Not enough big companies have measures in place to show their sustainability and carbon reporting is done properly, according to a new report from Carbon Smart.
Every year the firm measures the quality of ‘assurance statements’ released by companies alongside their reports. An assurance statement shows the report has been done correctly and that the findings are therefore accurate.
Carbon Smart’s 2013 index found just 70 companies from the FTSE 350 – less than a quarter – had assurance statements to verify the quality of their reporting, eight fewer than in 2012.
EasyJet, Rolls Royce and Sainsbury’s were among those in the vast majority with no assurance statement whatsoever.
There were also problems where assurance statements were present. The fourth annual index found half of all statements listed no professional qualification for the assurance provider while just 3% could claim with a high degree of confidence that the reports they assured were accurate, reliable and free from misstatements.
The report said a fifth of all statements couldn’t claim to be independent because either the declaration of independence was insufficient or there was reason to believe the assurances were not conducted by an independent body. Carbon Smart’s advisory panel said independence was “fundamental in ensuring an unbiased and objective opinion is provided.”
Despite this stark finding there was some good news in the report. It found 64% of statements met Carbon Smart’s standards for clarity – a clear statement being one that was transparent and free from jargon, clear about the scope and level of assurance and stated the assurance standards that were followed. By comparison just under a half (49%) of statements met the standard last time round.
The report also showed 91% of statements used a recognised methodology and 99% were clear about whether carbon reporting was covered by the assurance.
Out of the companies providing assurance statements, buildings materials group CRH was deemed to be the top dog in Carbon Smart’s sustainability assurance index. Other high performers included BP and Essar Energy. United Utilities Group, Amec and Royal Dutch Shell were among those towards the back of the pack.
In the carbon assurance index the consumer services firm UBM took first place, followed by National Grid in second and BG Group in third. Tullow Oil, Premier Oil and Essar Energy were among those trailing in the index.
Progress will no doubt be spurred by the introduction of mandatory carbon reporting this year, which means all incorporated companies in the UK are now obliged to accurately report carbon emissions in their annual directors’ report.