Where Did All the Pollution Go: An Analysis of Corporate Emissions Reporting
As Corporate Social Responsibility has grown, more and more corporations have begun to disclose emissions data. Yet there is no SEC for reporting on social responsibility, leading to a patchwork of regulatory bodies that companies exploit to construct a facade of sustainability.
Abstract
The objective of this study was to investigate the impact of different standards and frameworks used by companies within three distinct industries (chemical, utility, retail) that are part of S&P 500 in the reporting of Greenhouse Gas (GHG) emissions to determine their levels of accuracy and understand the differences in the various standards used by companies for reporting purposes. Using hand-collected data on the size of the company, GHG emissions data from 2019 and 2020, Plant, Property, and Equipment (PPE) data from the company balance sheet, and emissions frameworks used by the company, attempts were made to correlate the company’s GHG emissions normalized for the type of PPE used by the company with various factors such as audit credibility and the standards used in reporting.
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Analysis was conducted on the various standards and how the companies compared in reporting requirements and back up data needed to assure data integrity. The results of the statistical analysis indicated a lack of consistency within each sector on how companies reported the data and the standards used. Comparison of data from each sector also showed differences in analysis and reporting methodology.
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Our research showed that although the number of companies filing Corporate Social Responsibility (CSR) reports continues to increase, there is a need for more standardization. Organizations such as the Greenhouse Gas Protocol could facilitate the standardization of Key Performance Indicators (KPIs) to promote greater stakeholder trust.