GHG Reporting in C25 Companies

Abstract

Sustainability reporting is the communication of activities, strategy, results, and goals in the external reporting within environment, social development, human rights, and corporate governance. Sustainability reporting has been mandatory for the largest companies in Denmark since 2009, and within recent years, it has gotten more attention. Increased regulation from the EU is also expected to be implemented within the next year (CSRD, 2021). Sustainability reporting is criticised on lack of comparability and transparency, as well as insufficient data (Busch et al., 2016; Widyawati, 2020). Indicators on GHG emissions are considered important for comparability within the area as they quantify the effort and performance of companies within an area that is a burning platform. Comparability from the use of GHG indicators, however, is an area with somewhat limited research. This thesis seeks to investigate the use of GHG indicators within sustainability reports of large Danish companies as well as mapping out the key considerations there are in terms of increasing comparability. The thesis makes use of a content analysis of the sustainability reports of 24 companies, covering both 2020 and 2021. Illustration 1: C25 companies included in the content analysis From the content analysis, 742 GHG indicators have been identified and analysed. We find that 23 of 24 companies report on GHG emissions. However, the use of indicators is varied in terms of both number of indicators as well as level of information. There are issues with insufficient data as well as the delimitations of the reports, which can challenge the comparability. Many companies use reporting standards, but how they use them varies a lot, which might stem from the lack of one mandatory standard. Companies can increase comparability by reporting relevant GHG emissions from scope 1, 2 and 3 with numbers for each subcategory. This should happen without delimitations or at least with explicit reasoning for excluding certain areas. The use of one harmonized, mandatory reporting standard would be expected to increase the comparability, and assurance on the sustainability reports could make them more trustworthy. With the expectation of increased regulatory pressure within the coming years, GHG reporting will have an increased relevance to companies and stakeholders, and it is expected to be an area with much focus as well as much development