Sustainability suffering as reporting becomes ‘box-ticking exercise’

The 2012 Tomorrow’s Value Research (TVR) by DNV Two Tomorrows says that while an increasing number of organisations are painting a legitimate picture of sustainability success, the reality is that on a global scale they are far from reaching solutions.

2012 TVR director Todd Cort, said that companies were becoming too introspective in their reports.

“Large companies around the world are providing greater and greater transparency in the form of metrics, targets and descriptions of their management approaches. This is evident in the continual rise in GRI reporters and in the improved scores year on year in our research,” he said.

Cort added: “However, it is evident that companies are losing sight of the big picture: are we successfully addressing the global challenges that we all face? Such challenges require collaborative solutions.

“We have seen through the research that the vast majority of metrics, targets and management approaches look away from the impact or success of collaborative efforts to tackle sustainability challenges.

“Instead, these indicators focus increasingly on the sustainability aspects within the company’s sphere of control. Companies are becoming too introspective in their reports. ”

The research showed that Europe continued to drive best practice in sustainability with an average score of 69%, but the greatest improvements in reporting occurred in large Asian companies, in countries including Korea, Australia, China and India.

Companies such as HP, Panasonic and Siemens were commended for demonstrating best practice in their sustainability programmes. However, DNV Two Tomorrows claims the success of these companies also demonstrates the difficulty that most have in moving up the ‘ladder’ to leadership.

Only 10 of the 19 Dow Jones Sustainability Index’s super-sector leaders scored over the leadership threshold (70%). Furthermore, less than a third of the largest companies managed also scored over the threshold.

The research revealed that the most robust management and governance structures remained in the traditional ‘high risk’ industries such as oil and gas and heavy manufacturing.

Cort suggested that in the last decade reporting transparency has improved dramatically but that this was working to the detriment of sustainability.

“In 2000, sustainability came dangerously close to green-washing. Reporting standards since have persuaded reporting companies to disclose management approaches, but the pendulum has now swung too far. In 2012, sustainability reporting has become an almost obligatory box-ticking exercise demanded by stakeholders.

“Sustainability reporting should instead be an opportunity to drive continuous improvement toward the big challenges that we face as a society,” he said.

Conor McGlone