How Much Trust Can We Put on Sustainability Reporting?

Today, with the effort of improving transparency and accountability, many companies make it their business to include reports about their performance of their sustainability initiatives in their annual reports. However, Sustainability Reports have often been categorized as intangible and unable to be measured, the fact remains that they are having an increasingly significant effect on company’s value. It has provided good reputation for the company but some take advantage of it because of the variation across companies, countries and issue areas to be covered in the sustainability reports. So, it opens doors to omission of some issues and putting more stress on the ones that can help the company to green-wash its image.

I think that the absence of a standardized sustainability reporting format and strong regulating bodies (independent external auditors, NGOs and or government) it becomes harder to trust what is being reported and what is actually being done. Like the recent VW scandal which has helped investors and customers become more skeptical about sustainability reports.

According to its Sustainable Value Enhancement, VW group states:

 “We run the business responsibly and with a long term perspective along the entire value chain. Everyone should benefit from this-our customers, our employees, the environment and society.”

I wonder how much of this value has been affected by the false sustainability reporting. Will it be the end of VW’s image? How will they fix this problem?