15.1.1 Corporate sustainability reporting
Corporate sustainability reporting is when an organisation gives an external account of itself in relation to a range of sustainability themes.
There are many thousands of such reporting initiatives by all manner of organisations under various headings including ‘corporate social responsibility’, ‘corporate responsibility’ and ‘corporate sustainability’.
Depending on the particular focus of the organisation and its reasons for reporting, each attempts to set out for external readers the organisation’s aim, purpose, range of policies, activities and practices, and provide an assessment of these with reference to a range of environmental and sometimes social concerns as well as their impacts (remembering these can be positive and negative).
The pressures leading to the development and uptake of sustainability reporting by organisations have arisen out of ethical and financial pressures from a range of individuals, shareholders, consumers and other organisations, including:
- the Coalition for Socially Responsible Economies (CERES) – a non-profit coalition of over 80 investor, environmental, religious, labour and social justice groups
- the International Labour Organization (ILO) – a UN agency addressing international labour standards
- the Global Reporting Initiative (GRI) – established in 1997 with a mission to elevate sustainability reporting to equivalence with financial reporting.
Activity 17 Sustainability reporting in your chosen organisation
Thinking back to the organisation you selected in Activity 9, does the organisation have a sustainability report of some kind? Are you aware of its environmental management strategies and performance? Would a sustainability report influence your engagement with the organisation?
If your chosen organisation does not have any form of sustainability reporting, then you can choose a similar organisation that does to answer this activity.
I’m not aware of any formal corporate sustainability report for the school, but there is statement in the school’s documents that refers to minimising environmental impacts by reducing energy use and water use. The emphasis on ensuring the pupils grow-up with an understanding of environmental issues and the importance of wildlife is one form of enacting corporate responsibility.
Environmental strategies are fairly ad hoc, but are improving following the introduction of recycling initiatives throughout the school and an emphasis on energy saving. I have no way of assessing performance because of a lack of reporting structures.
I am not sure if the existence of a report would greatly influence my engagement with the school, although it would be a good way of holding the school to its environmental commitments.
Voluntary sustainability reporting has now become almost mandatory for all major organisations in order to demonstrate their ethics and value system, and to demonstrate to interested parties (e.g. a consumer or shareholder) that the organisation is a responsible body. Specific examples of corporate sustainability reporting are presented in this. But this is just part of a much larger global picture. Reading 2 and Activity 18 gives a global perspective of corporate sustainability reporting.
Reading 2 KPMG international survey of corporate responsibility reporting 2011
Read the ‘Executive summary’ and ‘KPMG corporate reporting quadrants’ on pages 2–5 of the KPMG international survey of corporate responsibility reporting 2011 (KPMG, 2011).
Activity 18 KPMG sustainability report
Summarise the main advantages of sustainability reporting as set out in the KPMG reading. What does the report tell you about the importance of internal reporting systems and external communications? Are there certain types of businesses (e.g. electronics) that are leading on sustainability reporting?
The report claims that corporate sustainability reporting is advantageous because it demonstrates being a good corporate citizen, drives innovation and learning within the organisation, grows the business, and increases its value. Financial advantages in particular arise from direct cost savings and improved reputation.
The report suggests that credibility and trust of corporate sustainability reporting is dependent on data systems and integrity, particularly with increased scrutiny of organisations by a range of external stakeholders. Professional and ‘multi-channel’ external communication to a range of stakeholders is an essential part of corporate sustainability reporting.
The business organisations leading on corporate sustainability reporting are mostly extractive – raw material- and resource-using organisations, such as energy and mining companies. The electronics sector performs well according to the KPMG report. It is not clear from the summary if this is part of market differentiation as much as environmental concerns. It is interesting to note that metals, engineering and manufacturing organisations are considered to be ‘behind’ in adopting corporate sustainability reporting – although this does not mean they are not engaging in environmental management issues and concerns within the organisations.
Corporate sustainability reporting is clearly a major activity for large organisations, but it is time consuming and resource intensive to establish and run, particularly for smaller organisations and those without a ‘public’ shareholder and consumer base to report to. And while the KPMG report suggests it has become the ‘de facto law for business’ (KPMG, 2011, p. 2), it still remains a voluntary approach.