CSR reporting often of ‘no use’ says professorJuly 2009
Information in most large companies’ CSR reports is virtually useless, a business management academic has argued.
In a stinging attack, Graham Hubbard, professor of strategic management at the Adelaide University School of Business, says his analysis of reports by 30 of the world’s largest companies has shown that ‘a great deal needs to be done to improve the quality of reporting for it to be regarded of any use at all.’
In a research paper he argues that most CSR reports contain information that is not material, comparable or balanced.
His study singles out US companies for ‘their relatively poor objective reporting’ and for misleadingly focusing on ‘what “good” they do for the community, rather than how they address the negative impacts on the community of their actions’.
The 30 companies assessed, including BP, ExxonMobil, HSBC and Nestle, were compared on disclosure of a range of cross-sectoral CSR issues based on the Disclosure Index tool, developed by the UK-based consultancy CorporateRegister.com.
Hubbard, who has worked in industry for Alcoa of Australia and Coopers and Lybrand in the UK, says the principal problem with the reports he analysed is that they cannot be compared. ‘A great deal of the information in these reports could be classified as “greenwash”,’ the paper says, because it is not measured, not aggregated or not comparable with that of other organizations.
The paper, Unsustainable reporting, suggests that ‘clear performance tables must be mandatory, showing at least two years of performance’ with fully standardized measures.
Hubbard also recommends that large companies integrate their sustainability reporting into financial reports, so that ‘sustainability reporting does make a difference to the business case of the organization’.
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