22 Jan FTSE100 sustainability reporting under fire – Oxford Brookes University study

A substantial number of FTSE100 companies are selectively choosing data that emphasises certain outcomes or ignores major impacts in their sustainability reporting, according to a new study conducted by Oxford Brookes University.

The report, titled ‘The Boundary of Sustainability Reporting: Evidence from the FTSE100’, has been published in the Accounting, Auditing and Accountability Journal, and examines reporting boundaries adopted by FTSE100 companies for 49 Global Reporting Initiative (GRI) disclosure topics.

Its findings reveal that much of the current output is focused on responding to potential risks to companies’ reputations, rather than acknowledging responsibility for their actions.

Dr Samantha Miles, Reader in Accounting and Finance at Oxford Brookes University, and the project lead, explains:

“This report offers a worrying picture of many companies’ sustainability reporting, much of which appears to be a promotional exercise rather than a genuine effort to address stakeholder concerns.

“The Oxford Brookes team found that 72% of FTSE100 sustainability reports adopted very narrow reporting boundaries, restricting the scope of responsibility or using illustrative examples to suggest wider compliance, while in reality providing information that could be described as ‘greenwashing’.

“Other companies – 26% of the FTSE100 – widened the boundary of their sustainability reporting to include impacts derived from operations they ‘owned, controlled or significantly influenced’. However this ignores activities outside of the consolidated group.”

Dr Kate Ringham, a researcher for the project, added:

“If left unchallenged this form of sustainability reporting, which appears to be designed to satisfy shareholder and creditor needs, will become the accepted norm and companies will not be accountable to a wider range of stakeholders.”