Sustainability reports should be independent

Communications agency Black Sun says the majority of assurances are conducted by specialist environmental consultancies with only 13% done by an accountancy firm.

In the Closing the gap report it points to the fact that only 8% of annual reports are independently assured for the sustainability aspect.

‘If they have gained independent assurances for their corporate social responsibility report then they should do so as a whole. There is a lot of PR spin in annual reports and it gives this section more credibility if it is assured externally,’ said Sallie Cooke Pilot, head of corporate reporting at Black Sun.

She said that while nearly two thirds of companies gained independent assurances for corporate social responsibility reports, they were often written by different people than those producing the annual report.

‘CSR reports are often done by different parts of the business. It’s often not integral to the rest of the business. When you see these things being more integral then it leads to believing the company takes it more seriously,’ she said.

The study was also critical of the disparity in opening statements in the annual report and the CSR report. ‘Rarely is there consistency in terms of sustainability themes or issues, making it difficult to discern a clear standpoint if both reports are read in conjunction with one another,’ said the study.

CSR reports were criticised for failing to identify the contribution of sustainability in relation to the overall business strategy. Less than a quarter of them included this with just 13% of annual reports doing so.

‘For a holistic picture of the business to be conveyed it is imperative that sustainability is aligned to strategy at every relevant juncture. This helps to reassure stakeholder groups that non-financial concerns hold a prevalent position in relation to strategic objectives,’ the study said.