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Why don't sustainability reports talk about sustainability?
01/02/2007

'At one of our regular internal csrnetwork Think Tanks, we were inspired by 'The 10 things that will set the future agenda for the World' presented at the Conference Board in New York recently by Jane Nelson (IBLF and Harvard Business School)'.

There was one theme, however, that seemed to unite most - possibly all - of the issues in this list: it really struck me that a large number of Jane's Top 10 converged around the broad issue of 'Security'. Over the last three years, security issues have dominated our headlines and our underlying sense of well being has been undermined. We have entered a new age where Global Terrorism poses a real threat - not only to individual lives caught up in the latest atrocity, but also in the profound effect that these events have on our economy, generally, and certain businesses, specifically. We only have to look at the impact of 9/11 on the aviation sector to see a profound example. But there are many others.

From my perspective, at least, it is hard to deny that the roots of terrorism are derived in part from three of Jane's issues: Patriotism, Global Poverty and Global Diversity & Multiculturalism. In the world of the Internet and CNN, it is all too easy for those who have little power or wealth to see how we live our lives in the west. In a world with only one super-power, that seems intent on exercising its military muscle to protect its 'values', we should expect the next ten years to be dominated by terrorism and declining global security.

As our conversation developed during our Think Tank session, the following question started to form. 'If these fundamental issues have such a profound effect on business and to the long term sustainability of the global economy, why aren't they being discussed in companies' Sustainability reports?'

As another example, we work closely with many leading players in the energy sector. No surprises that their focus on the security of long-term energy supply has increased in recent years. It will not be long before the UK, for example, will be largely dependent on gas imported via pipelines from Northern Russia. How confident can we be that these routes will remain secure? If the worst happened, how would we respond? And if these are current issues in the boardrooms of our major energy companies, what is the view of the rest of industry that is dependent on continuity of supply for 'business as usual'?

And yet, most sustainability reports are silent on these issues. Why is this?

We opened up our enquiry further by thinking about the other 'big issues'. For example, Jane's number 2 issue was 'Changing demography'.

In the West we are approaching the first time when a shrinking young population will be shouldered with the responsibility of supporting a larger, older one. At the same time, the issue of 'where' jobs should be located and 'who' should do them is gaining a renewed momentum.

As I queued to get through immigration at Newark airport on our way to the Conference Board event, I was confronted by U.S. news coverage on the 'breaking issue' of 'outsourcing'. In this context, it meant relocation of professional service jobs from the U.S. to India, on the grounds of cost cutting.

It seems that we will be dependent on increased use of immigrant labour to do low income jobs in the West. Conversely more and more, 'higher' income jobs will be exported. Again, these issues go to the heart of the 'sustainable development' or 'corporate social responsibility' debate and yet there is virtually no discussion in company Sustainability Reports.

On the issue of demography, the best we get is rather empty data about employee diversity, with little constructive conversation about what this data means and how the reporting companies will respond.

Reflecting on the significant contribution that the Global Reporting Initiative has made to a global consensus on what reports should cover. I wonder whether the debate has become hi-jacked?

There has been wide criticism of the indicators that have been proposed on social and economic issues. In Japan, for example, where there is a very wide adoption of the GRI indicators by the corporate sector, we have been told that there is a basic discomfort with disclosure of 'social' data.

We hear corporate reporters complaining about the requirement, under GRI, to disclose performance in the area of 'forced labour' that this is a folly of political correctness. 'Of course we don't use forced labour! ' And yet it was only last month that nearly 30 Chinese immigrants, allegedly controlled by gang-masters, had drowned while picking shellfish on the coast of England. It seems to us that Jane Nelson's list was a macro-level of what is 'material'.

For me at least, it was a wake up call. Those few companies that have responded well are not yet producing reports that really address the real problems of the world.

I have spoken about these issues to a number of clients. I asked one group of senior managers in a global Scandinavian company whether they believed Security or Global Poverty was a relevant sustainability issue for them - the answer was a resounding 'yes'

It seems to me that we need a safe space for a fundamental review of corporate activity in the field of sustainability - and what gets covered in those glossy reports.