2014 Reports

Measuring and Reporting Sustainability: The Role of the Public Sector (White Paper #2)

Miller, Alison C.; Loman, Maureen

The public sector plays a critical role in advancing and supporting sustainability metrics, measurement, and reporting. It can be useful in mandating and monitoring various forms of sustainability reporting, and in guiding the development of specific information that private businesses, as well as public and non-profit organizations, ought to measure and communicate externally. Government must also establish and maintain national indicators of sustainability including measures of “green jobs” or the “green economy.” Over a dozen countries require some type of mandatory sustainability reporting. France, South Africa, India and Sweden, for example, are experimenting with policies of varying strength and requirements to both encourage sustainable practices and ensure the public has accurate and adequate disclosures about material sustainability issues. While these efforts are relatively recent, mandatory measures are growing and their impacts, at early analysis, seem positive. Studies have found that mandated reporting influences management practices, with larger impacts in countries with stronger enforcement and assurance mechanisms. Integrated reporting – the next stage of sustainability reporting – is likely to have an even greater effect on management decisions because it raises environmental issues up to the same level as financial disclosures. In the United States, sustainability reporting is not required, although there are many voluntary efforts at the company, industry, and city levels, as well as other efforts to evaluate environmental, social, and governance issues. To advance global progress on sustainability, the U.S. must move towards mandating environmental disclosure and sustainability reporting. Before we can do that, however, we need consensus on what to measure and report, which is no easy task. A federally-led initiative to help determine the metrics that organizations would be required to disclose can assist in this process, much like the decades-long process that resulted in generally accepted accounting principles. The U.S must also implement and enforce programs to measure the performance of the country itself. To date, this has included measuring “green jobs”, which it should continue doing, but it must also look to other standard metrics and commit to measurement and disclosure of these indicators.