1.3.2 Conclusion

The first chapter provides an overview of the state of the art of sustainability reporting and the potential development of sustainability reporting. It introduced the main organizations and initiatives responsible for developing sustainability reporting and presented the general EU regulatory and non-regulatory landscape. Looking at this overview it is possible to see the growing trend of sustainability reporting best practices and higher commitment from the public and private sectors. In 2011, only around 20% of companies in the S&P 500 Index published reports. This percentage rose dramatically in 2015, when 81% of companies in the S&P 500 Index was reporting. From 2015 to 2018, the percentage of reporting companies rose from 81% to 86% (Governance & Accountability Institute, Inc. (G&A), 2018).1 According to KPMG, in 2015, the rate of reporting on corporate responsibility among the largest 100 companies (N100) is 71%; among the G250, 92% of the companies report on corporate responsibility.2 In 2017, 75% of the N100 companies report on corporate responsibility and 93% of the G250 companies report on corporate responsibility.3 This shows the growing commitment of these companies and their governments to sustainability reporting which are expected to expand and deepen their initiatives in the future. Most importantly, KPMG reports that regulation is the main driver for sustainability reporting and that mandatory regulation is growing globally.4

Moreover, this chapter explained the reasoning behind the choice of the four countries, Brazil, Sweden, the Netherlands and the US, as the focus countries of this research. These countries represent a sample of how sustainability reporting is developing and show these countries’ potential impact to the uptake of sustainability reporting best practices globally.5

This review of the state of the art of sustainability reporting allows for drawing five main conclusions. First, there is still no global accepted voluntary or mandatory set of principles for sustainability reporting. Instead, there are many different guidelines and standards, which have been used in an ad-hoc manner. Accordingly to GRI, this presents a challenge: “how to effectively deal with the continuous complexity of evolving global standards to avoid a decline in popularity for sustainability reporting.”6Second, there are few but very relevant examples of mandatory approaches to sustainability reporting in Denmark, France, Sweden and the Netherlands. Third, the voluntary initiatives, among others, of the GRI, UNPRI, IIRC, OECD and ISO are gaining more acceptances and impact globally. KPMG reported in their International Survey of Corporate Responsibility Reporting of 2015 that 60% of the 43 countries surveyed used the GRI guidelines, 74% of the G250 used the GRI guidelines in comparison to 81% in 2013.78In 2017, the percentage has rose to 75% in the G250 companies.9The GRI Guidelines have been the leading sustainability reporting framework used.10Fourth, third party assurance on sustainability reports is also growing. Accordingly to the KPMG survey of 2015, formal third party assurance of the G250 reports increased from 59% to 63% from 2013 to 2015. In 2017, this percentage rose to 67% among the G250 companies.11 KPMG also refers that in the N100 reports third party assurance increased from 38% in 2013 to 42% in 2015.12 In 2017, this percentage rose only to 45%.13KPMG’s data suggested that assurance rate tend to increase most rapidly in countries where reporting has also increased, such as in the US.14 The ISAE 3000 and the AA1000AS are the most used assurance standards by companies, and accordingly to GRI the global trend is the development of more national and international assurance standards.15Fifth, I agree with John Elkington,16 when he discusses the shift in corporate sustainability from “push” to “pull” reporting. There is currently a transition from a “push” Era, where businesses told the outside world what they wanted them to know; to a “pull” Era, where are the stakeholders asking from companies what they need to know concerning not only their economic performance but also their environmental, social and governance impacts.17 As Mintzberg (1983) once said “social responsibility is not telling society what is good for society but responding to what society tells the firm the society wants and expects from it.”18

Chapter 2 explores and analyzes the lessons we can learn from the development of international financial accounting standards for the development of sustainability reporting.19

Below follows a table with the 14 structural indicators:20