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COMPANIES FAIL TO REVEAL BASIC INFORMATION ON SUSTAINABILITY INDICATORS

A new report has shown that only 128 of the 4,609 largest companies listed on the world’s stock exchanges reveal the most basic information on how they satisfy their responsibilities to society.

The study realized by Corporate Knights Capital suggests that 97% of these companies are failing to provide data on the full set of the so called first-generation sustainability indicators including employee turnover, energy, greenhouse gas emissions (GHGs), injury rate, pay equity, waste and water.

Regarded to that, the study alarms that more than 60% of the world’s largest listed companies currently fail to disclose their GHGs. Additionally, three quarters are not transparent about their water consumption and even 88% do not divulge their employee turnover rate.

According to the authors, there is a direct link between transparency and companies' substantive action to improve their performance.

In this way, corporate reporting reform should encourage behaviour that improves longer-term value creation in order to achieve financial stability and sustainability, the International Integrated Reporting Council suggests.

Experts stress the importance to achieve a global mandate and a globally co-ordinated approach to corporate sustainability reporting, clearly understood and consistently applied. This strategy will reduce difficulties in interpretation and implementation for companies operating in different countries and markets.

Moreover, the International Organization of Securities Commissions (IOSCO) has determined global standards focusing in recent years on financial transparency. Additionally, over the coming months it will start looking at the responsibilities of companies around non-financial reporting.

In that context, the recent EU Parliament’s directive on non-financial and diversity information will drive to an increase in reporting on the seven first-generation indicators.

Furthermore, institutions, businesses and investors must undertake new direction thinking about value creation in a holistic sense, especially as they try to establish long-term value.

In this framework, experts highlight that businesses and companies leading the way are those that are responding to the changing needs of their stakeholder community, society and the external environment. In relation to that, the decrease of corporate reporting on the first-generation indicators stands in contrast to investors’ growing interest in establishing sustainable investment strategies.

 

The gLAWcal Team

POREEN project

Monday, 13 October 2014

(Source: The Guardian)