Sustainability reporting has both internal and external benefits. Which of the following is an example of an external benefit?

Sustainability reporting provides a framework for organizations to communicate their environmental, social, and governance (ESG) performance to various stakeholders, showcasing transparency and accountability. Stakeholder engagement is a key external benefit because it allows companies to connect with investors, customers, regulatory bodies, and the community at large. By providing detailed sustainability reports, organizations can facilitate dialogue, gather stakeholder feedback, and build trust, ultimately enhancing their reputation and fostering loyalty among external groups. This engagement is crucial for understanding stakeholder concerns and expectations, which can help shape the organization’s sustainability initiatives and strategies.

In contrast, the other options—effective management of sustainability risks and opportunities, sustainable vision, strategy and business plans, and a motivated workforce—represent internal benefits. These factors focus on how sustainability practices can enhance the internal operations, strategy formulation, and employee morale within the organization itself. While they contribute to overall sustainability performance, they are not primarily aimed at addressing or benefiting external stakeholders.