Comparability for sustainability reports

© Fraunhofer IML - Leonie Goral
© Leistungszentrum Logistk und IT

The recent legislatiosn challenge a large number of companies to disclose their sustainability-related data or report to suppliers and partners through supply chain obligations. From this year onwards, this also affects companies with less than 500 employees. The challenge to act sustainably remains serious while whitewashing facts has become more difficult. The legislation puts pressure on companies, which risks that fact-based reports will deteriorate into idealized advertising. The temptation to take the shortcut through greenwashing grows in order to avoid the expense of a strategic change in the company. At the same time, verifying the provided information of suppliers and cooperating companies with regard to sustainability becomes more important due to the Supply Chain Sourcing Obligations Act which is now in force.

Achieving sustainability goals together

Nearly all companies in the EU, with the exception of micro-enterprises, are confronted with the difficulty of presenting correct and complete sustainability reports. However, the date is often incomplete and therefore a desired neutral report quickly tuns into a suitable marketing article. The plausibility of the presented data remains unchecked. This is precisely where the Sustainalyze project comes in, shaping the vision of making sustainability reports comparable and assessable. The solution is going to be useful for companies in two respects: Firstly, it will be possible to use the new software to subject one's own report to a plausibility and completeness analysis. The program will point out gaps and to provide a suggestion on how to close them by making a direct comparison with competing companies in the same sector. Secondly, companies will be able to use Sustainalyze to evaluate the reports of other companies when selecting suppliers or a potential cooperation partner. Thus, in the future, the software will fulfil the further purpose of third-party evaluation, beyond that of self-assessment.

Targeting data gaps

The vision of Sustainalyze is an intelligent text recognition software which can read sustainability reports, capture them semantically and make them comparable by structurally summarizing information. Data gaps need to be identified and easily distinguished from weaker figures. Some ranking platforms already exist in the sustainability world, but none of them yet exclusively use publicly accessible data that companies are legally obliged to disclose. Recognizing the necessity for a suitable program, Sustainalyze plans to fulfil the criterion of transparency. The project will, among other things, examine whether artificial intelligence is the appropriate software system to fulfil these tasks.

The idea of automating the reading of sustainability reports and analyzing them seems promising at the moment, as since many reports are already written according to specific standards. Due to the similar structure of the reports, the goal of semantic recording and structuring by software is ideal to meet the objective.

© Fraunhofer IML - Leonie Goral