S. Africa: Companies urged to stop pretending they have everything covered on sustainability issues
‘TRACEY DAVIES: More balance, less boasting’ 8 July 2021
Reading corporate reports has always been a somewhat soul-destroying business. But the pressure on companies to demonstrate their environmental, social and governance (ESG) credentials is giving rise to longer and increasingly fragmented corporate disclosures that fail to provide a balanced account of impacts, and which are saturated in self-congratulatory platitudes. The key to integrated reporting, for which SA is supposedly famed, is surely in the name. "Integrated" means "with various parts or aspects linked or co-ordinated". Its synonyms include "consolidated", "merged", "fused" and "coherent".
… Every company rates itself as having managed the pandemic in an "exemplary fashion", being "absolutely committed to tackling climate change" and "caring deeply about inequality", among many other highly impressive claims that are often quite obviously not the whole story. But misrepresentations don’t seem to be challenged very often by the armies of ESG analysts that most asset managers tell you they employ. Whenever Just Share points out a serious misrepresentation in a company’s reports, it is clear from the response that we are the first to do so.
… Of course companies should be able to showcase the value they create and the good they do. But the focus on ESG has escalated dramatically because of the negative impact of our economic system on people and the environment. The purpose of integrated reporting is to help stakeholders understand both sides of the story. If companies pretend they’ve already got everything covered, we will never be able to create the kind of sustainable future they all say they care so much about.