Aligning Sustainability Reporting Between the Public and Private Sectors
Here’s the good news: sustainability reporting is now widespread in both the public and private sectors. Stakeholders currently have more information on the economic, environmental, and social performance of governments, public agencies, and corporations than ever before.
However, this information is often reported inconsistently and is almost entirely self-referential. Links between public and private sector reports are limited. Yet only through cohesive reporting from both sectors can we get a clear picture of overall global sustainability performance.
Unfortunately, efforts to better align public and private sector reporting are complicated by a number of factors, including differences in the content and structure of the reports. Private sector reports often vary widely on the types of goals and indicators disclosed, even in the same industry. Public sector reporting is so mixed that it is often difficult to predict what the report will contain prior to opening it.
Even in cases where there is overlap in the issues reported, there are often differences in the approach. For example, two municipalities might report on the same indicator, say greenhouse gas emissions; but they may do so in very different ways that aren’t readily identifiable. Moreover, these inconsistencies can be even more pronounced when comparing reports between public and private sector entities. This points to the need for a common reference point that orients public and private sector sustainability reporting in the same direction.
The UN Sustainable Development Goals (SDGs), which represent an “unprecedented political consensus” on sustainability priorities, offer such a reference. They are primarily targeted to the public sector and provide a starting point in standardizing the incredible range of reporting at the national-, regional-, and public agency-level. They also provide a basis for improving linkages between public and private sector reports, particularly given that many companies are already reporting on some aspects of the SDGs.
No one entity can adequately report on all of the 17 goals and 169 targets associated with the SDGs. Collectively, however, the public and private sector can ensure that all are addressed. A framework, consisting of a mix of prescriptive and non-prescriptive guidance, will be needed to drive improved alignment in reporting. Reporters must retain some discretion in determining which goals and targets are appropriate in light of their local circumstances. However, once these have been decided, definitions, boundaries, analytical techniques, and reporting methods must be standardized.
Standardizing key elements of sustainability reporting across the public and private sectors is undoubtedly difficult. A recent briefing note from our Knowledge Program showed that there are considerable discrepancies between what the Canadian province of Manitoba is reporting on sustainable development and the green economy, versus the targets and proposed indicators for the SDGs.
There are, however, some encouraging recent efforts at the corporate level to align reporting with the priorities expressed within the SDGs. Measure What Matters is a project devoted to “bring greater alignment between corporate, national and global actors as to how to better measure progress” in ways broader than profit alone. The Data Revolution Group is working on recommendations to the UN “to close data gaps and to strengthen national statistical capacities” around monitoring the SDGs. And the SDG Compass provides a list of over 800 business indicators mapped against the SDGs.
If the challenges of standardizing reporting practices can be overcome, improved linkages between public and private sector reporting can be facilitated through widely-accessible cloud-based reporting platforms. For example, a state-level government could use company data entered into the platform as a part of its reporting initiatives. Similarly, companies could make reference to global or regional trends to better situate their performance in the broader sustainability context. This would provide a much stronger basis for sustainability performance assessment and reporting than currently exists.
Collaboration between the public and private sectors is essential for us to get an accurate picture of overall global sustainability performance. There will never be perfect alignment, as different entities need to address different things. The public and private sectors are deeply connected, but their mutual influence and dependence is largely unacknowledged in sustainability reporting. The existing reporting landscape is so deeply fragmented that it is currently impossible to use data from one report in the development of another with any degree of confidence. This must change in order to accelerate improved sustainability reporting and, ultimately, improved sustainability performance at the organizational-, regional-, and global-levels.
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