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ACCA Applied Knowledge · Business and Technology · Environmental and sustainability factors

A company publishes a sustainability report that highlights its successful tree-planting programme but omits a recent pollution incident at one of its plants. Which concern about sustainability reporting does this best illustrate?

This illustrates selective disclosure, commonly called greenwashing. By publicising positive actions while omitting a significant pollution incident, the company gives a misleadingly favourable picture of its environmental performance. Balanced and complete reporting is needed for stakeholders to rely on a sustainability report.

  1. ALack of a statutory deadline for publishing the report
  2. BSelective disclosure, sometimes called greenwashingCorrect
  3. COver-reliance on quantitative data
  4. DExcessive audit costs

Explanation

Reporting only favourable environmental information while leaving out damaging events gives a misleading impression of performance. This is greenwashing, a risk where sustainability reporting is voluntary or unverified. The other options are not what the scenario describes, since the issue is the balance of content.

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