What is the primary aim of normalizing sustainability accounting metrics?

Normalizing sustainability accounting metrics primarily serves the purpose of facilitating comparison between companies. When metrics are normalized, they are adjusted to account for differences in scale, industry type, or other relevant factors, which allows stakeholders to make more accurate assessments of sustainability performance across organizations. This comparability is critical for investors, regulators, and the public, as it enables them to evaluate how different companies are performing in terms of sustainability objectives, practices, and impacts on the environment and society.

While enhancing corporate transparency, measuring employee engagement, and attracting investors can be outcomes of better sustainability reporting, the fundamental goal of normalization is to ensure that data from different sources can be fairly compared and analyzed. This helps drive accountability and showcases relative progress in sustainability initiatives among companies operating in the same sector or across various industries.