September 16, 2004
Report Advocates Breaking Down Barriers to Global Corporate Sustainability Reporting
by William Baue
An Association of Chartered Certified Accountants and CorporateRegister.com report tracking
sustainability reporting worldwide finds its growth hampered by obstacles.
Last week saw the release of a report gauging the status of corporate sustainability reporting
throughout the world. Looking back, the report recognizes significant growth in such reporting,
but looking at the present and future, the report laments a number of obstacles blocking greater
uptake of what it considers a necessary development for companies. The report comes from the
Association of Chartered Certified Accountants (ACCA), which established the world's first environmental
reporting awards in 1990, and CorporateRegister.com, the world's largest directory of
corporate non-financial reports.
"Global progress in sustainability reporting is
indisputable," states the report, entitled Towards
Transparency: Progress on Global Sustainability Reporting 2004. "In a relatively short space
of time much has been achieved, but we should not assume that the task is even half completed."
"The number of companies reporting is insignificant when compared with the total number of
businesses operating in the world today," adds the report, which pegs the number of companies
worldwide producing sustainability reports at 1,500 to 2,000.
Obstacles identified by the
report include lack of consistency in approaches to external assurance, which hampers credibility;
weak support from governments guiding or mandating sustainability reporting; and slow buy-in by
"While pressure is being increasingly brought to bear by socially
responsible investors, [support for sustainability reporting] has yet to be taken up seriously by
mainstream investors," the report states. "We need to identify the dynamics of successful
reporting and work to develop the necessary initiatives, codes, regulations, and other factors
which will remove the blockages in slower regions and business sectors."
Toward this end,
the report includes profiles of exemplary sustainability reports in each of the geographic regions
covered: Africa and the Middle East, the Americas, Asia and Australasia, and Europe. Profiles,
culled from winners of ACCA reporting awards that now cover 20 countries, address issues such as
reporting processes, assurance mechanisms, and the business case for sustainability reporting.
For example, the report cites a statistic from the Anglo American Platinum (ticker: ANANP) of South
Africa sustainability report that the company's HIV/AIDS program for employees saved the company 42
million rand in 2003 and may save 1,400 lives a year.
"[T]he cost of reporting itself is
minimal . . . our employees and shareholders increasingly require that we are socially and
environmentally responsible," said a company spokesperson.
supplies robust statistics tracking past and current trends in sustainability reporting. While
information on developed economies (such as Western Europe and North America where sustainability
reporting is advanced) is readily available, data and analysis of sustainability reporting in
developing regions is more rare and hence of great interest.
For example, the report
reveals how Brazil is one of the only South American countries with significant sustainability
reporting. This trend resulted from promotion of social reporting by the Brazilian Institute of Social and Economic Analysis
in the late 1990s and the Ethos
Institute for Companies and Social Responsibility publishing a corporate social responsibility
reporting guide in 2001.
Furthermore, Global Reporting Initiative (GRI) guidelines, the primary standard-setter for
sustainability reporting, have been translated into Portuguese for Brazilian audiences. Brazil
accounts for 3 percent of sustainability reports produced in the Americas from 2001 to 2003, based
on a sample of 708 reports tracked by CorporateRegister.com. Chile, Mexico, Costa Rica, Argentina,
Venezuala, and Colombia combined account for less than 3 percent, while Canada accounts for 31
percent and the US accounts for 63 percent.
GRI guidelines have also been translated into
Japanese and Russian, through perhaps for opposite reasons. The expansion of socially responsible
investing (SRI) in Europe and North America created a ripple effect in Japan encouraging corporate
transparency and driving sustainability reporting. Japan accounts for almost half (49 percent) the
893 sustainability reports tracked by CorporateRegister.com in Asia and Australasia in 2001 to
Russia, which accounts for only 0.2 percent of the 1,964 European sustainability
reports tracked in 2001 to 2003, represents a significant potential for increased sustainability
reporting as a developing economy with a huge population base. Integration into the global economy
is driving sustainability reporting elsewhere in Eastern Europe, as GRI guidelines are being
piloted in the Czech Republic, Croatia, and Hungary, which jointly account for just over 1 percent
of reports in 2001 to 2003.