Challenges Of Corporate Sustainability Reporting

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Specific Challenges in Corporate Sustainability Reporting:
In contrast to corporate reporting generally, sustainability communication and reporting are characterized by some specific management challenges. Among the most important challenges related to company internal communication are:
 It is often difficult to identify and analyse sustainability issues, which requires a change in current and traditional terms and perceptions. Management is furthermore challenged to link strategic analysis and management together with information management, corporate accounting and Sustainability reporting.
 The complexity of corporate sustainability as a set of interrelated goals leads to problems for management in operationalization, measurement and …show more content…

Since SMEs constitute a large part of the economy and of its social and environmental effects, it is necessary to emphasise the benefits and to keep the costs of sustainability reporting low (ACCA 2004, European Environment Agency 2003, GRI 2004).
These challenges currently complicate the development of confidence and credibility in communication processes within companies, as well as between enterprises and their stakeholders. In addition, corporate sustainability reporting is confronted with sustainability specific challenges to company’s external communication (Herzig and Schaltegger 2004) such as:
 On the one side, information about the sustainability of a company is not simple for stakeholders to access directly and they can often do this only with difficulty, and its acquisition can involve very high costs in both time and money. This leads to information asymmetry between the company and its stakeholders (Schaltegger 1997). Situations of asymmetric information tend to create a climate of low credibility which the company has to overcome with specific communication and management activities such as warrants, verifications, labels certified by credible NGOs, …show more content…

Non-financial costs come from increased pressure to meet goals or criticism from stakeholders. Also, commitments to stakeholders (such as investors, employees) and environmental protection should not be viewed simply as costs (Kolk, 2004). Instead, they help insure survival in the long run. In practice, most medium and small size companies still chose not to produce the sustainability or CSR reports because there was no mandated regulation and they needed to hire new staff or train current accounting staff to learn and understand the preparation procedures. They think these additional costs may not outweigh the future benefits in short

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