|
July 11, 2006
Some Applaud Rise in Sustainability Reporting, Others Say It Masks Corporate Un-sustainability
by Bill Baue
A new study documents the increase in sustainability reporting, but a paper by St. Andrews
researchers considers corporate sustainability an unrealistic goal under current economic system.
SocialFunds.com --
Corporate sustainability reporting is on the rise, according to a new study of S&P 100 companies released today by the Social Investment Research Analysts
Network (SIRAN) based on research conducted by
socially responsible investing (SRI) research firm KLD Research & Analytics. More than three-quarters (79 companies)
of the S&P 100 now have special website sections disclosing their environmental and social policies
and performance, up 34 percent from 59 companies in last year's inaugural study. The percentage of
companies using Global Reporting Initiative (GRI) guidelines rose from a quarter of the S&P 100 in
2005 to more than a third (34 companies) this year.
While many observers applaud this rise
in sustainability reporting, researchers from the Centre for Social and Environmental Accounting
Research (CSEAR) at
Scotland's St. Andrews University question the basis of sustainability reporting, arguing it may do
more harm than good. Professors Rob Gray and Jan Bebbington turn the "business case for
sustainability" on its head, pointing out that our current capitalist system essentially structures
corporations to be "un-sustainable."
"'Corporate Sustainability' has more than a little
of the oxymoron about it," write Profs. Gray and Bebbington in a paper entitled "Corporate
Sustainability: Accountability and the Pursuit of the Impossible Dream," a chapter in the
forthcoming Handbook of Sustainable Development. "[A]n organization which is demonstrably
using non-renewable natural capital and/or failing to replenish or substitute for other forms of
natural capital and which can be shown to be exploiting and advancing social inequality and/or
other forms of social injustice is clearly, in itself, un-sustainable."
"Further, if all
(or most) economic organizations could be seen to be significantly un-sustainable then we may
conclude that our economic system is, itself, un-sustainable," they add. "[W]e are entirely
convinced that the un-sustainability we currently face is deep, systemic, and only barely,
recoverable . . . we are unable to imagine substantial reductions in un-sustainability without
profound structural and systemic changes--and soon."
Corporate sustainability reporting,
Profs. Gray and Bebbington argue, does not seek to reform the system, but rather to highlight
tweaks in social and environmental performance from within capitalism's structure (that prioritizes
profit above social justice or environmental stewardship.) Therein lies the fatal flaw of
sustainability reporting, according to the authors--that it holds out a false hope of companies
achieving true sustainability when in fact the best they can do is disclose their degree of
un-sustainability.
"The danger, of course, is that . . . the very concept on which the
future of the planet depends--sustainability--will be emasculated, appropriated and destroyed by
(at best, well-meaning) assertion in the interests of corporations," state the authors. "As things
currently stand, we believe we must treat the current crop of 'sustainability reports' with the
profoundest mistrust as one of the most dangerous trends working against any possibility of
a sustainable future."
Steve Lippman, a member of the SIRAN steering committee and vice
president of social research at Trillium Asset Management, shares the authors' concerns over the
limitations to voluntary corporate sustainability. He also sees the need for a system of laws and
regulations that require certain environmental and social performance from companies rather than
hoping the marketplace and voluntary action will lead to the goal of sustainability. However, he
does not share their depth of cynicism over sustainability reporting.
"I think it does
help promote a move towards sustainability when financial markets begin asking companies to report
how they are managing long-term environmental and social challenges, from climate change to
employee diversity," Mr. Lippman told SocialFunds.com. "And with a growing number of investors,
employees, business-to-business customers, and others looking at sustainability reports, I think
companies that try to greenwash only paint themselves into a corner where they have to take more
action to meet the expectations they've raised for themselves with their key stakeholders."
In the end, the differences between Mr. Lippman's perspective and those advanced by Profs. Gray
and Bebbington boil down to evolution versus revolution. Sustainability reporting either moves
corporations toward the ultimate goal of social and environmental sustainability, or it impedes
progress because this goal cannot possibly be achieved until the current capitalist structure is
replaced by one prioritizing sustainability over profit.
What that new structure might
be remains undefined by Profs. Gray and Bebbington in this paper. In the meantime, they argue for
sustainability reporting that takes accountability for the extent to which corporations
cannot be sustainable. Even this, though, may prove an elusive goal.
©
SRI World Group, Inc. All Rights Reserved.
Top
| 
