Corporate Eye

Sustainability Reporting in the EU

A couple of weeks ago the EU published the 173 page report “The state of play in sustainability reporting in the European Union“. 

It really is, as Bill & Ted might say, a most excellent, triumphant and bodacious report.

Although it has no Socrates, Genghis Khan (who “enjoys Twinkies because of the excellent sugar rush”) or Napoleon (“a short dead dude”), it is thorough, comprehensive and in depth.

It’s also (unlike Bill & Ted’s Excellent Adventure) down to earth and realistic.

In addition to the usual introduction and conclusions sections, the report’s detail is split into three main perspectives: company, regulatory and reader.  Each of these is then further pulled apart to give a high granularity of detail.  For example, companies’ involvement in the four main reporting trends of online reporting, external assurance, stakeholder engagement and integrated reporting are all looked at.

There’s also an excellent set of appendices, covering everything from major awards and rankings through to 27 schemes and assurance methodologies.

I’m not going to get any more in depth other than strongly recommend that you take the time to download and read this report.  It’s of real interest to anyone in the EU, and for anyone outside the EU perhaps the first of these “things which stand out for me” will convince you of its importance:

  • around 40% of worldwide CSR reports come from the EU; a huge proportion which must skew how the CSR reporting framework is being developed;
  • the largest sectors reporting at GRI and UNGC level are support and financial services; not surprising given that these have the smallest materials supply chains;
  • “there is no information available on the effect of the rankings and awards on reporting performance, the quality of the sustainability reports and numbers of reports being published”; solving this is vital if these are to be seen as the driver for non regulatory reporting;
  • roughly the same number of companies are members of the GRI and UNGC around the world, except for in Europe where four times the number of GRI participants are members of the UNGC; this show a larger appetite for reporting in the EU than elsewhere in the world;
  • between a quarter and a half of all UNGC participants in the EU fail to produce a COP on time; combined with the point above, this shows that while the appetite may be there, the commitment is not;
  • trends to look out for are: the use of social media to articulate communication, the use of XBRL to gather data and a closing gap between the different standards

However the most important statement I saw was this:

companies and readers agree (that the) regulation of the development of sustainability reports, the content of the reports and the verification of these reports could offer important benefits when it comes to quality, credibility and comparability of reporting

I know of very few companies which support the regulation of sustainability reporting.  However, given that this report comes from the EU (which favours regulation in this area) the statement is another important signpost as to how people should set their expectations for the future.

The following two tabs change content below.
A former CTO, Chris has a broad and varied background. He’s been involved with blue chips, consultancies & SMEs across a wide variety of sectors and has worked in Europe, the Middle East and Australia. In 2007 he decided to combine his knowledge of business and IT with his passion for all things sustainable and has been busy writing ever since. However, his greatest ambition remains to brew the perfect cup of coffee.