Evaluating the Intra-Industry Comparability of Sustainability Reports: The Case of the Oil and Gas Industry
2. Literature Review and Contextual Framework
3. Research Design and Materials
3.1. Methods and Data Collection
3.2. Analytical Framework: Stages of the Research
Conflicts of Interest
|№||Aspect from GRI and GRI Oil and Gas Supplement||Number of Companies||% of Subsample 1||% of Sample 0|
|2.||Occupational Health and Safety||14||88%||34%|
|3.||Effluents and Waste||13||81%||32%|
|8.||Training and Education||10||63%||24%|
|11.||Compliance (with Environmental Law)||8||50%||20%|
|12.||Emergency Preparedness (Oil and Gas Supplement)||8||50%||20%|
|13.||Indirect Economic Impacts||7||44%||17%|
|15.||Compliance (with Laws in Social Sphere)||7||44%||17%|
|16.||Asset Integrity and Process Safety (Oil and Gas Supplement)||7||44%||17%|
|17.||Biodiversity (Ecosystem Services, Including Biodiversity)||6||38%||15%|
|18.||Supplier Environmental Assessment||6||38%||15%|
|19.||Diversity and Equal Opportunity||6||38%||15%|
|20.||Labor Practices Grievance Mechanisms||6||38%||15%|
|21.||Product and Service Labeling||6||38%||15%|
|23.||Supplier Assessment for Labor Practices||5||31%||12%|
|24.||Customer Health and Safety||5||31%||12%|
|25.||Reserves (Oil and Gas Supplement)||4||25%||10%|
|27.||Supplier Human Rights Assessment||4||25%||10%|
|28.||Compliance (with Laws in the Sphere of Product Safety)||4||25%||10%|
|31.||Products and Services||3||19%||7%|
|33.||Equal Remuneration for Women and Men||3||19%||7%|
|34.||Freedom of Association and Collective Bargaining||3||19%||7%|
|35.||Human Rights Grievance Mechanisms||3||19%||7%|
|37.||Supplier Assessment for Impacts on Society||3||19%||7%|
|38.||Grievance Mechanisms for Impacts on Society||3||19%||7%|
|42.||Environmental Grievance Mechanisms||2||13%||5%|
|45.||Fossil Fuel Substitutes (Oil and Gas Supplement)||2||13%||5%|
|46.||Forced or Compulsory Labor||1||6%||2%|
|48.||Assessment (of Human Rights Practices)||1||6%||2%|
|50.||Investment (in Human Rights)||0||0%||0%|
|51.||Involuntary Resettlement (Oil and Gas Supplement)||0||0%||0%|
|Material Aspect||Number of Companies||Indicators||Number of Companies||%|
|Emissions||14||G4-EN15: Direct greenhouse gas (GHG) emissions (Scope 1)||12||86%|
|G4-EN16: Energy indirect GHG emissions (Scope 2)||11||79%|
|G4-EN17: Other indirect GHG emissions (Scope 3)||4||29%|
|G4-EN18: GHG emissions intensity||10||71%|
|G4-EN19: Reduction of GHG emissions||6||43%|
|G4-EN20: Emissions of ozone-depleting substances (ODS)||7||50%|
|EN-21: NOX, SOX, and other significant air emissions||12||86%|
|Occupational Health and Safety||14||G4-LA5: Percentage of total workforce represented in formal joint management–worker health and safety committees that help monitor and advise on occupational health and safety programs||9||64%|
|G4-LA6: Types and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities by region and gender||14||100%|
|G4-LA7: Workers with high incidence or high risk of disease related to their occupation||8||57%|
|G4-LA8: Health and safety topics covered in formal agreements with trade unions||8||57%|
|Effluents and Waste||13||G4-EN22: Total water discharge by quality and destination||11||85%|
|G4-EN23: Total weight of waste by type and disposal method||11||85%|
|G4-EN24: Total number and volume of significant spills||11||85%|
|G4-EN25: Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention 2||7||54%|
|G4-EN26: Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the organization’s discharge of water and runoff||5||38%|
|OG5: Volume and disposal of formed or produced water||6||46%|
|OG6: Volume of flared and vented hydrocarbon||7||54%|
|OG7: Amount of drilling waste (drill mud and cuttings) and strategies for treatment and disposal||6||46%|
|Economic Performance||12||G4-EC1: Direct economic value generated and distributed||11||100%|
|G4-EC2: Financial implications and other risks and opportunities for the organization’s activities due to climate change||5||45%|
|G4-EC3: Coverage of the organization’s defined benefit plan obligations||5||45%|
|G4-EC4: Financial assistance received from government||7||64%|
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|Standard/Framework||Concepts of Comparability|
|IASB conceptual framework for financial reporting, Chapter 3, QC20–25|
FASB conceptual framework for financial reporting, Chapter 3, QC20–25
|“Comparability is the qualitative characteristic that enables users to identify and understand similarities in, and differences among, items.”|
“Some degree of comparability is likely to be attained by satisfying the fundamental qualitative characteristics.”
“Although a single economic phenomenon can be faithfully represented in multiple ways, permitting alternative accounting methods for the same economic phenomenon diminishes comparability.”
|Global Reporting Initiative (GRI) Standards, GRI101: Foundation||“Comparisons between organizations require sensitivity to factors such as the organizations’ size, geographic influences, and other considerations that can affect the relative performance of an organization. When necessary, it is important to provide context that helps report users understand the factors that can contribute to differences in impacts or performance between organizations. The organization is expected to include total numbers (that is, absolute data, such as tons of waste) as well as ratios (that is, normalized data, such as waste per unit of production) to enable analytical comparisons.” |
“The reporting organization’s performance can be compared with appropriate benchmarks. When they are available, the report utilizes generally accepted protocols for compiling, measuring, and presenting information, including the information required by the GRI Standards.”
|Integrated Reporting Framework (<IR>) Framework, Part II, Chapter 3, G||“The specific information in an integrated report will, necessarily, vary from one organization to another because each organization creates value in its own unique way. Nonetheless, addressing the questions relating to the Content Elements, which apply to all organizations, helps ensure a suitable level of comparability between organizations.”|
“Other powerful tools for enhancing comparability can include using benchmark data, such as industry or regional benchmarks, presenting information in the form of ratios (e.g., research expenditure as a percentage of sales or carbon intensity measures such as emissions per unit of output), [and] reporting quantitative indicators commonly used by other organizations with similar activities, particularly when standardized definitions are stipulated by an independent organization.”
|Climate Disclosure Standards Board (CDSB) Framework, Chapter 2, P4||“Comparability is the qualitative characteristic of information that enables users to identify similarities in, and differences between, two sets of information.”|
“Comparability greatly enhances the value of information to investors and is therefore the objective of this requirement.”
“In the early years of adoption, it is recognised that comparability of material environmental information between organizations and sectors may be limited, pending development of common disclosure approaches, policies, and practices.”
|Sustainability Accounting Standards Board (SASB) Framework, Chapter 4||“At the level of accounting metrics, the SASB considers the following set of criteria when evaluating potential metrics to measure performance on aspects of each sustainability topic: […] Comparable Metrics will yield primarily (a) quantitative data that allow for peer-to-peer benchmarking within the industry and year-on-year benchmarking for an issuer but also (b) qualitative information that facilitates [the] comparison of disclosure.”|
|Financial Stability Board (FSB) Task Force on Climate-Related Financial Disclosures (TCFD), Appendix 3||“Principle 5: Disclosures should be comparable among organizations within a sector, industry, or portfolio. Disclosures should allow for meaningful comparisons of strategy, business activities, risks, and performance across organizations and within sectors and jurisdictions. The level of detail provided in disclosures should enable comparison and benchmarking of risks across sectors and at the portfolio level, where appropriate. The placement of reporting would ideally be consistent across organizations—i.e., in financial filings—in order to facilitate easy access to the relevant information.”|
|No. of Companies in the Sample||%|
|Small and Medium Enterprises||2||4.9%|
|State-owned (or subsidiary)||8||19.5%|
|Stage 0||Include all listed companies operating in the oil and gas industry with sustainability reports||GRI Reports List of oil and gas companies||Sample 0|
Oil and gas sustainability reports
|Stage 1||Availability of the correlation between material aspects and GRI aspects of companies in Sample 0||GRI framework||Subsample 1|
|Stage 2||Analysis of material aspects reported by companies in subsample 1||GRI framework||Subsample 2|
Selection of most reported material aspects
|Stage 3||Analysis of indicators used by companies for material aspects in subsample 2||GRI framework||Subsample 3|
Selection of most reported indicators
|Stage 4||Qualitative characteristics of indicators in subsample 3:||GRI framework and other reporting standards and frameworks||Qualitative characteristics of indicators for comparability|
|Subsample 1: Comparable Companies||% of Sample of Oil and Gas Companies|
|No. of Companies||%|
|Small and Medium Enterprises||1||6.3%||4.9%|
|Forms||Number of Companies||%|
|Correlation with GRI indicators||4||25.0%|
|Material aspects coincide with GRI aspects||3||18.7%|
|GRI content index||2||12.5%|
Oil and gas companies with sustainability reports
Comparable companies in a GRI framework (1)
Most reported material topics in comparable companies (2)
Most reported indicators in comparable companies (3)
Qualitative characteristics of comparability (4)
|1. Context and description||2. Quantitative measures||3. Total numbers and ratios||4. Reporting period(annual)||5. Benchmark||6. Breakdown of the numbers||7. Disclosed method of evaluation||8. Generally accepted measures for total numbers|
|Occupational Health and Safety|
|Effluents and Waste|
- The % of incidences calculated on the sample of oil and gas companies at Stage 0.
- The % of incidences calculated on the comparable companies at Stage 1.
- The % of incidences calculated on the companies at Stage 2.
- The % of incidences calculated on the companies at Stage 3.
|Stage of Comparability||Output||Result in Total Numbers||Result in Percentage|
|Stage 0||Sample 0|
Oil and gas sustainability reports
|41 reports out of 68||60.2%|
|Stage 1||Subsample 1|
|16 reports out of 41||39.0%|
|Stage 2||Subsample 2|
Selection of most reported material aspects
|4 aspects out of 51 appear in more than 75% of companies from subsample 1||7.8%|
|Stage 3||Subsample 3|
Selection of most reported indicators
|8 indicators out of 23 appear in more than 75% of companies from subsample 1||34.8%|
|Stage 4||Qualitative characteristics of indicators for comparability||2 indicators out of 8 implemented more than 75% of qualitative characteristics of comparability||25.0%|
© 2019 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).
Cardoni, A.; Kiseleva, E.; Terzani, S. Evaluating the Intra-Industry Comparability of Sustainability Reports: The Case of the Oil and Gas Industry. Sustainability 2019, 11, 1093. https://doi.org/10.3390/su11041093
Cardoni A, Kiseleva E, Terzani S. Evaluating the Intra-Industry Comparability of Sustainability Reports: The Case of the Oil and Gas Industry. Sustainability. 2019; 11(4):1093. https://doi.org/10.3390/su11041093Chicago/Turabian Style
Cardoni, Andrea, Evgeniia Kiseleva, and Simone Terzani. 2019. "Evaluating the Intra-Industry Comparability of Sustainability Reports: The Case of the Oil and Gas Industry" Sustainability 11, no. 4: 1093. https://doi.org/10.3390/su11041093