Soul Economy

The corporate sustainability agenda - the social, economic and environmental impact of business often referred to as CSR (corporate social responsibility or in most recent days as ESG (environment, social and governance performance) - is increasingly moving into the board room due, in no small part, to the increasing awareness about climate change consequences and the emerging sense of urgency that comes with it.

The sole purpose of sustainability reporting is to summarise and report to the public - shareholders, financial analysts, social profit groups and consumers - about progress made in social, environmental, governance and economic performance of a company.

Below is a summary of key developments, the benefits and barriers for business and key issues currently debated around sustainability reporting.

1. We have seen a great increase in the number of reporters to more than 50% of companies in the Fortune 500 list and 41% of the top 100 companies in financial capital markets such as Japan, Europe, USA and Canada in 2005. By the end of 2007 approximately 6800 companies in Europe alone had issued sustainability reports.¹ Impressive growth has been seen in France most recently, related to the introduction of mandatory reporting legislation. Australia has lagged behind in comparison with about 23% of the top 100 listed companies issuing sustainability reports. Twice as many of those reporters are foreign owned companies. However, up take is increasing rapidly and if current rates continue all of the top 500 companies should be reporting by 2035.²
   
2. There has been a general shift from environmental reporting to ‘integrated sustainability reporting’. The average number of years that USA and European companies have issued such reports has been about 5 to 5 ½ years often commencing with separate social impact reports but increasingly moving towards the inclusion of economic, environmental and social issues. Westpac for example, a long time leader in sustainability has issues a separate “2007 Stakeholder Impact Report”.
3. There has been an increase in the volume of information, both printed and online however, it has not led to an equal increase in more insights into relevant and material issues.
4. The Global Reporting Initiative (GRI) (www.globalreporting.org) has emerged as one of the key players but is not without its critics due to the fact that it has not produced easily comparable reports despite best efforts. Particularly financial analysts have been left wanting easily comparable information.
5. Last but not least, 2007 has seen the emergence and strengthening of existing awards aiming at encouraging best practice in integrated environmental, social and governance, in short: sustainability reporting. Among these were the ACCA Australian and New Zealand Awards for Sustainability Reporting with 50 entries, up by 39% from last year, the GRI Readers’ Choice Awards in which more than 1700 people from 70 countries have scored an initial 800 reports which included several Australian reporters; and the online Corporate Register Reporting Awards, presented by www.CorporateRegister.com, in which more than 20 industries were represented and 300 reports were entered into the Awards.

Tags: corporate social responsibility, corporate sustainability, CSR, environmental social governance, ESG, ethical companies, Global Reporting Initiative, GRI, sustainability reporting