photo: jumblejet

Every year, companies publish accounts and reports, to talk about what they have done in the past year, the events that have shaped the business, and what is likely to happen in the future.  Increasingly, the reports of the largest companies include long sections discussing environmental and social matters, and the various initiatives companies have put in place to do right by the world.  Often this information even makes up entire separate ‘sustainability’ or ‘CSR’ reports.

Annual reports are intended for the use of shareholders.  They are intended to allow shareholders to make informed judgements about the choices and actions of the people in charge of running their companies.

There is law that governs this process of reporting.  There is law that is supposed to ensure that the information in these reports is fair, balanced and comprehensive.  For shareholders and others to make informed judgements about companies, the information in these reports needs to be fair, balanced and comprehensive.

Unfortunately, greenwash is a reality: the law is not doing its job.  Annual reports are used as promotional tools by companies, and the information contained in them regularly deviates in major ways from the realities reported by many from around the world.  There is often a major gap between a company’s policies and its practice, and there is a systemic lack of candour in company reporting.  In practice, company reports rarely if ever provide a fair, balanced and comprehensive view of what the company is doing in practice.

ClientEarth is seeking to make sure that companies speak in detail about their environmental and social impacts, and that when they do so they are required to do it in a fair and balanced way.  We are seeking a stronger legal framework, and we are pushing to see the existing law implemented.