Academic journal article Auditing: A Journal of Practice & Theory

Reporting on Sustainable Development: A Preparer's View

Academic journal article Auditing: A Journal of Practice & Theory

Reporting on Sustainable Development: A Preparer's View

Article excerpt

Keywords: assurance; sustainable development; social reporting; social verification.

In this paper, I share with you the recent experiences of the Shell Group with sustainability reporting. The full story about Shell's commitment to contribute to sustainable development and what we did to add substance to that commitment has become quite long because we have been really active over the last three years. Therefore, I have to go through it with gigantic steps. In fact, I will disregard most of my standard presentation and concentrate on the reporting and verification aspects and, in particular, on the social verification that is, by anybody's standard, the most complex issue in sustainable development reporting. I will not address environmental verification; suffice it to say that we have made important progress in that area as well. The topics I discuss are the following: context and content, why reporting, some general and verification experiences, and some of the issues and features that will emerge over the next couple of years.

CONTEXT AND CONTENT

One publicly stated objective of The Shell Report(1) is that eventually it aims to evolve into the Shell annual report including the full financial report, as well as reports on the environmental and social performance of the Shell Group, hopefully in a fully integrated manner. There is still a long way to go, but that is the long-term aspiration. However, for the immediate future we have decided to focus on sustainable development and to try to report openly and honestly on the impact of our activities on and our performance in the three dimensions of sustainable development: economic, environmental, and social. In practice, there is an emphasis on the latter two. One feature has been that The Shell Report, from day one, does contain verified information that conventionally has not been verified.

The first report was "Profit and Principles: Does There Have To Be A Choice." This document caused a bit of a stir within and outside the corporate world because it followed an approach and contained material that no multinational company had ever presented before. In it we published a road map in which we set out our commitments over time and positioned them within the concept of sustainable development. That is to say it identified and highlighted the three dimensions of sustainable development. However, it also began to focus on the individual components of social accounting and reporting, e.g., stakeholder engagement processes, standards, and verification. Essentially, the central context was the question "How does one translate this difficult and abstract concept into day-to-day reality in the business?"

To provide an overview of The Shell Report 2000, "How do we stand? People, Planet & Profits," Table 1 contains a summary of the content of the report. As can be seen, the report focuses on reporting various aspects of sustainable development and "provides evidence and documents the actions we have taken in 1999 in striving to meet our commitments" (The Shell Report 2000, 1). In particular, note that page 5 contains the independent report of the verifier.

TABLE 1
Contents of The Shell Report 2000

Topic                       Pages   Details

Message from the Chairman    2-3    The chairman's perspective on
                                    where we stand on sustainable
                                    development and how we measure up
                                    against our targets.

Transparency                 4-5    We explain transparency and
                                    techniques to improve credibility.
                                    The independent report of our
                                    verifiers can be found here.

Why sustainable
development?                 6-7    Look here for what sustainable
                                    development means to us.

Economic                     8-13   How do we perform financially? … 
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