Reporting on corporate sustainability progress across continents and markets has never been plain sailing. But, hopes that common sense would prevail and consistent approaches would emerge have been dashed.
As Reuters reported this week, “rollbacks on sustainability in the EU and US have once again sent reporting in opposite directions”. Efforts to even out international kinks in what gets reported, and how, have effectively stalled. If anything, the requirements for corporate communications teams developing reports have become even more complex.
Faced with contradictory and conflicting “alphabet soup” from regulators that make reporting harder, (and laced with uncertainty), the vast majority of companies are taking the high road and continuing to maintain or improve reporting practices accordingly, the piece outlines.
Despite 90% of firms no longer being mandated to report progress on sustainability measures under European Union directives, most are choosing to do so regardless, and many of them are actually escalating their efforts.
Reporting requirements have been in effect on most continents and larger national markets for a couple of years or more, but they also continue to shift and evolve. The EU’s flagship Corporate Sustainability Reporting Directive (CSRD) has itself widened scope, even if it has broadly watered down its stipulations. This handy explainer of where things currently stand was published this week.
Watered down and overcomplicated
The direction of travel is pretty clear: regulators and compliance bodies around the world are continuing to both water down and typically overcomplicate the demands they place on companies. Yet, most firms have realised the broader commercial benefits of reporting and related action anyway. Regardless of the complicated soup around what they are obliged to do, most are going over and above the rules, publishing compliant reports and benefitting from doing so.
This can bring an undue cost burden though, as firms grapple with how best to sustain practices and data collation methods. This will also impact how best to maintain an understanding as to what level of detail is required to deliver broader benefits.
For corporate communications teams the back and forth over what is compulsory, how to cover all of the ground across borders, and how to take a highest common denominator approach, must be exhausting and frustrating.
But with no end in sight to the shift in compulsory reporting burdens and the forces that shape them, companies seem to be rising above compliance. It’s the payback from the practice of disciplined sustainable change that matters most, rather than ticking the right boxes with the authorities that demand the detail.