Does Anyone Believe Your Sustainability Report?

A U.K.-based consulting firm surveyed FTSE 350 companies on their disclosure practices, discovering just 75 companies on the index publish some kind of assurance to show the information had been verified. Of these, 62 were based on a recognized assurance standard and performed by a third party, the study found.

Investors clamored for a way to compare the credibility of the vast array of non-financial reports published by companies in their portfolios, particularly for greenhouse gas emissions, prompting the U.K.’s Department for Environment, Food and Rural Affairs (DEFRA), and a group of corporations including Barclays, BP, BAT, CII, SAP and BPR Group, to sponsor the research. Most companies don’t have their greenhouse gas emissions inventories verified: Just 38 did, while seven discussed carbon-reporting criteria and two statements clearly followed a standard.

A widespread problem facing the industry is the lack of standardization of assurance models, creating confusion for investors as to which hold more credibility: stakeholder panels, internal audit statements, celebrity endorsements or independent third-parties.

That’s a great question. The other thing is- they should ask – “Does anyone (actually) understand it?”

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Author: Dewita

Co-founder Ecotwist Labs.

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