The Current Problems with Sustainability Reporting

• What is Sustainable Development?
• What problems currently face Sustainability Reporting?

Current Challenges

As sustainability has become more popular, there is an increasing number of ways to measure sustainability.  Sustainability is a term lacking a concrete definition so numerous organizations have come up with their own ways to quantify it. Each of these organizations has developed tools to weigh factors uniquely and sometimes they even use different variables altogether. Some sustainability reports focus more on industry impact whereas others are geared towards the individual consumer. This is problematic because a wide array of options becomes confusing when investors are being given different results and rankings. Who should you listen to?

Missing Data

When measuring sustainability, a lot of data is missing. Many regulatory bodies mandate the reporting of financial and ethical practices. Unfortunately, a lot of ESG data doesn’t fall under this umbrella. ESG stands for environmental, social, and corporate governance. Therefore, many companies can’t be accurately assessed because their ESG data is private.

Inconsistent Data

The third main problem with sustainability reporting is that data is taken in an inconsistent manner. All indexes that generate sustainability rankings ask for different things. This hinders the ability for there to be a single sustainability marker using data available on all companies analyzed. In addition, a lot of data tends to be biased. Ideally, independent organizations would conduct their own research to gather investigative data. Unfortunately, this isn’t feasible most of the time. This means that many companies self-report their figures which leaves a lot of room for skewed data to go unnoticed.

Here at Physis, we aim to make it easy for you to make an impact and even easier for you to see the change you’re making. Join us at Physis to be a  part of the change you want to see!

References:

The Current State of Sustainability Reporting