Corporate sustainability reports are simultaneously getting better and worse, according to our research at DNV Two Tomorrows, a sustainability consulting firm.
Our study -- 2012 Tomorrow’s Value Research -- shows that companies today are increasingly aware of sustainability issues and opportunities and actively integrate sustainability into core business strategies and decision-making. But as companies become more responsive to the Global Reporting Initiative (GRI) guidelines and other reporting frameworks in an effort to drive comparability, they are beginning to lose sight of the why.
In 2000, sustainability came dangerously close to "greenwashing." Reporting standards, investors and other stakeholders since have persuaded reporting companies to disclose management approaches, but the pendulum has now swung too far. In 2012, sustainability reporting has become an almost obligatory box-ticking exercise demanded by stakeholders.
It shouldn’t be this way. Sustainability reporting shouldn’t be looked at as an obligation, but as an opportunity to drive continuous improvement toward the "big challenges" that we, as a company and as a society, face. After all, reporting affords companies the opportunity to collect data and see the impacts they are having on the planet. They get a chance to streamline their processes as the report brings together initiatives and programs from various business units. They get to set targets, learn through case studies, and find opportunities and risks by just going through the process of putting together this (now) massive report.
If the why is missing, it may be our (the sustainability industry’s) fault. Sustainability reports read like we asked them to: Companies show us their key performance indicators, whether they've hit five-year goals and how many women they've hired in the last year. And yet, the reports are lacking. While we appreciate the progress these companies have made so far, there is greater value to be achieved.
The missing piece, and the future of sustainability reporting, is the context around how a company’s reporting fits into global performance. It's great to know that a company has joined the Carbon Disclosure Project or cut GHG emissions by 10 percent. It’s much better to know whether this is really helping put a dent in global emissions, or whether a 10 percent reduction fits into a strategy that will have an impact.
While it’s great to see a company has added 1,000 new jobs, it’s better to see what this meant to the employment rate and the economic well being in the communities where the hires were made. The planet's big issues -- carbon, water and poverty -- show little signs of improvement, and yet when looking at sustainability reports, one gets the sense that serious progress has been made.
Next page: Progress to real change