Prof. Charles Cho provides an at-a-glance exec summary of the essential factors behind corporate sustainability reporting
- In reality, sustainability reporting varies quite a bit from country to country and depends on a bouquet of factors that include the social and political context of the country
- Linked to this, or even as a result of this, companies might invest in sustainability initiatives and reporting as a matter of corporate strategy and positioning – corporate social responsibility is sometimes used to derive competitive advantages.
- The key question remains: to what extent does sustainability reporting actually have a beneficial impact both on business and the planet and has it been empirically measured?
- Business focuses really on being less unsustainable so that they can continue to operate for the benefit of their shareholders and “create value”. Increased consumption drives growth and eventually translates into a greater use of resources despite the discovery and promotion of efficient processes and new technologies.
- BUT, corporate or business sustainability is simply NOT planetary sustainability.
- If corporate sustainability is indeed “just talk”, then it can also be beneficial in that such talk may create space and stimulation for organizations to work with areas in/for which they are currently weak.
- The talk may also create expectations, which the organization subsequently seeks to live up to.
- Corporations may erect rational, progressive and reputation façades that are defined and executed through various means of corporate initiatives and communication.
- Corporate sustainability disclosures are to a large extent voluntary, and despite the slow diffusion of sustainability reporting assurance, such processes remain relatively light.
- There is a growing movement towards a focus on investors as the main audience for sustainability reporting.
- All corporate stakeholders make their own assessment of the most important sustainability issues of a corporation be they human rights, environmental protection, or diversity in the workforce and make requests to the corporation in this respect.
- The more we raise awareness on these issues, the better the chance that firms improve their sustainability management by taking increasing numbers of issues into consideration.
- Corporate sustainability reporting is here to stay and it will continue to develop. Stakeholders increasingly require information about how organizations are doing in terms of economic, environment and social issues, and how their policies are developing.
- It is up to civil society to demand more authentic accountability from the corporate sector through regulations that advance planetary sustainability.
- Moreover, increase in societal awareness, which will result in further stakeholder and shareholder pressure on organizations, is needed.
- The fundamental definition of corporate accountability must be changed to internalize its responsibilities beyond shareholder wealth maximization.
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