Corporate sustainability reporting has to become mandatory in order to reach sufficient progress towards sustainable development, writes Paul Hohnen, a consultant and Associate Fellow of Chatham House, in the Guardian. Governments should agree on globally valid guidelines of how companies are to report on sustainability aspects – the upcoming Rio+20 conference being perhaps the best opportunity they’ll get, he urges. This is because voluntary environmental and sustainability reporting by companies can only deliver so much. Inconsistencies and variations in reporting quality and quantity make it difficult to compare and invest. Adding to that, “Sustainable development cannot be reached without the full engagement of the business sector. There must be transparency on the impacts of current behaviour and business should focus its unmatched entrepreneurial, technological and financial power on delivering solutions to the world’s problems.”Faced with the monumental environmental and social challenges of an overheating world, there is no option for businesses but to work with governments and international agencies to develop a universally accepted framework, UN Secretary General‘s High Level Panel on Global Sustainability urges in its recently published report entitled “Resilient People, Resilient Planet – A Future Worth Choosing“. Its recommendation: “mandatory reporting by corporations with market capitalizations larger than $100 million”.
“Sustainability information is increasingly material to the future health of most corporations and to that of the economies and societies they work in. If we continue to rely solely on financial reporting, we risk triggering both an economic and ecological meltdown.”
However, mandatory sustainability reports are not only about making sure businesses assume responsibility and act like decent corporate citizens. Rather, as Paul points out, “Capital markets only operate efficiently if they can accurately price risk and management quality. Sustainability information is increasingly material to the future health of most corporations and to that of the economies and societies they work in. If we continue to rely solely on financial reporting, we risk triggering both an economic and ecological meltdown.”
Older blog posts on sustainability reporting:
Reporting: Sustainability accountants wanted!
Accountants should assume a more active role in helping companies improve their sustainability performance, the Financial Times recently wrote. Not only is sustainability reporting – often the first step to action – gathering importance and momentum, it is also spreading rapidly through supply chains and logistics infrastructures. Who, if not the accountant, could cope with … Continue reading »
Corporate environmental accounting – is there a limit?
German sports giant Puma has generated quite a hype with its recent publication of the world’s first environmental profit and loss statement. Commentators have argued that this is a big step for accounting practices, accountants being sometimes described as someone who knows the cost of everything and the value of nothing. As the Guardian puts … Continue reading »
GRI – new sector guidelines, new momentum?
The Global Reporting Initiative (GRI) – provider of the world’s most widely used sustainability reporting guidance – announces the launch of the Food Processing Sector Supplement and NGO Sector Supplement during the Amsterdam Global Conference on Sustainability and Transparency, 26 – 28 May 2010, as Chris Milton reports on the SustainabilityForum. He further observes that … Continue reading »
Picture credit: 
Elsie esq.(Flickr)
Related articles
- Sustainability Reports: Worth the Effort? – by Dunstan Allison Hope (greenerscience.wordpress.com)
- Where Sustainability Reporting is Headed: A Preview of the E&Y and GreenBiz Survey (triplepundit.com)
Reblogged this on GreenerScience.
Posted by Nel E | February 23, 2012, 20:34