In preparation for a carbon-constrained future, companies in the “Misfortune 500” are clamouring to green their image. Australia’s top polluters, comprised mainly of energy providers, have also become the country’s top sustainability reporters.
Composed by public relations experts and designed by marketing professionals, each energy provider’s sustainability report attempts to transform their corporate image from polluter to renewable energy advocate.
Corporate websites, annual reports, even blogs, have become carefully crafted pieces of eco-art, littered with persuasive text, high-definition photography and technicolour designs all aimed to convey a corporate commitment to environmental sustainability.
However, with no laws dictating the content and format of sustainability reports, readers need to be wary of “greenwashing”, deceptive marketing techniques to falsely claim environmental responsibility to establish a green corporate reputation.
Energy providers Macquarie Generation, Delta Electricity, Great Energy Alliance Corporation and CS Energy make up four of Australia’s top five carbon emitters. With the exception of Great Energy Alliance, each of these corporations publish a comprehensive sustainability report that outlines their sustainability “goals” and provides carbon statistics. None of these companies have drastically reduced their emissions.
Dr Damien Giurco, director of research at the University of Technology Sydney’s Institute for Sustainable Futures explains there is an increasing concern about companies producing sustainability reports to underpin their renewable efforts.
“Reporting statistics doesn’t make you a sustainable company,” Giurco said. “Companies need to look at what they’re doing now, not publish their vision of what they might do in the future.”
Yet prospective visions and anticipated goals occupy the majority of current sustainability reporting. “Companies try to link in with the global reporting initiatives, but this framework needs to evolve and become stronger,” said Giurco. “Companies need to ensure that the glossy pictures are followed by their actions. They need to demonstrate how they are reducing emissions. They need to show the link between long-term shareholder value and value to the community.”
Even so, community values are hard to uphold when the structure of sustainability reporting remains questionable. In fact, there are no laws dictating the content or format of sustainability reports. In almost all jurisdictions sustainability reporting remains voluntary.
“I’d like to see a uniform format enforced,” said Giurco. “Ensuring trends can be tracked over time is really important and it will demonstrate where companies operate in an ethical and responsible supply chain.”
Guidelines published by the Global Reporting Initiative have attempted to create a framework for sustainability reporting by providing companies with recommendations and applications. However, these guidelines are not legally enforced and can be interpreted and used by companies as they see fit.
Guidelines mandate companies to define content through the use of materiality, stakeholder inclusiveness, sustainability context, etc. The GRI then distinguishes quality through the report’s balance, comparability, accuracy, timeliness, reliability and clarity.
Additionally, there is no third-party verification of information, leaving companies free to print embellished or biased data. Without the assurance that these reports contain absolute truth, corporate integrity and credibility comes into question.
Macquarie Generation, Australia’s top carbon polluter, published environmental policies that contradict the scale of their emissions. According to Macquarie Generation’s website: “Minimising environmental impacts, preventing pollution, using resources efficiently and improving waste management are our priorities.”
Macquarie emitted over 20 million tonnes of carbon in 2011 alone. Yet, its environmental policy conveys an image of sustainable dedication. Macquarie could not be reached for comment.
Aside from a lack of consistency and accuracy, others contend the language used in sustainability reporting is intentionally ambiguous. “Sustainability reports are hard to understand,” Giurco told Crikey. “When you’re reading them, you can get to the point where you get so much information that you can’t understand anything. It’s so hard for anyone to scrutinise a report that they can’t understand the meaning of.”The complexity of sustainability reporting has prompted some companies to look for new ways to green their image. Tim Nelon, the head of economics, policy and sustainability for the Australia Gas Light Company, thinks his corporation has found a solution to technical sustainability reporting.
“We’ve moved to an AGL sustainability blog,” Nelson explained. “It’s more of a casual, active feedback process and it’s very user friendly. It’s information in real time that customers have immediate access to.”
AGL’s blog translates the company’s traditional sustainability report into a language more understandable to the general public and currently has over 40,000 hits. Customers are able to interact directly with company representatives, with other customers or read through any of AGL’s three approaches for measuring and communicating their environmental impact.
In addition to being the largest privately-owned electricity company in Australia, AGL leads the country in renewable energy development and generation. Even so, AGL still ranks 47th on the Misfortune 500 list with 1.5 million tonnes of carbon emitted in 2011.
Yet, according to Nelson, AGL reveals all corporate statistics related to carbon emissions and the environment as a way to promote company transparency.
“It’s important that we communicate our dedication to sustainable developments,” he said. “Our equity imprint may be high, but we have the biggest renewable energy imprint and we keep increasing the capacity to lower our emissions profile.”
Some believe a legally recognised framework will one day regulate sustainability reports, dictating a uniform measurement for social development and environmental performance and promoting a green future.
Until then, it’s up to the consumer to read between the lines, and Giurco advises disregarding corporate greenwashing. “Sustainability reports are like the fine print on a credit card, by design they’re meant to be ignored,” he said.