Green reporting on the rise, but struggling for mainstream adoption

The number of businesses reporting publicly on their sustainability performance hit a record high last year, but environmental reporting still remains a long way from the mainstream and will require greater government support if it is to become the norm for listed firms.

That is the view of the Global Reporting Initiative (GRI), the Amsterdam-based group responsible for the widely adopted G3 sustainable reporting guidelines, which last week released figures showing that the number of companies following its guidelines to publicly disclosing information on their environmental performance rose by at least 46 per cent in 2008 to over 1,000 firms.

However, the group also reported that while the standardised guidelines were becoming increasingly popular those companies producing sustainability reports remain in the minority. Its figures show that only 48 per cent of France's CAC 40 listed firms, 22 per cent of the UK's FTSE 100, and 13 per cent of the US' S &P 500 produced reports in line with the G3 guidance.

GRI chief executive Ernst Ligteringen said the failure of many firms to embrace sustainability reporting represented a major problem for both investors and wider efforts to tackle climate change.

"If sustainability data was just something that was "nice to know" about a company - providing niche investors with data for short-term investment decisions or helping employees feel good about their company - then this wouldn't be so much of a problem," he said. "However this information is more important than that. As we face a sustainability crisis that could ultimately even threaten our very existence as a species, we need to know how our companies are positioned to rise to the challenges, provide solutions and adapt to coming changes."

The refusal of many firms to produce sustainability reports prompted a change in tactics at the GRI earlier this year that saw the group formally call on government's to introduce policies requiring firms to provide information on their environmental performance.

The so-called Amsterdam Declaration urged governments to introduce policies that would oblige firms to publicly disclose details of their sustainability performance or explain why they have refused to do so.

A spokesman for the group said its recently-formed Government Advisory Group was currently working with a number of different governments, including representatives from Sweden, Norway, Denmark, Australia and the European Parliament, to develop best practices and guidance on how government's should impose reporting requirements on businesses.