February 23, 2005
Web Design, Lobbying Disclosure Fuel Co-Operative Bank Win of UK Sustainability Reporting Awards
by William Baue
The award judges distinguished between sustainability and corporate social responsibility
reporting, noting that many reports identifying themselves as the former (which are more rigorous)
were actually the latter.
Today at the British Library in London, the Association of Chartered Certified Accountants (ACCA) announced the winners of the UK Sustainability
Reporting Awards in 2004. Co-operative Financial Services (ticker: CPBB_p.L--commonly known as
Co-operative Bank) won the best sustainability report as well as sharing commendation for best
electronic reporting with BT Group (BT.L). FRC Group was honored for
the best social report, with Traidcraft named runner-up, and Thames Water (TW.L) received a commendation for
its environmental report. Commendations went to mm02 (OOM.L) for innovative reporting and
to Anglo American (AAL.L) for articulating the
challenge of sustainable development for their business.
ACCA, an international
professional accountancy organization with over 340,000 members in 160 countries, launched the
European Environmental Reporting Awards in 1996. In 2002 the awards were expanded to cover
sustainability reporting, which encompasses both environmental and social reporting, and the next
year awards were granted nationally throughout Europe. ACCA, which does not present awards on the
more mature format of traditional financial reporting, is now involved in 26 sustainability
reporting awards schemes around the world.
The panel of judges assessed more than
80 submitted reports on three main criteria: completeness (40
percent), credibility (35 percent), and communication (25 percent). The judges short-listed eight
submissions each in the sustainability and social report categories, but only two environmental
reports. The dearth of qualifying environmental reports is only partly explained by the trend of
replacing environmental reports with more comprehensive sustainability reports.
judges have perceived a decline in the quality of environmental reporting over the past few years:
only two of the 23 environmental reports submitted in 2004 made it onto the short list," states the
report. "[S]ustainability and social reports seem to be leading the way, and the judges,
overall, found them to be more impressive."
Perhaps the most interesting judgment of the
panel was its opinion on whether the concepts of corporate social responsibility (CSR) and
sustainability are synonymous, distinct, or complementary.
"One interpretation of the
differences between sustainability and CSR is that an organization may be operating in compliance
with legal environmental standards and regulations and may be reducing its environmental burden
year-on-year, while still creating a resource, pollution, and waste impact which is beyond the
carrying capacity of the receiving eco-system," state the judges. "This situation may be perceived
to be in accordance with CSR principles but not in accordance with sustainable development
According to this definition, the judges considered the majority of
self-described sustainability reports to be CSR reports in fact.
Report credibility stands
to improve significantly by enhancing the effectiveness of assurance statements, for example by
disclosing the independence of the assuror and addressing the previous year's recommendations,
listing changes made in response to past assurance statements.
Many of the award judges'
past recommendations for better sustainability reporting still apply, such as disclosing public
policy positions (as Co-operative did) and assessing the materiality of sustainability issues (mmO2
used a five-part materiality test from AccountAbility).
The reports were evaluated
with particular attention paid to stakeholder engagement, this year's theme for the awards,
yielding mixed results. For example, almost two-thirds (65 percent) of the reports explicitly
identified their stakeholders. Of these, however, only a little more than a quarter (27 percent)
differentiated between key and wider stakeholders, and only seven percent indicated the process of
identification. Similarly, more than three-quarters (76 percent) of the reports encouraged
stakeholder feedback, but less than a quarter (23 percent, or 15 reports) explained how the
feedback would be used.
Also today, award sponsor CorporateRegister.com, an online resource that posts
more than 9,000 environmental, social, and sustainability reports dating back to 1990, published
the sustainability reporting status of the FTSE 100
"Of these top 100 companies, 82 publish stand-alone non-financial reports,
16 publish information on their corporate responsibility issues in a different form, and only two
companies publish no such information at all," said Paul Scott, director of Next Step Consulting,
which established CorporateRegister.com in 1998.