A Critical Review of Environmental Sustainability Reporting in the Consumer Goods Industry: Greenwashing or Good Business?

Abstract

As U.S. firms have extended their global reach to embrace new sources of suppliers, they have also been faced with increased pressures to demonstrate that they are socially and environmentally responsible by adhering to sustainable supply chain management practices. Many firms have therefore embraced “sustainability reporting” as a means of ensuring all stakeholders that they are paying attention to their social and environmental impacts while also maintaining their economic viability. Although guidelines for sustainability reporting have been developed by various international organizations, including the World Resources Institute, the World Business Council on Sustainable Development and the United Nations, sustainability reporting and the reporting framework are voluntary endeavors. As a result, the guidelines may not be followed, and incomplete reporting or inconsistent reports may be disseminated. The objective of this research is to identify common reporting practices as well as discrepancies in environmental reporting of selected U.S.-based consumer goods companies. These global companies are also transporting and distributing products worldwide, giving rise to the second objective of this research which is to summarize environmental reporting practices with respect to transportation and distribution. This research shows that the companies reviewed for this study under-reported carbon emissions and greenhouse gases, often omitting emissions resulting from transportation and distribution; changed performance metrics between reporting periods; and generally engaged in inconsistent reporting practices. The research also shows that upstream supply chain partners tend to provide more thorough reports regarding environmental impacts than downstream supply chain partners.

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