This dramatic increase reflects how sustainability reporting is increasingly seen as a way for companies and their stakeholders to see a changing world more clearly and create long-term value. High-quality sustainability reports allow for:. So how can you produce a good sustainability report?
It is designed primarily for first-time reporters, offering a clear and simple process framework to structure the reporting journey. If you are an experienced reporter, this guide may nonetheless provide some tips and best practices that can help you improve your process, product, and impact.
If you are a BSR member, you can simply email us at web bsr. Read More. The time is now for an overhaul of the social contract to address 21 st -century realities and needs. Governance structures and processes that show readers this stuff really matters and is reviewed, managed and acted on, just like other important areas of your business.
Clear goals and targets in each of the main issue areas. An overview of performance against key indicators , with some analysis and explanation of trends over time. Stories that inspire your readers about your progress. Maybe you do, too -- as an employee, investor, researcher or activist. Here, then, are five tips to help you make sense of the next report that lands on your desk or arrives via email.
Pay attention to what's in the report -- and what's left out. Lots of companies fill their sustainability reports with anecdotes, but these are often off point. Chevron's corporate responsibility report [ PDF ] says a Chevron executive in Angola is part of "a team that protects endangered turtles that come ashore to breed, dig sandy nests and lay their eggs on the beaches at Chevron's Malongo oil production facilities.
Figuring that out from the report is hard, if not impossible. Chevron reports that its emissions from operations were That sounds like progress. But you have to read the footnotes to learn that the decline largely was caused by the sale of one refinery in Alaska and "decreased production" from a second refinery in Richmond, Calif. What's more, emissions from operations account for only part of Chevron's impact.
The company's report says, "Combustion of our products resulted in emissions of approximately million metric tons of CO2 in , approximately 8 percent less than the million metric tons emitted in Is the fact that people are burning less gas and oil good for the planet but bad for Chevron?
The report doesn't explain. More important, is Chevron trying to move away from fossil fuels and develop cleaner forms of energy? It doesn't seem to be, as the word "renewable" appears nowhere in the body of the report. Follow the big money. A good sustainability report should focus on those company activities that have the greatest impact. So, for example, what matters most in the financial services industry is not paper consumption, LEED-certified work spaces or direct greenhouse gas emissions, but lending and investment practices.
Citi's most recent report [ PDF ] says it opened 23 LEED-certified branches in -- a data point that is hard to put into context because the report doesn't say how many branches the company operates and not very meaningful, in any event. However, neither investment strategy was found to yield meaningful social or environmental outcomes. A small but fast-growing subsection of socially responsible investment—impact investing—is specifically focused on addressing societal challenges. Some impact investors are explicit about their willingness to make financial trade-offs; others promise to address social and environmental issues without negatively affecting market returns.
Here, too, there are issues. Even if you accept the premise that some of these investments will deliver social or environmental progress, not nearly enough capital is allocated to the impact investing category to address the huge challenges we face.
That will probably be true as long as corporations are allowed to ignore externalities—the spillover effects that their operations have on society. Most of the sustainability effort at Timberland went into measuring and improving areas where the company had some control.
However, researchers have found that those parameters are rarely sources of real impact. The late Donella Meadows, the primary author of The Limits to Growth and a distinguished professor of system dynamics at Dartmouth, analyzed 12 types of intervention that would affect system performance and concluded that parameters are the least powerful.
Featured images from the Without Water exhibition series Isamu Sawa. High-leverage interventions that would move the needle are largely outside the control of individual corporations. Unfortunately, Sustainability Inc. The real danger is when politicians and CEOs are making it look like real action is happening when in fact almost nothing is being done, apart from clever accounting and creative PR. Corporate commitments to science-based goals are one promising path to improvement.
These are welcome advances. But if we are to bend the global emissions curve downward and address growing environmental and social challenges effectively, a more aggressive approach is needed.
The following suggestions are places to begin. The current plethora of authorities and frameworks for ESG measurement is unwieldy, confusing, and burdensome for companies. The European Commission and the International Financial Reporting Standards Foundation are undertaking other efforts to improve reporting practices. No matter what standard ultimately prevails, sustainability reports must be mandated and audited by an empowered referee.
Vested interests and system inertia have been formidable obstacles to progress. Attempts to self-regulate have delivered incremental gains that have been subsumed by business as usual and the unyielding pressure to grow. However, with mounting evidence that climate change is harmful and accelerating, grassroots global movements for action—such as the Sunrise Movement and In the United States, tens of billions of dollars have gone to subsidies for biofuels, including ethanol. This makes no sense.
We are using taxpayer money to subsidize energy sources that accelerate future environmental damage. Executives and investors operate in keeping with the rules and incentives of the system.
If their behavior is to change, the rules that governments set and enforce also need to change. More specifically, as a partial list, corporations should be prevented from co-opting the regulatory apparatus; carbon emissions should be capped or taxed to account for their social costs; the agriculture industry should be incentivized to transition from spewing carbon to sequestering it; and lawmakers should ban the building of new thermal coal plants as a source of primary energy.
In addition, as Meadows pointed out when discussing leverage points for system intervention, our mindsets and assumptions about how the world works are potential sources of profound impact. Commitments to concepts such as regenerative agriculture, reuse, and collective value represent first steps in the right direction.
After two decades of trying, it should be clear that the market alone will not address worsening social and environmental challenges.
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