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The State of Sustainability Reporting in Australia 2005

Department of the Environment and Heritage, March 2006

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Executive Summary

Introduction

Sustainability reporting is of considerable interest around the world and is becoming one of the basic criteria for judging the social responsibility of organisations. Business leaders are starting to realise that comprehensive reporting helps support company strategy and shows commitment to sustainable development.

Background to this report

This is the third annual report in a series covering sustainability reporting by Australia's largest companies. The Centre for Australian Ethical Research (CAER), in collaboration with KPMG and Deni Greene Consulting Services, has conducted this project for the Australian Government Department of the Environment and Heritage (DEH).

Conduct of the study

The project involved gathering information on sustainability reporting activities from:

Data was collected using excisting databases of the study team, questionnaires sent to the companies and examination of company websites. Analysis of the data was conducted by the study team.

A broad range of corporate non-financial reports was considered under the heading of 'sustainability reports', including triple bottom line reports, environment reports and community reports. Unless otherwise noted, the term 'sustainability report' is used in this report to refer to all forms of corporate sustainability reporting.

The issues addressed by the study included:

A total of 76 companies provided information on their sustainability reporting activities. Sixty-two of the companies contacted for this project chose not to provide any information on their sustainability reporting activities. The 76 companies providing information to the project and the 62 companies declining to do so are all considered to have responded to the survey. The total of 138 companies constitutes a response rate of 28 per cent.

Key results of the study

The study provided a considerable amount of useful information and some surprising results. The key findings were:

Production of sustainability reports

Independent verification

Target audiences

Producing a sustainability report - benefits and impediments

Independent verification – benefits and impediments

Use of the GRI Guidelines

Comparison with international trends

Conclusions

One of the important findings of the study is that there is a clear difference in the reporting performance of the S&P/ASX 300 companies compared to the sample as a whole. S&P/ASX 300 companies showed a much greater increase in reporting over the past year, though their rate of reporting is still substantially lower than that of the total sample. Foreign-owned companies operating in Australia (both proprietary and public non-listed companies) have a considerably higher rate of production of sustainability reports than Australian companies.

The results of this study indicate that despite the growth in reporting this past year, Australian companies are lagging behind their overseas counterparts. This points to a need for maintaining efforts to encourage further participation in sustainability reporting by Australian companies and for continuing to monitor performance regularly so as to shape the assistance in ways that meet company needs.

The study also makes a number of recommendations regarding possible future research on sustainability reporting.

Cover of The State of Sustainability Reporting in Australia 2005