Does GRI reporting impact environmental sustainability? A cross-industry analysis of CO₂ emissions performance between GRI-reporting and non-reporting companies

The purpose of this paper is to assess whether Global Reporting Initiative (GRI) reporting has any direct and positive impact on environmental sustainability performance, and more specifically on CO₂ emissions of the reporting companies.

The authors analyze the CO₂ emissions data from 40 A-level GRI-reporting companies, over a period of six years and across five industry sectors, comparing them with a control group of 24 non-reporting companies, to assess any direct impact of reporting on emissions. Using one-way analysis of variance statistical analysis, the authors perform a cross-industry analysis of the five-year cumulative change in absolute emissions and emissions intensity for both groups of companies from 2008 to 2012.

The authors find that for both metrics, the p-value between the two groups of companies far exceeds the threshold of 0.05, hence strongly favouring the “null hypothesis” that there is no correlation between GRI-reporting and sustainability improvement. More specifically, the authors find that the mean of the five-year cumulative change for the GRI group is an actual increase of about 6 percent in absolute emissions and a decrease of 15 percent emissions intensity, while the mean for non-GRI entities shows a decrease of about 3 percent and a decrease of 17 percent in absolute emissions and emission intensity, respectively.

The authors are limited by the small sample of companies that have five or more years of reliable reporting of CO₂ emissions at Scopes 1 and 2. Nonetheless, a normality test shows that the sample size is sufficiently representative of the entire population.

The lack of any correlation between GRI reporting, which often consists of the lion share of corporate social responsibility (CSR) investment, and any material improvement in CO₂ performance, suggests that the current CSR strategies are futile as far as environmental sustainability is concerned, and hence need to be drastically modified.

This work is the first of its kind to investigate quantitatively, and using rigorous statistical methods, the correlation between GRI reporting and carbon emissions performance.