Sustainability Reporting is Becoming a More Common Practice

Since the early 1990s, there has been a trend toward greater voluntary public disclosure of corporate environmental management and performance information throughout most sectors in North America and Europe. In recent years, companies have begun to expand the scope of information they disclose to include a greater range of social and economic issues and impacts. While companies may use a range of vehicles to make this information available, a growing number are realizing benefits from publishing a hard copy or electronic report that provides detailed information on their environmental, social, and economic performance. While the issues coverage of these reports varies substantially (see Table 6.14), these reports can be broadly grouped under the heading "sustainability reports."

Internationally, sustainability reporting is becoming increasingly prevalent. At the end of 2002, a study conducted by the University of Amsterdam and KPMG estimated that close to 2000 companies worldwide were producing sustainability

TABLE 6.14. Types of Information That May be Included in a Sustainability Reporta

Environmental Performance Energy inputs

Water and material inputs

Solid wastes and hazardous wastes Effluent and spills Air emissions

Greenhouse gas emissions Land use, biodiversity, habitat and species Fines and noncompliances

Economic Performance Key financials

Investment in intellectual capital Employee compensation

Taxes and royalties Direct economic contribution Community development Customer satisfaction

Fines and noncompliances

Social Performance

Human resource management and employee relations Health and safety

Workplace diversity

Labor rights Human rights

Business ethics and integrity Indigenous peoples

Fines and noncompliances aGood quality sustainability reports provide the reader with contextual information on the company, its products and services, and its business lines and facilities. They also provide information on corporate policies, organizational structure, and management systems. While each company determines the specific issue areas to cover within its report (based on their significance to the company and its stakeholders), the following columns identify the types of issues that a number of companies are addressing in their reports.

The Netherlands ■ Germany ■ Finland ■ Norway Sweden ■ Denmark -France ■ Canada* ■ Australia.

Italy*. Belguim . Spain*. Hungary*. Slovenia*. Greece*. South Africa*.




11996 D1999 □ 2002 ' Not included in surveys 1996 and 1999

Figure 6.19. Corporate reporting by country, top 100 in 19 countries (1996, 1999, 2002). (Source: KPMG, 2002.)

reports (KPMG, 2002). That study looked at the percentage of top 100 companies by revenue that publish sustainability reports in 19 countries. Figure 6.19 illustrates the growth in reporting over the past decade in most countries.

As is the case in other sectors, a growing number of chemical companies are publishing sustainability reports. A recent benchmark survey of corporate sustainability reporting in Canada identified nine Canadian chemical companies that publish some form of sustainability report, out of a total of 100 identified companies that provide such information on their Canadian operations (Stratos, 2003).

In an effort to improve the consistency, credibility, and comparability of sustain-ability reports, the Global Reporting Initiative (GRI) has been working since 1997 to develop a set of widely-accepted principles and guidelines for sustainability reporting.35 The second version of the GRI's Sustainability Reporting Guidelines was published in 2002. By October 2004, 571 companies had informed the GRI that they used and referenced the 2002 Sustainability Reporting Guidelines in preparing their reports.36 Of these, 24 were in the chemical sector.37

Apart from stand-alone sustainability reports, many chemical companies make some information on their environmental, health and safety and social performance publicly available through other mechanisms. These mechanisms can include a combination of the following:

• Association-level reports. In many countries, it is a Responsible Care requirement that participating facilities provide key performance data to the national association, which publishes an annual Responsible Care report. These data are usually presented at the association level, and are not made publicly available at the facility level.38

• Community newsletters. The Responsible Care program requires that participating chemical facilities demonstrate that "an effective, complete and responsive community dialogue has been established." As part of this dialogue, chemical facilities are expected to communicate company performance data to key stakeholders, including employees, communities, and governments. For example, a number of chemical companies distribute community newsletters to local residents several times a year. This targeted communications mechanism helps keep local residents abreast of new developments and issues of local concern.

• Inclusion in the annual report. Some companies provide information on their sustainability goals and performance in their annual reports. In many cases, this information is limited to statements of sustainability objectives and information on environmental risks and liabilities. However, a small but growing number of

35The Global Reporting Initiative is a multistakeholder process and independent institution whose mission is to develop and disseminate globally applicable Sustainability Reporting Guidelines. The Guidelines have been informed by the active participation of representatives from companies, accountancies, investment organizations, and environmental, human rights, research and labour organizations from around the world. For more information, see

GRI website (, October 20, 2004.

37These companies are: AECI, South Africa; Agrium, Canada; AVEBE, The Netherlands; BASF AG, Germany; Cognis Deutschland GmbH & Co. KG, Germany; Dow Chemical Company, United States of America; Dow Corning Corporation, United States of America; DSM, The Netherlands; DuPont, United States of America; Hitachi Chemical, Japan; Imperial Chemical Industries, United Kingdom; Johnson Matthey, United Kingdom; Kuraray, Japan; Kyowa Hakko Group, Japan; Methanex, Canada; Mitsubishi Plastics, Japan; NOF Corporation, Japan; Potash Corporation of Saskatchewan (PotashCorp), Canada; SASOL, South Africa; Scandiflex, Sweden; Sekisui Chemical, Japan; Sumitomo 3M, Japan; T. Hasegawa, Japan; Toyo Ink, Japan.

38According to the International Council of Chemical Associations (ICCA, 2002), "each national association signed up to Responsible Care is required to make an annual progress report on implementation of the initiative. Worldwide, 28 countries have published the required codes or guidelines for implementation of Responsible Care, with 29 countries reporting a range of performance indicators such as emissions, incidents and injuries; 20 of these are making the indicators public and discussing them with interested parties."

companies are producing a single, integrated report that includes both all relevant financial disclosures as well as substantive information on the company's sustain-ability performance. The most fully integrated of these reports are premised on a vision that links corporate sustainability with ongoing financial success.

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