April 24, 2013 by Tess Riley
Being good at reporting is no guarantee you’re doing good. Far from it. However, dismissing sustainability reporting as greenwash without assessing its possible values potentially and overly-simplistically dismisses a tool that may well be able to help us drive positive change.
I was recently asked to assess the pros and cons of sustainability reporting for Green Futures, a magazine I love to write for precisely because the topics I’m asked to cover are complex, relevant and concern things I care deeply about. It also means I get to bash ideas around with people whose views I think are top notch, such as the New Economics Foundation’s Andrew Simms in this case.
Sustainability reporting is a hot topic right now as tales of corporate malpractice continue to dominate the news agenda on an all too regular basis. Here’s my take on the pros and cons of such reporting – you can also read it on Green Futures here.
Sustainability reporting: is it worth it?
Corporate behaviour is under intense scrutiny, not least in the context of sustainability. Diverse audiences, from board members to final consumers, are showing increasing interest in understanding a company’s environmental impact. Bloomberg, for example, now includes carbon data in its reporting.
But how valuable is sustainability reporting? It’s a crucial question, both to help us work out what sets the leaders apart, and if we’re to understand the role of reporting in driving change.
A recent report from corporate communications agency Radley Yeldar offers a useful starting point. The authors of ‘How Does It Stack Up?’ surveyed 35 companies from the FTSE Eurotop 100 to pinpoint trends in sustainability reporting. They found that the overall quality of reporting continues to improve, citing an increase in the number of companies disclosing their progress against short, medium and long-term targets. However, they also point out that important narratives are being obscured by increasingly standardised disclosures.
The past year has been marked by high-profile corporate malpractice, raising questions about the role and value of the sustainability report. Ben Richards, Radley Yeldar’s Head of Sustainability, maintains that one of the main motivations is communicating with clients and stakeholders – but acknowledges that “the act of disclosure has value, both positive and negative”.
Despite this, Richards is in no doubt about the overall business benefits of producing a report, particularly if it gives competitive advantage over less transparent peers. These disclosures must be accurate and honest, however, if they are to avoid merely becoming greenwash. “With a simple accusatory tweet wielding enough power to discredit the time, effort and cash put into producing a report, it’s vital to get this right”, warns the report.
This year, Anglo American came first of five companies selected by Radley Yeldar for its particularly impressive sustainability reports, ahead of Centrica, HSBC Holdings, Diageo and Siemens. But does a good report necessarily indicate good practice? Critics are sceptical, as New Economics Foundation fellow Andrew Simms makes clear:
“Sustainability reporting is only of real use if it is hard-wired to companies becoming part of the rapid transition to an economy which lives within our global environmental budget. There’s no guarantee that, just because you are good at reporting, you are doing any good.”
But could sustainability reporting help to drive change? David Aeron-Thomas, Sustainable Metrics Specialist at Forum for the Future, considers setting a standard to be a positive thing, but not in isolation:
“Ultimately, having to prepare a sustainability report helps organisations work out their priorities. Change can develop from there. In the past, it was only big extractive companies which were winning reporting awards, in part because they had to recover their reputation. Now, new players are entering the field, and some good things are emerging to help build up the required expertise – such as the Global Reporting Initiative. There’s more to it than wrapping a report around a company and hoping that will be enough.”
This is where ‘How Does It Stack Up?’ comes to the fore. Radley Yeldar hopes that, by establishing a benchmark of best practice, companies can pool their reporting expertise, learning from one another in the process.