Overselling Sustainability Reporting

"It turns out that reporting is not a proxy for progress."

Ken Pucker ponders in his article Overselling Sustainability Reporting the extent to which reporting could shift from being only financially motivated to actually causing real, measurable changes in the environment and society.

He observes studies have found little difference between the holdings of sustainable and traditional investment funds, as their obsession still lies in maximizing returns for shareholders.

ESG reporting may in fact distract from the need for changes in mindsets and behaviour, which is why he suggests a more « aggressive approach » to reporting:

• Measure less, better: current frameworks are confusing and burdensome for companies, more streamlined, science-based, and audited ones should be made mandatory.
• Mobilize: grassroot movements, fostered by growing awareness, can drive progress towards more sustainability against the advocates of growth and business as usual.
• Spend government funds on the right things: government resources should be spent on R&D for carbon capture, building retrofits, and renewable energy infrastructure instead of using taxpayer money to subsidize fossil fuel.
• Change the system: governments need to alter the rules to change corporate and investor behaviour. Instead of letting corporations influence regulations in critical fields such as energy, building, transportation and agriculture.

Going forward, corporate leaders must advocate for changes that allow them to prioritize long-term stability and prosperity over short-term gains, and address pressing issues such as environmental degradation, biodiversity loss, income inequality, and climate change.