Corporate sustainability reporting: How relevant to ecological health?

Background/Question/Methods

Corporate sustainability (or corporate responsibility) reporting is intended to advise the public of a company’s commitment to environmental, economic, and social practices. Sustainability reports are the mechanism for companies to communicate and promote these commitments to shareholders, global and other reporting entities, and the public. The reports are intended to provide transparency regarding the company’s progress toward these goals and communicate the extent to which they value their workers, customers, and the environment as they manufacture and distribute their products or services. Sustainability reports are typically thorough and detailed and can present hard figures – such as the carbon dioxide emissions reduction year-over-year, contaminant discharges reduction in wastewater, or the reduction in particulate emissions. These statistics are often set against a range of otherwise relevant and appropriate metrics in an effort to demonstrate the commitment to ecological and environmental health and annual progress toward meeting in many cases, specific goals. However what is not always clear is what methods or metrics are being used, and whether these metrics are valid. Do they facilitate a fair and accurate evaluation of a company’s sustainability reporting and more specifically, allow a clear understanding of potential impacts to a region’s ecology and environment?

Results/Conclusions

We evaluated publicly available methods used to assess and rank corporate sustainability reports. Several groups, organizations and universities have derived methods and specific metrics intended to assess corporate sustainability reporting quality and transparency, in order to “rank” companies. Some of these approaches look at the intent, performance and reporting for a range of factors; others actually rank the individual components of corporate responsibility plans against specific criteria and calculate numerical rankings. One organization actually relied on a survey of how the public “felt” about a company and then used the data to make inferences about corporate reputation. Certainly any company can be evaluated based on one single, discrete and measurable criterion, such as by worker injury rate, percent of revenues donated to ecological causes, or by percentage reduction of a particular chemical. However the complexity of sustainability reporting components and the lack of a suitably reliable metric to gauge the accuracy of sustainability reporting create difficulty in inferring the relationship of sustainability reporting to regional ecological and environmental conditions. We will present a summary of our assessment, which questions whether there are suitable metrics for evaluating a corporation’s actual impact(s) based solely on sustainability reporting.