Does Australian/ASX 200 sustainability reporting practice show weakness of ACSI or glass ceiling of GRI?

Australian Council of Superannuation Investors (ACSI) 2010 Study shows that the majority of companies on the Australian S&P/ASX200 stock index are yet to provide sufficient sustainability risks reporting, and an overall 5% decline in reporting practice. Are ACSI and GRI - and the rest of us - partly to blame for this outcome? 

Prompted by an on-line exchange about GRI Application Level statistics with Leeora Black, Managing Director, Australian Centre for Corporate Social Responsibility, I took a look at the study on the sustainability reporting practices of companies in the ASX 200 index, which is Standard & Poor’s ASX 200 Index of largest, listed companies in Australia. The study was published in July 2010 by the Australian Council of Superannuation Investors (ACSI).  ACSI assists its member superannuation funds to manage environmental, social and corporate governance (ESG) investment risk.

The annual study, now in its third year, measures progress of listed Australian companies with respect to sustainability reporting. And it provides some somber reading.  The 2010 report reveals a 5% decrease in overall reporting practices of the ASX 200, with 113 companies providing no reporting on sustainability, or only providing very limited information. Overall, the study noted that reporting practices of ASX 200 (ex ASX100) continue to be substantially lower than that of the ASX 100. In the 2010 study, there was a marked decrease in the number of ASX 200 (ex 100) companies reporting on sustainability, with 67% reporting on sustainability, down from 75% in the 2009 study.

The main conclusion ACSI draws from its research is that “the majority of ASX 200 companies are yet to provide sufficient reporting on their performance against sustainability risks, thus indicating that they do not fully appreciate the materiality of these factors.” 

While it is always tempting to point fingers at others and underline their ‘stupidity,’ I wonder if there is room for other conclusions:

First, does the limited number of sustainability reports (using GRI or other approaches) allow a real trend analysis?  

Second, does a declining trend (if that is the case) perhaps point to the failure of ACSI’s engagement strategy and - more broadly -the failure of the broader CSR/investment community (that includes me!) to make a more convincing case for and provide assistance with sustainability reporting?

GRI's 2009 database shows only 72 sustainability reporting entries for Australia. Noting ACSI’s conclusions and limited number of reporters in Australia, I wonder how GRI is planning to achieve its two main propositions that:

(a) by 2015, all large and medium-size companies in OECD countries and large emerging economies should be required to report on their Environmental, Social and Governance (ESG) performance and, if they do not do so, to explain why; and

(b) that, by 2020, there should be a generally accepted and applied international standard which would effectively integrate financial and ESG reporting by all organizations.

Overall, I remain surprised that so many companies (listed or not) do not leverage their existing corporate ethics & values, policies, systems and performance data to also generate a simple sustainability report without major cost implications. (See also some of my previous blog entries: What are Cost Drivers of Sustainability Reporting for First Timers? and Has GRI Reached Glass Ceiling? and attached article Sustainability Reporting using GRI Lessons Learned Nov09).

Do you feel ACSI – and others – may need to change engagement and support strategies? Do you feel that GRI may be setting itself up for failure? And how can Australian companies (and others) be further encouraged and supported to explore sustainability reporting?

One Comment to Does Australian/ASX 200 sustainability reporting practice show weakness of ACSI or glass ceiling of GRI?

  1. Leslie Back, Writer for Triple Pundit and on Board of Directors at ActGreen Partnership left this comment on LinkedIn:

    “Would we see a supposed, yet uncertain, “glass ceiling” on GRI in different economic times?
    I honestly believe (and since I am getting GRI certified in two weeks I SURE hope I am right) that we are only at the beginning. GRI has been around a bit, but general public appreciation and understanding of sustainability and social responsibility is in its infancy. It is at the starting gate. With new developments, such as Wal-Mart’s Sustainability index, more and more businesses will monitor and report social and environment practices and I think (or hope) that sustainability reports are one day as mainstream as annual financial reports.
    Again, I think the point is that public understanding of sustainable initiatives are rather new. am earning a Sustainable MBA right now. I can not tell you how many people have asked me what the “sustainability” part means. As public awareness increases so will corporate reporting.”

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