Thursday, March 5, 2009

New study on sustainability reporting

For those of you who spend their lives reading sustainability reports (ok, dont all shout at once), Ernst and Young have just published a study surveying 100 reports coming out of 15 countries mainly in Europe in 2007 (up to 31.3.08). 35 pages all about reporting, isnt that neat ? You can read the report here. The report addresses the quality of sustainability reporting and makes recommendations to do it better. The quality is assessed against 5 criteria;
  • stakeholder management
  • balance (positive / negative reporting)
  • comparability (trending)
  • readability
  • reliability
  • disclosure on management approach
Bottom line: reports need to be more focused. Less shopping list and more of what matters.

Ok. That's it.

Well, not yet. You know me ... can't help but comment for all you busy people who dont want to read the entire thing, here are some subjectively selected highlights:

  • 44% of reports are longer than 75 pages - which plays to a point made by Mallen Baker that longer is apparently better ! Mallen you are vindicated.
  • 81% of reporters use the GRI framework - i like this of course - i believe the GRI framework is the best existing framework for reporting, not perfect maybe (!) but the best ... 81% is a higher number than usually quoted
  • 76% of reports contain mainly positive data with hardly any negative disclosures - aha! now it's in black and white. Reporting is still seen as a good news exercise. Paradoxically, the more the good news, the less the credibility. Wonder why companies dont get this.
  • 47% of reports include descriptions of stakeholder dialogue by stakeholder group. Stakeholder dialogue is a core concept of sustainability. Over half the reporters therefore are not addressing this in a comprehensive way. Interesting, really. I think the issue of dialogue is one of the most significant barriers to achieving true sustainability. businesses are afraid of dialogue. Dialogue is the route to true accountability. However, 47% is in the right direction.
  • On a similar track, only 36% of reports include or discuss stakeholder criticisms. There was even one company who reported that all the stakeholders had absolutely no criticsm. Wow. Isnt that neat ? Bet their CEO is paid a whopping bonus ...
  • 67% of reports include data which is comparable to previous years. This is an important point. one of the core issues i find in reports is that data is often in a vacuum. Lack of context. Dumping a load of figures in a table is not reporting. It's dumping. Guess that's obvious, right ? 67% is higher than i would have expected.

there is lots more interesting data in this report, which is a good comprehensive review. Well done to E&Y.

I guess what i miss is the core issue of materiality. Surely one of the criteria for assessing a sustainability report is whether there is an analysis of material issues and a discussion of them, particlurlarly sector-relevant materiality issues. One of the first things I look for is a list of material issues or a materiality matrix. Maybe i am just too demanding ...

Anyway, thanks to E&Y for providing me with a blog post this week. Wonder if they can do a survey next week too ?

No comments:

Related Posts with Thumbnails