Developing Ideas Digest May/June 1998
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LitScan TrendWatch

Trend Watch

Sustainability Reports

It's commonplace for corporations to issue environmental reports alongside their annual reports, or to include environmental impact data as part of their yearly reporting to shareholders. But now a handful of companies have moved beyond that by producing 'sustainability reports' - documents outlining a vision of where the corporation wants to be situated on the natural and social landscapes, and detailing what progress has been made getting there.

A trailblazer in this field is the Interface carpet company, whose premiere report has an arresting yellow cover made partly from banana fibers. The opening report by Interface chairman Ray Anderson (who also serves as co-chair of the US President's Council on Sustainable Development) tells of his 'epiphany' after reading Paul Hawken's book The Ecology of Commerce -- not exactly the kind of language you'd expect from a hard-nosed boardroom warrior. But there again, part of the character of 'a sustainability report' is that executives can shuck some of the reliance on hard data and get 'touchy-feely'. As a similar report from The Body Shop asserts: "business will need a broader and more holistic set of values... if it is to make a genuine commitment to sustainable development."

The Interface report is a mix of cold fact (for instance, what quantity of resources does the company use today?) and subjective declarations such as "what we call the next industrial revolution is a momentous shift in how we see the world." It outlines how Interface plans to eliminate all waste in its production process (taking, instead, a cyclical approach to resources that go in and waste that goes out); eliminate toxic emissions; switch to renewable energy; adopt closed-loop production systems; use efficient transportation; and adopt a social sensitive approach to international operations. If those sound like Utopian goals, consider how Interface's profits have quadrupled since taking the sustainable approach. For example, a new carpet containing 15 -20% less materials, means "we've actually made a product that reduces [waste] and performs better, and is therefore selling more aggressively at a higher margin than its predecessors," Interface's Dr. Michael Bertolucci told DI.

Many questions are being raised about what makes a sustainability report different from an environmental report. Steve Barg, a senior advisor at IISD, has been tracking corporate environmental reports in Canada since the early 1990s. According to Barg there has been an increase in reporting on sustainability indicators such as the impact of a company's production methods and products on the global environment and corporate initiatives in global development. Sustainability reporting, however, is in its infancy. Barg asserts that "a sustainability report should provide an integrated discussion of the financial and economic situation of the corporation that includes environmental impacts, safety and health and community and human impact."

Look for an increase in the number of sustainability reports as companies tackle sustainable development and search for ways to win public approval and relate activities to the bottom line. Doug Fraser, vice-president with mining company Placer Dome, says companies should be serious about sustainability because public acceptance is key to profit. "By committing to sustainability," he told DI, "we believe that we are going to be welcome in communities and countries that we want to do business in."