Sustainability reporting by companies
This indicator shows the percentages of the largest firms headquartered in Switzerland that systematically report on their sustainability efforts as part of standard operations. Sustainability reporting is a clear sign that firms are thinking about their environmental impacts. The guidelines of the Global Reporting Initiative (GRI) are the most important international standard. However, a sustainability report still does not guarantee the quality of a company’s environmental management or its sustainability performance, even if it meets the GRI requirements.
In 2016, 73 of the 110 largest Swiss companies (66%) reported on their sustainability efforts, and 47 of these followed the guidelines of the Global Reporting Initiative (GRI). In 2010, there were only 49 and 33 respectively.
Thus, two thirds of the largest Swiss firms currently report on their sustainability efforts, with 32% of the reports being audited externally. 44% of the reporting companies included full details of their sustainability reporting in their annual reports.
When not just the largest companies are considered, but all firms with at least 250 employees, the percentage of companies that follow GRI reporting guidelines is significantly lower, i.e. 5.4% in 2016 (see GRI’s 2019 Reports List and the FSO’s 2018 report Marktwirtschaftliche Unternehmen nach Wirtschaftsabteilungen und Grössenklasse (not available in English)).
The indicator state is assessed as medium. If the formal quality of sustainability reports is rated according to the three criteria of comprehensiveness, credibility and relevance, most companies achieve average scores with their reporting (öbu & engageability 2017). Large companies tend to outperform SMEs, and while service providers perform strongly, real estate firms lag somewhat behind. Of 101 Swiss companies examined in a study, three are leading in terms of formal sustainability reporting (ibid.). For Swiss companies, there is improvement potential in areas such as external verification of sustainability reporting and transparency in supply chain management.
The trend is assessed as positive overall. Between 2010 and 2016, sustainability reporting by the largest Swiss firms increased by around 49% and reporting according to GRI standards by approximately 42%. However, the percentage of reporting companies applying the GRI reporting guidelines fell between 2015 and 2016 (from 78% to 64%). A continuation of this trend would be factored into future assessments.
Directly comparable figures are not available at this time (for an international comparison of the state of non-financial disclosures by Swiss companies, see EY 2017: Transparenz im Visier). The EU and various European countries have legal requirements for environmental reporting by companies (Directive 2014/95/EU), covering, as a minimum, environmental, social and employee matters, respect for human rights, and anti-corruption and bribery matters. Companies are also required to produce a description of their policies relating to these matters, including the due diligence processes implemented.
There is a trend around the world toward disclosing non-financial information. The number of GRI sustainability reports rose steadily between 2000 and 2015. However, this increase stalled for the first time in reporting year 2016, with 4,237 GRI reports published in 2015, compared to 4,198 in 2016. Other forms of reporting are based on, among others, the United Nations Global Compact (UNGC), the EU’s Eco-Management and Audit Scheme (EMAS), Social Accountability International’s SA8000 standard, ISO 26000, the OECD Guidelines for Multinational Enterprises (see UN Global Compact 2016) and the Economy for the Common Good.
The guidelines of the Global Reporting Initiative are the most commonly used of the current sustainability reporting standards. Every year, Ernst & Young measures the percentage of the 100 largest firms headquartered in Switzerland that report on their sustainability efforts. The firms that follow the GRI standard are shown separately.