Quantity rather than quality


A study by a Chinese consulting company shows that, despite an increase in companies publishing sustainable-development reports, the reports themselves still lack quality. And some enterprises are simply using them as a means to improve their public image.   

On October 6, the consulting firm SynTao released its 2009 report “A Journey to Discover Values”, which presents the results of a study on sustainable development reporting in enterprises in China. SynTao has published annual studies focusing on sustainable development since 2007.

The latest research reveals that 533 enterprises published reports on sustainable development in 2009. Nearly 70% of these were state-owned enterprises. The proportion of privately-owned companies had grown drastically since the previous year and the number of foreign-owned businesses remained roughly the same. Listed companies accounted for 78% of the total.    

In 2006, only 18 companies published their performance in sustainable development, according to SynTao’s 2007 study. This leads the consulting firm to conclude that “sustainable development reports from corporations in China are now ‘booming’.”

The 2009 report also states that there exists an “imbalance” in the quality of reports, despite the rapid increase.

SynTao believes that many companies have insufficient experience, since they have only released one such report. Despite their good will, they fail to provide essential quantitative information as a result of a lack of information collection and management systems. Sometimes, the quality of reports has nothing to do with experience, however. Many reports do not list complete data and omit unpleasant or disadvantageous information, indicating a clear tendency towards selective disclosure.

Despite the lack of quality in reporting, enterprise reports are still a means for stakeholders to gather important information.

At a conference held to officially release SynTao’s report, Wang Xuan, Oxfam’s project manager for corporate social responsibility in China, said that enterprises’ sustainability reports served as the main information source for Oxfam in compiling its Transparency Report of Hong Kong garment companies and the 2009 Corporate Social Responsibility Survey of Hang Seng Index Constituent Companies.

Zhang Boju, director of the research department at Friends of Nature, said that his organisation, together with eight other Chinese environmental NGOs, partially relies on bank reports as a source of reference to choose the winner of the Green Banking Innovation Award. But the evaluation system used by SynTao in the 2009 study reveals that many reports are still difficult to access and that a number of corporations still do not use sustainable development reports.

Guo Peiyuan, general manager of SynTao, says that the reason SynTao chose “A journey to discover values” as the title for the research studies is that enterprises discover important values while compiling their reports.

Nonetheless, many Chinese enterprises consider their reports simply as a means to enhance their image. Sustainable development reports will become meaningless if they are perceived as a mere formality and their number continues to grow without an increase in information quality.