How companies paint a bigger picture
Companies struggling to report more than their finances might not be working towards long-term goals on a daily basis, a sustainable reporting expert says.
New recommendations for companies listed on the New Zealand stock exchange come into effect in October and ask them to report on environmental, social and corporate governance matters.
But Deloitte audit partner Jackie Robertson said it was everyday activities that really made the difference.
‘‘A report should reflect what it is [companies are] doing on a dayto-day basis,’’ she said. ‘‘And if they’re finding it difficult to write the report that’s normally because they’re struggling to articulate something that doesn’t actually exist in the business.’’
She has worked with six firms to create a more integrated approach to sustainability reporting, usually through the frameworks of the Global Reporting Initiative (GRC) and International Integrated Reporting Council (IIRC).
NZX head of policy Hamish Macdonald said the reporting change was a response to investor feedback that companies should be more transparent.
It will be the first change to corporate governance practice disclosure rules since 2003.
Macdonald said companies with more overseas investors may roll out reports on their sustainable practice sooner.
‘‘If they have overseas investors expecting this kind of disclosure that may have influenced them to move a bit faster than others.’’
OCS, New Zealand’s largest commercial cleaning and property maintenance company, is the first in its sector to have released a sustainability report to the public.
General manager Gareth Marriott said it would serve as a ‘‘public benchmark’’ for reports to come. He expects to publish the next report in 18 months.
OCS would invest about $400,000 in social and environmental sustainability this year, Marriott said.
‘‘It means we’ve invested in the business and we’re not looking at savings; we’re looking at a unique selling proposition.’’
The report emphasised the company’s commitment to minimising its environmental impact. OCS planned to purchase hybrid vehicles, roll out charging stations at its branches, and reduce its carbon emissions and use of chemicals and water.
The multinational company employs 87,000 workers worldwide and more than 4000 in New Zealand. Some of the facilities OCS cleans include Auckland Airport, police stations, Air New Zealand, Victoria University and Westfield shopping centres.
University of Auckland researcher Caroline Bridges said non-financial disclosures were often easy to spin, which was a threat to legitimate sustainability reporting.
‘‘The guidelines really have to ask: Is this a holistic approach or are you just focusing on one area of what you’re doing? And sometimes it’s difficult to tell.’’
Bridges said Australia and New Zealand have a ‘‘very low’’ standard on reporting wastewater and chemical usage and sustainability disclosures were less developed in general compared with Europe and the United States.
But strict protocols were not necessarily the answer, because they did not show companies were thinking deeply about the issue, she said.
Bridges said standards should vary on an industry-by-industry basis, to focus on where each industry is most vulnerable to unsustainable practice. However, transparency should be be the norm, she said.