What created these dramatic headlines? A simple law known as Sara 313, or the Superfunds Amendments and Reauthorization act. Tim Mohin, an author of the law, writes in The Guardian about how the required reporting mechanism asking companies to simply tell how much they released certain toxic substances and release that information to the public created a media frenzy. The key was that the information was concise, comparable, and addressed a specific issue. You could get your hands around how much mercury a company was releasing every year and think: how is that happening in my back yard?!?
Mr. Mohin goes on to despair of the current proliferation in sustainability reporting. While he sees benefits to the increased transparency, the movement also has its pitfalls, as he writes:
While transparency can drive comparison – and action – too much transparency can, ironically, work against the end goal of improving performance. Today’s sustainability ratings address factors ranging from environmental emissions to the diversity of the workforce to the compensation of the CEO. These myriad measurements, summed up under the umbrella of “environmental, social and governance” (ESG) metrics, are rarely presented in a way that enables easy comparison between companies. In essence, when we measure too much, we can lose the signal in the noise.
One good example of this is the Global Reporting Initiative, which advertises as the de-facto global standard for corporate sustainability reporting. It encompasses about 90 “key” performance indicators, which require companies to gather together reams of information. To put this in context, the 2014 survey for the Dow Jones Sustainability Index was 129 pages long!
Not only are these reports a lot of work, but their complexity makes them inaccessible to most people.
He then goes on to cite the organic food movements culmination in the USDA Nutrition Label as a good way forward. And that may be correct, maybe we do need a nutrition label for sustainability products as I wrote about earlier this year. But perhaps part of the issue is that sustainability is so broad, so all-encompasing, that we need a series of more focused approaches to deal with different issues. In this way, sustainability reporting will always be 100+ pages when you are truly engaging the issue… but again, it circles back to whether or not these reports have the impact and ability to change companies. What do you think readers? Is sustainability reporting the way forward or are we diluting issues and only serving up another distraction in the form of green washing?