Future measures

While at the GreenBiz12 Forum in New York earlier this week, I got a sneak preview of the findings of the new Ernst & Young and GreenBiz Group survey of trends in sustainability reporting. The soon-to-be-released survey validates much of what I’ve seen firsthand in my work preparing sustainability and corporate responsibility reports for Fortune 100 companies in various industry sectors.

There’s been no slowdown in the number of reports being produced, despite the poor economy, noted John DeMelis, a sustainability assurance partner with Ernst & Young. DeMelis kicked off the standing-room-only breakout session by noting the links between the rise in sustainability reporting and drivers such as cost reduction efforts, growing investments in sustainability, an increasingly strategic approach to sustainability efforts, and intensifying calls for accountability. The report also revealed growing concerns around validity of the data contained in sustainability reports (more on that later).

Sustainability reporting is growing, but the tools are “suboptimal.” 
Reporting has clearly become de riguer among leading businesses, as a mere 7 percent of survey respondents indicated that they either don’t currently report or have no plans to do so in the near future. A clear majority - 75 percent – of those who do produce sustainability reports indicated that they follow the Global Reporting Initiative (GRI) sustainability reporting framework.

That’s the good news. The bad news – especially if you want rigor in your data – is that the tools used to capture data are “suboptimal,” said co-presentor Chris Walker, associate director of climate change and sustainability services with Ernst & Young.

Survey respondents cited Excel spreadsheets as the most common method for collecting data. Okay, that leaves a paper trail. But, the second and third most common means of data collection were email and telephone, respectively. (I could see the E&Y team cringe.) Some survey respondents reported using packaged ERP (enterprise resource planning) software, but all in all, automation of sustainability data collection is still fairly rudimentary.

This finding correlates with my experience in working with clients who were issuing their first sustainability report. First-time reporters often fail to comprehend the scope of data gathering required. They frequently lack relevant data collection methods and have to dig pretty hard to find the data called for by the GRI guidelines.

Inadequate data gathering methods can lead to the "irrelevant data, unsubstantiated claims, gaps in data and inaccurate figures" reported a Leeds University team in its examination of more than 4,000 corporate social responsibility (CSR) reports and company surveys.

As more investors rely on sustainability reports to guide their investment decisions, the squishiness of data becomes less tolerable. Given this state of affairs, the next trend is understandable.