The Consultants Behind the Scenes: Crafting Sustainability Reports

Consulting firms are playing a crucial but often unseen role in shaping the narrative of Environmental, Social, and Governance (ESG) reports for companies around the world. These reports are meant to outline the positive and negative impacts of a company’s activities, as well as the steps they are taking to address them.

However, the lack of external assurance in many countries means that companies can manipulate these reports to make themselves appear more sustainable than they actually are. This practice, known as “greenwashing,” involves selectively disclosing information that paints the company in a positive light while omitting less flattering details.

In Australia, where ESG reporting is voluntary but widespread, consulting firms have capitalized on this growing market opportunity by offering their expertise in framing sustainability measures as beneficial for profitability. However, critics argue that these firms may actually undermine their own sustainability services by working with polluting industries and providing superficial solutions to complex issues.

The process of sustainability reporting often involves a power imbalance between external consultants and the companies that hire them. Consultants are typically hired to complete a report within a specific timeframe, limiting their exposure to a company’s overall operations and forcing them to rely on potentially biased information provided by the company.

To address these issues, experts suggest that companies should ensure a diverse range of experts are involved in the reporting process and that more countries should require external assurance of sustainability reports. Ultimately, the goal of sustainability reporting should be to provide a transparent and accurate assessment of a company’s impact on the environment and society, rather than simply serving as a marketing tool.