This piece in the Globe and Mail was interesting:
Shell was early with â€œsustainability reportingâ€ (their first annual sustainability report was published in 1998). They currently have a goal to have their (self-reported) greenhouse gas emissions 5 per cent below 1990 levels by 2010, similar to the Kyoto Protocols.
The story was about Shell’s CEO lauding the Kyoto Protocol and expressing his wish that there was a strong worldwide framework within which the oil industry could work with governments to control carbon emissions. But I’m interested in the standards:
The company is using the Global Reporting Initiative guidelines, the best known international standard for reporting on GHG emissions. So Shell is also more transparent than some. Shell claims to have invested $1-billion (U.S.) in renewables since 2000, notably in a major offshore wind project in the North Sea.
Is anyone auditing this report? Or Shell’s claim of investing $1B USD in renewable energy? I took a look at 2005’s Sustainability Report and found no auditor’s report. There is an impressive External Review Committee, with representatives from Transparency International and the Danish Institute for Human Rights. They describe their procedures and identify three guiding principles: materiality, completeness, and responsiveness to stakeholders.
Sounds like a great opportunity for an audit of both non-financial and financial information.
2 thoughts on “Shell and reporting sustainability”
In principle I think you’re right: Sustainability investments undoubtedly have a payoff of some kind, at least in expectation (i.e., in probability). So when investors begin to recognize the importance of the reporting, the demand for auditing the reports should follow …
But how’s this for another opportunity for audit services: See the discussion of the Big 4’s 2006 financial results at …
I’m not a huge fan of regulation, but I would think U.S. accounting industry regulators (e.g., PCAOB) would want this stuff audited(?).
Wow, now that’s strong growth. The Next 2 are growing as well.
What about the European regulators though? The link says 44% of worldwide revenue was from Europe, and 43% Americas.
More needs to be done to encourage companies to use smaller audit firms, or to help smaller firms compete.
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