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New CGA-Canada Report Reveals Inconsistencies in Canadian Sustainability Reporting Practices
New CGA-Canada Report Reveals Inconsistencies in Canadian Sustainability Reporting Practices
Published 06-07-05
Submitted by CGA-Canada
The report, Measuring Up: A Study on Corporate Sustainability Reporting in Canada, includes insights from a new CGA-Canada survey of publicly-traded companies and shows that among organizations with a comprehensive sustainability reporting program, nearly one-third (31.4%) cite lack of credibility of sustainability reports as the biggest issue.
"There is a widely recognized global movement towards sustainability reporting," said Rock Lefebvre, CGA-Canada's Vice-President, Research and Standards. "But Canadian companies are relatively new to the game. We're nowhere close to the point where Canadians can expect mandatory reporting guidelines." Lefebvre explains that implementation of globally-accepted guidelines such as those provided by the Global Reporting Initiative (GRI), together with third-party assurance will go far in addressing credibility concerns. But he adds that Canada isn't ready for mandatory reporting standards at this time.
Canada lags behind the U.K. and U.S. in sustainability reporting development, although CGA-Canada's analysis shows that corporate sustainability reporting is growing in Canada. In fact, just over a decade ago, less than 1% of large Canadian corporations were committed to reporting on environmental issues.
CGA-Canada analyzed survey results of over 200 companies listed on the Toronto Stock Exchange and the TSX Venture Exchange. Companies were asked about their corporate sustainability reporting - communication that demonstrates their responsiveness to societal issues and covers broad economic, environmental, and social performance.
Results revealed that almost half (49.8%) of the companies surveyed provide some coverage of their social or environmental performance and 18.4% of companies produce a stand-alone report on these topics. Government and regulatory requirements (49.5%), stakeholder pressures (21.4%), and corporate reputation considerations (12%) were cited by respondents as the most important drivers of corporate sustainability reporting.
CGA-Canada believes that sustainability reporting offers value to shareholders. Long-term benefits include improved strategic information, enhanced reputation, efficient use of capital, competitive advantage, and innovation.
"CGA-Canada believes that as sustainability issues and standardized reporting become increasingly important, they will become contributors to a company's intangible assets and future earnings potential if conducted with professional rigor," says Lefebvre.
CGA-Canada outlined a number of recommendations in its report, including:
• Reporting guidelines must be efficient to ensure reporting is not too costly or over-burdensome for reporters.
• Reporting must be flexible to accommodate the diverse needs of stakeholders and companies operating in various industries.
• Reporting should remain voluntary, at least in the short-term, to gain from the experiences of reporters and to allow companies to provide reports that are responsive to market needs.
• Globally-accepted guidelines, such as those provided by the GRI, are required, as are steps to improve the credibility of the reports and reward reporting companies.
• Third-party verification or assurance (auditing) offers the best method for improving credibility.
The survey cited in the report was conducted by CGA-Canada in partnership with the CGA-Canada Research Foundation, from October to December 2004. In addition to unveiling its newly collected data, the CGA-Canada report also includes a comprehensive examination of global best practices and research related to sustainability reporting.
The full report is available for download from the CGA-Canada Web site, at www.cga-online.org/canada
About CGA-Canada
CGA is the second-largest and fastest-growing accounting designation in the country. With a focus on integrity and ethics, and one of the highest education requirements in the profession, CGAs have become the country's accounting and business leaders, providing strategic counsel, financial leadership, and overall direction to all sectors of the Canadian economy.
The Certified General Accountants Association of Canada represents 62,000 CGAs and students in Canada, Bermuda, the Caribbean, Hong Kong, and China. The Association sets standards, develops and maintains education programs, publishes professional materials, advocates on public policy issues, and represents CGAs nationally and internationally.
