How can we trust a corporation’s protestations of environmental friendliness if that corporation has nowhere defined what it means by “sustainability”?
As Spada’s White Paper on trends in Environmental Reporting points out, all too often a precise definition of some of the terms which appear in corporate reporting is missing. Nowhere is this more glaring than when it comes to sustainability, a concept which many observers might conclude is fundamental to any environmental reporting.
For example, of the 79 organisations from the FTSE 100 which use the term “sustainability” in their corporate responsibility reporting, only three define what they mean by it. They are: BP, British American Tobacco and GlaxoSmithKline. Unfortunately, however, even among just these three companies there is an absence of commonality.
For BP, sustainability essentially means “the capacity to endure as a group”, with the renewal of assets, attracting successive generations of employees, retaining customer trust and creating better products jostling with “contributing to a sustainable environment”.
Over at BAT, there is joy in having “again been selected as the only tobacco company in the Dow Jones Sustainability Indexes”, whose own definition is then outlined.
GlaxoSmithKline appears conscious of the need for definition, but unable to make any steps towards it: “Environmental sustainability – to embrace environmental sustainability as a driver for competitive advantage we need to define the principles of environmental sustainability and progressively integrate them into the business, translating them into practical action”, it says, rather weakly.
As a shareholder, you pays your money and you takes your choice. But when it comes to sustainability, it seems you might also be taking a somewhat ill-defined leap of faith.
