The European Court of Auditors have found that the European Commission is not leading by example on sustainability reporting.
Eva Lindström, European Court of Auditors, said that in light of the EU’s commitment to achieving the SDGs, “we would expect the Commission to be able to report on the results achieved".
The auditors note that sustainability risks can often become financial risks, and external assurance of sustainability reports can increase credibility and trust in information provided.
12 June 2019: The European Court of Auditors issued a review of the EU’s reporting on SDG achievement and sustainable development, both at the EU level and reporting by individual EU agencies and institutions. The auditors conclude that the EU has not yet created the building blocks for meaningful reporting on sustainability.
Eurostat reports on indicators and SDG progress, but does not measure the EU’s contribution to achieving the SDGs.
The European Court of Auditors’ report titled, ‘Reporting on Sustainability: A Stocktake of EU Institutions and Agencies,’ observes the EU’s stated commitment to implementing the SDGs, and notes that many EU laws require large companies to report on sustainability. However, the auditors find that the European Commission (EC) is not leading by example on sustainability reporting. Moreover, they observe that the EU lacks a strategy on sustainable development through 2030 that identifies the SDGs relevant for the EU and relevant objectives and targets.
The report notes that the Commission’s statistical body, Eurostat, publishes annual reports on indicators and progress related to the SDGs, using statistical information collected by EU member States. It does not, however, measure the contribution of EU budget and policies to sustainable development and achieving the SDGs.
The auditors identify two EU institutions and agencies that publish sustainability reports: the European Investment Bank (EIB) and the EU Intellectual Property Office. Reporting by others is “often piecemeal and incomplete and does not cover all aspects of sustainability,” they write. In general, EU institutions and agencies provide information on “how the running of their organization affects sustainability, such as their use of paper or water,” rather than how they consider sustainability in overall operations and strategy. The authors note that the EC has begun to adapt its performance reporting system in the area of external action to the SDGs and sustainability.
The auditors further identify challenges related to increasing credibility through audit, noting that sustainability risks can often become financial risks. They argue that external assurance of sustainability reports “can increase credibility and stakeholders’ trust” in information provided and reduce the risk of “greenwashing.” The report highlights some key results of supreme audit institutions (SAI) audits on the SDGs. In Austria, for example, the government adopted a mainstreaming approach to the SDGs, but the Austrian SAI found that the country did not adequately define overall responsibility, resulting in a fragmented implementation process and a lack of coordination in evaluation and reporting.
Eva Lindström, European Court of Auditors, said that in light of the EU’s commitment to achieving the SDGs, “we would expect the Commission to be able to report on the results achieved.” Lindström underscored the importance of “reliable information on how the EU contributes” to sustainable development and climate change. [European Court of Auditors Press Release] [Publication: Rapid Case Review: Reporting on Sustainability: A Stocktake of EU Institutions and Agencies]