Does CSR Reporting Help the Planet, or Just Help Reporting?
Does CSR Reporting Help the Planet, or Just Help Reporting?
The challenges to achieving true global sustainability seem more insurmountable as the years roll on. World leaders quibble over details of international climate deals while greenhouse gas emissions ascend unabated, a water crisis looms on the horizon, and oil spills underscore the environmental cost of doing business.
In the midst of it all, a number of sustainability reporting frameworks have emerged, inviting organizations around the world to disclose information on their environmental, social and economic performance. The Global Reporting Initiative (GRI), The Prince's Accounting for Sustainability Project (A4S), the Carbon Disclosure Project (CDP), and the Ceres and Tellus Institute Facility Reporting Project (FRP) are among the organizations that have developed voluntary reporting frameworks.
Further crowding the landscape of reporting bodies is the recently announced International Integrated Reporting Committee (IIRC), a child of GRI and A4S and would-be reporting panacea. On the heels of the success of One Report, a book by Robert G. Eccles and Michael P. Krzus that calls for the convergence of reporting content and guidelines, IIRC essentially invites participating organizations to provide one 'everything-to-everyone' integrated report merging environmental, economic, social, and governance data for a true cross-section of sustainability performance.
Though the spirit of the mission of sustainability reporting is to be lauded, there remain questions over whether reporting initiatives actually improve the environmental performance of participating organizations, or simply improving the quality of their reports.
Reporting for Reporting's Sake
As one of the first comprehensive sustainability reporting frameworks, GRI illustrates the challenge of negotiating the opposing spheres of reporting for sustainability's sake and reporting for reporting's sake.
Formed in 1998 by the Coalition of Environmentally Responsible Economies (CERES), a group of investors and environmentalists trying to integrate sustainability into capital markets, GRI was intended to set the standard for how an organization reported to stakeholders on environmental, social and economic performance.
After acquiring alliances with the United Nations Environmental Program (UNEP), it launched its first draft of sustainability guidelines in 2000 with 50 organizations reporting. Fast forward to 2010 and more than 1,500 organizations from 60 countries including corporate behemoths like Shell, Pepsi and Coke report in accordance with G3 guidelines (the most recent iteration of the GRI reporting framework), now considered to be the most prevalent sustainability reporting guidelines.
But lost in the "greenwashing" marketing gloss that accompanies GRI conformance is the question of whether participating organizations actually achieve environmentally and socially responsible objectives and, more importantly, whether or not they can prove it.
Consider that while ISO 14000 -- the most widespread family of standards on environmental management systems (EMS) -- provides a framework for managing an environmental program, it carries no intrinsic compass of environmental responsibility.
That is: An organization can pollute to the ends of the earth and retain ISO 14000 certification, as long as it conforms to the comprehensive (if ethically challenged) ISO 14000 standards.
Getting Stuck on the 'Reporting Treadmill'
Similarly, adherents to most sustainability reporting frameworks essentially conform only to reporting guidelines. For example, there are no benchmarks for success embedded in the GRI framework that ensure a reporting organization actually achieves tangible, accountable accomplishments that curb GHG emissions and target a sustainable future.
The preoccupation with reporting is also the source of other complaints, including the common concern that following guidelines set by GRI, A4S, CDP and now IIRC keeps organizations on a "reporting treadmill," forcing them to collect, analyze and report on fluctuating data on what seems like an interminable basis, often allocating significant resources solely towards reporting activities.
Sustainability reporting initiatives attempt to make the reporting process easy, with plenty of support resources online, and most claim reporting processes are smooth and straightforward. But the process of compiling data and generating reports is only as seamless as an organization's approach to data collection and management.
Further, opponents complain that reporting framework guidelines feature ambiguous performance indicators and a lack of accountability and enforcement mechanisms. The latter point is significant, as organizations are only required to describe their procedures and practices. There is no requirement calling for proof sustainable practices have been implemented.
Though a fan of the spirit of GRI's mandate, Corporate Social Responsibility guru Mallen Baker points to another critical flaw in the GRI approach, namely the fact a report is essentially a company's own narrative of its sustainability performance.
"All the current models of reporting expect the companies to provide their own narrative -- to tell the story complete," he noted on his blog. "And yet that doesn't work, because the end user actually doesn't read the reports, and doesn't trust the company to provide its own context. There are no expert interpreters of this information. All the focus on assurance is about checking data -- but that isn't the real issue. People by and large don't think the companies will lie about the data -- but they fully expect them to paint the best gloss on what the data actually means."
Somewhere between GRI and friends' overzealous focus on reporting standards and the noble spirit of making sustainability reporting as comprehensive and transparent as financial reporting, there is a golden mean that is arguably more passive, less resource-intensive, and -- quite appropriately -- completely sustainable. Businesses that implement a streamlined, electronic EMS featuring configurable reporting capabilities and real-time dashboards stand to benefit from two critical advantages.
Firstly, if all sustainability metrics are monitored and inputted across all business units on an ongoing basis and rolled up across administrative levels, much of the time spent measuring, collecting and analyzing data and generating reports that comply with reporting models will be eliminated.
The time and effort associated with generating comprehensive sustainability reports has been a major gripe among participant organizations and critics, and a streamlined, software-based reporting process curbs the time and manpower required.
Secondly, with real-time dashboards indicating the status of sustainability KPIs (GHG emissions, for example), an organization is able to monitor the pulse of its sustainability performance and gauge the impact of new initiatives.
In essence, instead of gauging and reporting on sustainability performance on an annual basis, an organization real-time dashboards and integrated reporting capabilities provide a means of perpetual monitoring and reporting.
Sustainability reporting frameworks cannot be entirely blamed for a strong emphasis on reporting methodology since it constitutes their very mission and raison d'être.
However, the vision of making disclosure on economic, environmental, and social performance as commonplace as financial reporting -- and as relevant to organizational success -- will only achieve widespread success if the reporting process is smooth, efficient and painless.
Paul Leavoy is a writer and researcher at Intelex, who focuses on environmental and sustainability issues affecting businesses around the world.
Photo CC-licensed by striatic.