Sustainability reporting fails to add value

Jan 15, 2015
<p>Report finds some companies wasting time and money on ineffective reporting&nbsp;</p>

Companies are wasting time and money by putting together ineffective sustainability reports, finds a study compiled by strategic think tank and consultancy SustainAbility.

The researchers canvassed opinions from almost 500 sustainability experts and thought leaders and analyzed more than 50 interviews with its own network of professional stakeholders to form the basis of the report.

Fundamentally, SustainAbility’s manager Margo Mosher writes in the document, responsible reporting practices have stalled. ‘We’ve seen things plateau and, while the reports are doing many good things, they could be doing so much more, adding much more value,’ she continues.

The report highlights corporate credibility and transparency as two key aspects of responsible disclosure currently being overlooked, though it also suggests companies reassess the way in which such reports are used: at heart, it recommends a focus on using reports to drive better decision making and thereby improve business performance.

It also reclassifies transparency as being made up of three key elements – an appreciation for materiality, externalities and integration – and suggests ways in which reporters can take each into account.

Reporters are reminded they need to ‘zero in on what’s important to [their] key stakeholders,’ says Mosher, and translate the most important issues, such as resource scarcity, into understandable language. ‘It’s the underlying driver of why we are all worried, and why sustainability is so important,’ she adds.

‘We recognize this is not an easy task,’ the report states. ‘It will take bold action and potentially significant change to the way some information is gathered and used, and the way some stakeholders ‒ both internally and externally ‒ are currently managed.’

Another recent study ‒ conducted by the Boston Consulting Group, MIT Sloan Management Review and the UN Global Compact – finds directors are increasingly ignoring the reality of sustainability issues, including climate change, resource scarcity, social injustice and biodiversity collapse.

Only a fifth of the 3,795 executives and managers surveyed by researchers believe their boards provide substantial oversight on such concerns. The survey also finds that 58 percent of boards are perceived not to be even ‘moderately engaged’ with their company’s sustainability agenda.

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