Sustainability reporting trends in the limelight in Brussels

Sustainability reports should not be the goal in itself but rather a tool that helps to improve the decision-making information base.

The European Court of Auditors organised a conference on sustainability reporting in June. The conference was arranged around a recent review according to which the first EU agencies have already started to publish sustainability reports following practices generally applied in the private sector. The review also discussed the role of sustainability in EU performance reporting.

The conference was opened by Eva Lindström, Member of the European Court of Auditors for Sweden, and EU Commissioner Jyrki Katainen.

The key themes of the conference concerned participating in sustainability reporting and the quality and verification of reporting. Outsourcing non-sustainable practices to developing countries also generated discussion. This is particularly problematic in the case of the sustainable development goal concerning sustainable consumption and production patterns (Goal 12), as Heidi Hautala, Vice President of the European Parliament, emphasised in her speech.

Sarah-Jayne Dominic, a representative of the Global Reporting Initiative (GRI), the internationally most commonly used sustainability reporting standard, emphasised that sustainability reports should not be the goal in itself but rather a tool that helps to improve the decision-making information base. Robert Scharfe, CEO of the Luxembourg Stock Exchange, noted that sustainability reporting has become practically a necessity for successful companies.

Gert Jan Koopman, Director-General for the EU Directorate-General for Budget emphasised the special characteristics of the public sector compared with the private sector. Mr Koopman stated that instead of sustainable development, in the current EU funding period, the focus has been on climate reporting.

The NAOF Auditor General Tytti Yli-Viikari discussed the importance of a policy coherence. However, auditing policy coherence is difficult, as the object of the analysis should be examining the entire budget from a selected perspective instead of focusing on individual appropriations. This would require new cross-administrative collaboration from auditors. Sustainability reporting brings new challenges for both reporting practices and auditing of sustainability reports.