Apples and oranges? The challenges of comparing sustainability reporting

More and more companies are disclosing information on their sustainability performance, with over 80% reporting on their environmental, social, and economic efforts. However, new research shows that these disclosures don’t always give the full picture.



Temps de lecture

4 min


Based on an interview with Lies Bouten on her article, “Disentangling the concept of comparability in sustainability reporting” (Sustainability Accounting, Management and Policy Journal, 2023), co-written with Blerita Korca (University of Bamberg) and Ericka Costa (University of Trento).

Professor BOUTEN and her colleagues studied “comparability” in sustainability reporting. This refers to the question of whether the data in a report can be measured against competitors, external benchmarks, and past performance. In financial reporting, comparability is vital for investors to make informed decisions. Is comparability also a meaningful and achievable goal in sustainability reporting?

“What gets measured gets managed”

In 2014, the EU introduced the Non-Financial Reporting Directive (NFRD), which mandates certain large entities to report on sustainability. However, the NFRD does not prescribe reporting standards, and a public consultation revealed that most report users, especially investors and other financial stakeholders, found that comparability was an issue.

From the fiscal year 2024, most EU companies will have to report on sustainability using the newly written European Sustainability Reporting Standard (ESRS), developed to standardize sustainability reporting and enable comparability.

The concept of comparability in this type of reporting has therefore gained increasing attention. However, in the sustainability context, the authors say that it is often challenging to compare disclosures.

“For example,” Professor BOUTEN says, “if you have two companies with the same water usage, the effect of the company in a water-stressed region has far more impact than the company in a region with no water stress.”

The researchers re-examined comparability in the sustainability context. They identified three necessary concepts for effective sustainable reporting guidelines: materiality, benchmarking, and operationalization.


Investors, NGOs, cities, and local communities may all use sustainability reporting, but these stakeholders concentrate on different topics. Investors are primarily interested in financially relevant information to make decisions, whereas for non-financial stakeholders, the focus is on holding companies accountable, for example by using data on child labor practices in the supply chain.

Non-financial stakeholders generally have less power and influence. If the sustainability reporting prioritizes the information needs of investors, societal issues may be neglected. Companies should therefore consider the goals and priorities of all stakeholders when deciding what information is the most relevant to disclose.

The authors also highlighted that whilst having a predefined set of disclosure topics enables comparability, this must be balanced against the need to adapt the report to each company’s natural environment and local community, meaning that disclosure topics not included in the predefined set may be relevant to report on.


A company’s performance compared to others can contextualize its sustainability efforts. However, when a company benchmarks their results against competitors, they may only disclose the aspects they perform best at.

The banks profiled were reluctant to disclose benchmarking against other companies. When benchmarking was adopted, it was used to demonstrate that they were “best in class” for a given category.

“If you focus on comparability, in most companies, then you often see that there is also some impression management going on,” says BOUTEN.

By contrast, the authors found that intra-firm comparability that measures changes in performance over time can encourage accountability. This information is necessary for readers to hold companies to account with regards to their performance. Such disclosures also enable a switch from short-term to long-term thinking, essential to reduce environmental impacts in society.


Both banks used the same standards and supposedly reported on many of the same metrics, but it was nevertheless challenging to compare their reports. The banks did not share the methods and baselines used to calculate some quantities, and the scales requested by the standard setters were not always used.

In addition, the authors showed that companies often use “boilerplate” language that is vague and generic. For example, most companies will cite an employee development program, but may not be specific about what training is provided or what the outcomes are.

Balancing materiality and comparability

This research finds that companies may use different standards and benchmarks and may selectively disclose only the most positive results.

In addition, the authors stress that when looking at environmental impacts, contextual information about where and how a firm operates is needed to fully evaluate its performance.

Research shows that most companies state improved sustainability as a long-term goal. To enable accountability and target global environmental goals, we must reimagine what it means for data to be “comparable.”


This research identifies three facets to formulate effective sustainability reporting guidelines: materiality, benchmarking, and operationalization. This could help turn sustainability reporting into a long-term managerial tool that will embed positive practices in organizations.

These results can be used to make recommendations to policymakers and standard setters. “I think one of the main takeaways is that you have to find the right balance between materiality and comparability,” BOUTEN says. The authors propose that having a predefined set of topics that a company must report on enables comparability but may neglect the needs of less powerful stakeholders, which can be identified by considering materiality. A balance between materiality and comparability would ensure more meaningful disclosures, enabling both valuation opportunities and accountability.


BOUTEN and her colleagues reviewed the different standards of sustainability reporting and informed their conclusions using literature from the field and the sustainability reports from two Italian banks over three years.

Category (ies)

CSR, Sustainability & DiversityEconomics & Finance


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