Is Corporate Sustainability Reporting A Great Waste of Time?

As corporate sustainability reporting grows, the question remains – does it make a difference? A new report indicates that the practice needs a massive overhaul if it’s going to be of any use.

What could be less sustainable than reams of reporting that no one reads? That’s the concern voiced in a recent report by strategic thinktank and consultancy SustainAbility, which warns that companies are wasting time and money creating sustainability reports that aren’t effective.

After analysing over 50 interviews with its own professional stakeholder network, and a survey of nearly 500 sustainability experts and thought leaders, SustainAbility concludes that sustainability reporting has stalled.

Others throughout the sustainability reporting industry have come to similar conclusions.  Sustainability reporting is stalled, but there’s a ton of room for growth. The reason it’s plateaued is basically a marketing problem. People write these giant reports, plagued by special language and catch-all-categories, and don’t think about the audience. Changes in new media may also be detracting from reporting’s impact. The stakeholders who were initially the audience for sustainability reporting are finding other sources of information, including social media.

Many companies are producing reports that fail to connect with a broadening audience. Many of the intended stakeholders have quite specific interests. For example, issue-interested NGOs. Their information needs may be more specific than what is conveyed in a sustainability report that, by default, will have to paint a picture in broad strokes. Many reporting companies have lost their way, producing reports written for everybody and nobody at the same time.

So while the drive for corporate credibility and transparency has accelerated the sustainability reporting movement, SustainAbility argues that it’s time to take a step back and revisit the reporting agenda. The report says it’s not about how to “increase reporting”, or how to “make sure more people read sustainability reports”, but to focus on using the reports to drive better decision-making and thereby improve business performance towards sustainability.

To reinvigorate corporate sustainability reporting, and add more value to the process, companies need to zero in on what’s important to the key stakeholders. That can be done by integrating the most important materiality issues into the corporate transparency strategy, valuing the business’ externalities and looking at the unintended consequences of not taking issues such as resource scarcity more seriously.

Resource scarcity is a huge driver, not only for valuing externalities and managing risk, but because many companies may not realize they even have a resource dependency. It’s the underlying driver of why we are all worried, and why sustainability is so important.

One thought on “Is Corporate Sustainability Reporting A Great Waste of Time?

  1. Unfortunately so many sustainability reports are not acted upon because the are nothing but thinly veiled attempts at greenwashing stockholders, customers and the public at large. Producing a report is easy; acting upon a report to make real changes is hard which is why it is not done so often.

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