Sustainability reporting has entered the mainstream. With a plethora of institutional frameworks - such as sector charters; the King codes on corporate governance; and international sustainability protocols, such as the Global Reporting Initiative (GRI) and UN Global Compact - companies are reporting on nonfinancial issues more than ever before.
But despite the increasing pressure on companies to behave sustainably, SA's top 51 companies - based on gross revenue - score an average of only 39% on accountability, as ranked in the Accountability Rating report.
WHAT IT MEANS
 On accountability, SA's top 51 firms score an average of only 39%
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"SA companies continue to be at the forefront of the international corporate citizenship movement, which seeks to enhance the contribution of business to sustainable development," says lead researcher on the Accountability Rating, Dr Ven Pillay. "We've seen a number of companies improving their performance over the past year in terms of their reporting across a range of accountability measures, but there is much work to be done."
Based on the report developed by leading international think-tanks AccountAbility and CSRnetwork, the rating is an influential assessment of companies' corporate citizenship practices worldwide and allows stakeholders to benchmark the accountability of companies on both a local and international basis. The Unisa Centre for Corporate Citizenship applies the rating locally. Barloworld and the Unisa College of Economic & Management Sciences sponsor the research.
Mining company BHP Billiton secured first place in this year's rating, for the second consecutive year, with a score of 80%. It was followed by Sasol 72%, Lonmin 71%, Anglo American 70%, the Nedbank Group 68%, Anglo Platinum 67%, Gold Fields 66%, Barloworld 61%, AngloGold Ashanti 60% and Santam 57%.
The worst performers this year: Spar Group 9%, Naspers 10%, Datatec 10% and Shoprite Holdings 13%. Bottom-ranked Liberty Holdings (5,2%) is an anomaly as it is a holding company whose only asset is its stake in Liberty Group. The operating company is 27th on the table, with a score of 40%. Pick 'n Pay Holdings was at the bottom of the log, scoring 0%, though it is also an anomaly as Pick 'n Pay Stores scored 42% and ranked 25th.
Pillay says the local ranking is important for companies to benchmark themselves not only against each other, but internationally too. SA companies are generally excluded from the most prominent international ratings due to their limited geographical spread and turnover compared with international companies and the Rating provides an opportunity for local companies to be a part of a survey.
"I want to drive home the message that companies can make a significant difference by implementing responsible business practices," says Pillay.
She says the Rating looks at the world's biggest corporations and questions if they understand how to create and exploit effective business opportunities by addressing the needs of the poor. Do they understand how to make money by investing in environmentally sound business practices? Are they prepared to maximise the opportunities of a changing world?
The survey is based on publicly available information in the form of companies' annual, and if applicable, sustainability/corporate citizenship reports, as well as company websites. It measures the performance of companies on a range of dimensions including how well companies are able to identify and incorporate social, environmental and broader economic issues into their core business strategy.
One concern with the increasing formalisation of accountability reporting is that companies adopt a "tick-box" approach to reporting.
"The challenge now is to ensure that companies are really doing what they say they are doing," says Unisa Centre for Corporate Citizenship founding director Derick de Jongh. "We need to measure the impact of company initiatives."
Third party verification and assurance agencies may play an increasingly important role in this process in future. De Jongh says as sustainability reporting matures, more consultancies offering assurance services are being established. "When external agencies start to call into question what companies' real measurable impact is, companies will move beyond reporting simply their successes and intentions to reporting on material issues. "
In 2007, 37 of the 51 companies published an integrated social, environmental and broader economic report. Out of those, 20 indicated their commitment to the Global Reporting Index (GRI) guidelines, while 10 reported "in accordance" with guidelines. "It demonstrates that most companies are looking to provide more consistent sustainability reporting in line with global standards," says Pillay.
But though the general approach to reporting and disclosure among the 51 companies improved on material issues, nonfinancial reporting in the annual report decreased slightly over the past year.
"Overarching institutional frameworks, such as charters do encourage companies to improve their nonfinancial reporting because they provide standards and consistency," says Pillay. "But in some sectors these have not yet been implemented or companies aren't yet complying fully."
Pillay says the range of sector charters by which companies are obliged to meet targets across a range of social and broader economic issues has helped SA companies to identify and manage non-financial issues better. But most charters don't focus sufficiently on environmental issues and companies have needed to develop their own strategies.
"It's a pity that there aren't more sustainability issues included in the charters," says Nedbank head of governance & sustainability Justin Smith. "But it was a sign of where we were at as a country at the time." He says the range of international frameworks on sustainability provides a useful framework to work with, and that companies can take the most relevant measures from different protocols.
"That way you prevent duplication and can localise it by ensuring that you focus on local issues such as HIV and black economic empowerment," he says.
Pillay says she considers two of the most important aspects of accountability to be the alignment of strategy dealing with social, environmental and broader economic issues with the core business strategy as well as stakeholder engagement.
"Companies tend to think of their stakeholders as investors only, but employees and a broader range of stakeholder groups can help them achieve their financial targets too."
