Sustainability Reporting Guideline Mapping & Gap Analyses June 2011
Worldwide upward trend in sustainability reporting
In recent years the number of companies releasing sustainability reports has continued toincrease on a global level as well as in China specifically. According to KPMG, in 2008, 79%of global 250 companies published sustainability reports
. In China, the number of sustainability reports reached over 700 in 2010.
There is a widely established expectation that companies wanting to obtain a leadershipposition and become competitive in the global marketplace need to effectively manage theirenvironmental and social performance, disclosing challenges and achievements in asustainability report. Moreover, corporate product and service innovation should aim tocontribute to society’s well-being. Studies show that in China, however, most companiesrelease sustainability reports for reasons of reputation and development of governmentrelationships, not fully taking advantage of opportunities for risk management and investorrelations.
Improved report quality is required to meet stakeholder demands
There is general agreement that the quality of sustainability reports released in China needsfurther improvement. Stakeholders feel that current report content does not meet their needs, asmany companies lack in provision of fairly balanced and material information.On a global level, early demands for sustainability reporting came largely from civil societyand special interest groups. A number of governments and regulators have subsequentlydeveloped sustainability reporting guidelines and are the key forces driving the development of sustainability reporting as a matter of corporate responsibility and good governance.More recently, mainstream investors have begun to take note of the tangible impact of sustainability on the bottom line and are seeing potential to include environmental and socialassessments in their investment analysis. A 2009 study by IFC and BSR also found that a smallnumber of market pioneers and innovators in different segments of the Chinese capital markethave started to explore ways to integrate ESG (i.e. environmental social and governance issues)factors into their investments.
There are still significant gaps, however, in terms of
information on company performance for investors to be able tomake informed decisions about current and future performance. It is therefore unsurprising that
International Survey of Corporate Responsibility Reporting
Statistics by China Sustainability Report Resources Center,http://www.sustainabilityreport.cn/
Sustainable Investment in China