Resources: Resources sector leads Excellence in Sustainability Report
Recent Gauteng Business News
The resources sector has dominated the annual Ernst and Young Excellence in Sustainability Reporting (ESR) survey for Gauteng 2008, with four of the top five rankings going to mining or fuels companies.
Topping the leader board in this year’s rankings are Anglo Platinum and Sasol who tied in first place, followed by BHP Billiton and AngloGold Ashanti. Standard Bank was the only financial services sector organisation to make an appearance at the top, rounding out the first five.
The survey encourages excellence in the quality of sustainability reporting to all stakeholders by South Africa’s top companies and state-owned entities.
Conducted by University of Johannesburg (UJ) adjudicators or members of the Ernst and Young Governance and Sustainability team, the ESR survey provides all 56 companies listed on the JSE Limited’s Socially Responsible Investment Index (SRI), as well as the five largest public interest entities and state owned entities with the opportunity to benefit from a detailed analysis of how their sustainability reporting compares with that of their counterparts in business.
According to Jayne Mammatt, Associate Director, Governance and Sustainability at Ernst and Young, the ESR survey is a valuable opportunity for companies to benchmark their reporting, with a complete individual report available on request at the end of the exercise.
“The report contains practical suggestions and comments that can be used to improve the quality of future reporting by an organisation,” she says.
Companies like Anglo Platinum, BHP Billiton and Sasol have demonstrated a sound commitment to the principles of sustainability reporting by achieving top places in the ESR Survey, Mammatt says.
Says UJ Professor Alex van der Watt, who has adjudicated all sustainability reports for this survey, for the four years it’s been running, “Overall, we were pleased with the quality of reports for 2008.” The Professors Alex van der Watt and Ben Marx found four positive characteristics in this year’s review, namely: an increased commitment to sustainability, increased effectiveness of communication, increase in the quality of reporting, and increased levels of trust and reliability.
“However,” adds van der Watt, “we noted limited evidence overall, that the report content has been determined through the application of internationally recognised principles, and this – to us – was quite disappointing.” He added that stakeholders in the years ahead will demand more information regarding the determination of issues in the reports.
It is certainly notable that the resources sector is demonstrating sound governance and reporting principles in sustainability, ahead of the financial services sector. Just one other bank – Nedbank – made it into the top eleven companies which were all rated ‘Excellent’, while the only other financial services organisation in this league was Liberty Group. However, Mammatt notes that this trend may have its roots in the fact that sustainability reporting evolved from environmental reporting. “Resources companies are perceived as having a greater impact on the environment and hence have focused efforts on this type of reporting long before other sectors; thus, this could be a reflection of maturity more than a reflection of the willingness to report.”
The survey, continues Mammatt, determines the level and quality of sustainability reporting. “The results sufficiently differentiate between companies that exhibit a high level of excellence regarding sustainability reporting and those that do not,” she confirms.
Since the survey is evaluating the ability and propensity of each organisation to share information, publicly available data is used as the basis for grading. “Sustainability reports as supplied by the companies are our starting point, but where clear and specific reference is made to further information available elsewhere (such as on the web), this information is included as part of the overall ‘sustainability reporting’ – we recognise that it is not just about an annual hard copy report,” Mammatt notes.
She adds that the quality of reporting is evaluated not on the quality or appropriateness of performance or response to a particular issue. “Stakeholders of that company have to analyse this and make their decisions based on what is important to them. Our award commends those who report comprehensively and logically - and highlights those who do not.”
Mammatt further points out that the results are not necessarily a reflection of future sustainability, nor the track record of these companies with regard to social, economic and environmental performance.
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