join the network. If you want to join the network, you can register for Riikka Manninen at riikka.manninen(at)senaatti.fi or Liisa Virolainen at liisa.virolainen(at)valtiokonttori.fi.