Big firms fail to integrate their reportsJuly 2008
Annual reports and sustainability reports do not cross-reference each other enough, says a new study by a London-based communications consultancy.
Black Sun found that only 32 of the annual reports from the 60 largest UK companies made reference to the sustainability report, and 28 vice versa.
The study argued this was a wasted opportunity as the reader is left to work out any connections. 'It's imperative that both reports cross-reference one another and signpost relevant information,' it said.
'This shouldn't act as a substitute for including important content, but it can work well for sections such as governance, where the reader can be pointed to the annual report.'
The consultancy criticized a disparity between opening statements in annual and sustainability reports. 'Rarely is there consistency in terms of sustainability issues, making it difficult to discern a clear standpoint if both reports are read in conjunction,' it said.
Black Sun also noted that while nearly two-thirds of sustainability reports were independently assured, only eight per cent of companies assured the non-financial information in annual reports. It said this 'dented the legitimacy' of such data in annual reports.
One bright spot, however, was that three-quarters of annual reports had a clear description of the mechanisms in place to govern sustainability.
In a recent Global Reporting Initiative survey, 72 per cent of respondents said non-financial reporting should be integrated with the annual report.
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