Advancing Sustainability Reporting in Canada

Analysis[According to Stakeholder Research Associates, “Sustainability Reporting has plateaued, possibly from GRI fatigue, and yet in our conversations with reporters, we’ve learned that companies increasingly see the need for and value of ESG disclosure.” This topic and other trends will be explored at the Canadian Sustainability Reporting Symposiums taking place this fall across Canada – Toronto (September 22), Calgary (October 6) and Vancouver (October 7). Use the discount code TSSS to recieve a 10% discount.]

Two years ago Stakeholder Research Associates (SRA) conducted a study into the state of sustainability reporting in Canada. At that time we found that 42%, or fewer than half of Canadian companies listed on the TSX Composite Index publicly disclosed environmental, social and governance (ESG) information. We recently repeated our research and found that, in 2016, 56% of companies listed on the Index provided some form of ESG disclosure, an increase of 14% compared to 2014. Our research also showed an increase in the number of companies that included ESG information in their annual reports – 55% in 2016 compared to 52% in 2014.

…while the number of companies providing ESG information increased over two years, reporting quality did not.

At first glance this appears to be a positive trend. However, our review suggests that while the number of companies providing ESG information increased over two years, reporting quality did not. Certainly a number of Canadian companies continue to demonstrate best practices, among them, Teck, Telus, Bombardier, TD for example. But many listed companies short change investors and other stakeholders, offering woefully inadequate public disclosure, providing but a few web pages on a handful of topics that fail to tell a cohesive and complete story of the company’s ESG impacts, let alone progress toward measured reduction of those impacts.

It’s not clear the cause of this drop. It could be the result of ‘GRI fatigue’…

Interestingly, we also observed a decrease in the number of companies using the Global Reporting Initiative (GRI) guidelines, with 50% referencing the GRI in 2016, down from 71% two years prior. It’s not clear the cause of this drop. It could be the result of ‘GRI fatigue’ following the release of the GRI G4 Guidelines in 2013, which asked reporters to up their ‘materiality’ approach while resetting report goal posts -a fatigue that may well be compounded by the release of new GRI Standards later this year. Another view suggests that listed companies increasingly are understanding the need for and value of ESG disclosure to investors and other stakeholders, and are only now taking first tentative steps on their disclosure journey. Just as it did for Canadian reporters 20 years ago, it is our hope that comprehensive, guidance-based, value-creating reporting framework will follow for this new wave of reporters.

 

…there is an appetite for a re-energized community and a desire to realize the full value of ESG disclosure.

sraWhat we know is that sustainability reporting in Canada has plateaued. Yet, our conversations with reporters tell us that there is an appetite for a re-energized community and a desire to realize the full value of ESG disclosure. To deepen and broaden those conversations, we invite reporters to join their peers at the Canadian Sustainability Reporting Symposiums taking place this fall – in Toronto on September 22, in Calgary on October 6 and Vancouver on October 7.

TSSS community members receive a 10% registration discount with code: TSSS

For more information and to register with the TSSS community discount, visit us here. OR email Kathrin Bohr or Katharine Partridge.