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.
Image of corporate report by Daniilantiq via Shutterstock.
Next page: Progress to real change
The "why" is definitely
The "why" is definitely important. Looking at it from a business standpoint, consumers are becoming more savvy and your CSR efforts have to make sense in the real world or it just looks like Greenwashing. Having said that, most consumers are not likely to dig that deeply. Here's a couple of reasons why we should care about "why":
1. Enterprise needs stability to exist. Climate change and general environmental degradation undermine the stability of the infrastructure business needs to thrive. We need to have the long game in mind.
2. As our environment changes around us, social paradigms will change. Just as consumer attitudes, global affluence etc. change, markets will change, so must fundamental business practices and ethical frameworks.
Social change will come, possibly driving regulatory change. Those who fail to adapt to the shifting paradigm - which will be an ethical one - will be left behind.
Thank you for the interesting
Thank you for the interesting analysis and it is good to have the value of reporting highlighted. But it is a little naive to think that business has any interest in measuring its contribution to the (patchy) societal push for sustainable development. It is difficult and expensive enough to collect internal data, let alone commission experts to measure your impact on communities or the broader society. And then to attempt to compare yourself (probably unfavorably) with your peers. It won't happen.
*why* does the 'why' matter
*why* does the 'why' matter so much? If they do it to cut costs or get better PR or just be good citizens, so long as they deliver results, isn't that what matters most?
A ton of CO2 is a ton of CO2, regardless of the intentions of the one who produces it. Focusing on results, I feel, will get us much farther than focusing on intentions.
(and yes, as a Marketer, I get the value of knowing the intetions of actors, however, from a sustainability end-game reporting standpoint, it's pretty much irrelevant)
It is a very attractive and
It is a very attractive and justified title to this piece but I am not sure that the 'WHY' should be about the value of the impact to the big challenges as the blogs states (because as a company you understand very well how little your impact is on the very big picture). But the WHY should be about what the company strives for, how is it contributing to a certain mission and value it set out for it self. The "GRI followers" tend to forget sometimes to talk directly about how they contribute to society, what value they bring and what challenges they meet in this journey. That should be the real reporting:performance against the compant's role/contribution in society.
Speaking from the small end
Speaking from the small end of the UK business community; companies are only just beginning to see they might have a responsibility, at some time, to look at their businesses in terms of impact on others and the environment. What's strange is that many business people may already follow some sustainable behaviour at home without realising that they could, or should, try and get the same thing going at work.
From what I can tell, even if some companies measure or even report their policies & practices, it is probably due more to peer pressure & marketing than it is to them "getting it". There is little from government or a CSR movement to incentivise them to own the behaviour and, more often than not, they will end up making an effort, knocking off a few % or kgs of CO2, just to show willing without any idea whether their targets or behaviour is enough.
Having just read PwC's Low Carbon Economy Index (2012) and their conclusion that we need to plan for a warmer future (including even + 4-6 degrees)I'm inclined to believe that, just like obesity & smoking, people (and business) won't start owning it till something nasty happens.