In an era where environmental, social, and governance (ESG) goals shape business strategies, sustainability reporting has become a critical practice for organizations aiming to demonstrate responsible operations. Douglas Kent of ASCM makes a strong argument that ESG is becoming more prominent around board-room with a clearer link being made between finance and ESG. There will be a bigger premium to be paid for sourcing of funds if you are not focused on ESG than companies that are. At the risk of mis-representing Douglas and his co-author Deborah Dull, we highly recommend reading their book ‘Sustainable Supply Chain Orchestration’ for far more detail on this topic. Yet, as sustainability claims grow, so does the risk of greenwashing — the practice of misleading stakeholders about environmental performance. This makes independent, trusted verification essential for credible sustainability reporting.
What is Sustainability Reporting?
Sustainability reporting involves disclosing an organization’s ESG goals and its progress toward achieving them. It aligns with business strategy, supply chain operations, and stakeholder expectations, following the SCOR framework’s processes under Orchestration, OE10 Environment, Social, and Governance:
- OE10.1: Aligning sustainability plans with business goals
- OE10.2: Integrating ESG into supply chain processes, people, performance, and practices
- OE10.3: Developing a materiality index to identify priority areas
- OE10.4: Addressing supply chain risks from economic, ecological, and ethical impacts
- OE10.6: Creating integrated ESG reports for transparent communication
These processes are supported by metrics that measure environmental impact, including energy consumption (EV.1.2), renewable material usage (EV.2.1), GHG emissions (EV.2.7–2.9), and waste management (EV.2.10–2.11).
The Prevalence of Greenwashing
While many organizations claim sustainability achievements, not all are backed by concrete action. Greenwashing occurs when companies exaggerate or falsify their ESG progress, eroding stakeholder trust and exposing businesses to regulatory scrutiny. Common greenwashing tactics include:
- Vague Claims: Using terms like “eco-friendly” or “sustainable” without specifics.
- Selective Disclosure: Highlighting positive results while omitting negative impacts.
- Lack of Verification: Failing to validate performance through independent audits.
The Need for Independent & Trusted Verification
To counter greenwashing and ensure transparency, sustainability reporting must undergo independent verification. This involves third-party assessments that validate ESG claims against established frameworks, such as:
- Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) standards
- ISO 14064 for greenhouse gas emissions
- Science-Based Targets initiative (SBTi) for climate action
Verification ensures that reported metrics—from renewable energy consumption (EV.2.3) to diversity and inclusion (SC.1.1)—are accurate and aligned with industry standards.
Embedding Trust in the Supply Chain
Organizations can strengthen sustainability efforts by embedding verified ESG practices across supply chain processes, including:
- Strategic Sourcing (S1): Prioritizing suppliers with certified sustainability credentials.
- Circular Supply Chain Management (OE13): Reducing waste through reuse and recycling.
- Order Planning (P2): Aligning procurement with ESG goals and minimizing environmental impact.
Through independent verification, companies not only build trust but also drive continuous improvement, ensuring sustainability is more than a marketing claim—it’s a measurable, accountable practice.
Conclusion: From Reporting to Real Impact
Sustainability reporting is more than a compliance exercise—it’s a commitment to transparency, accountability, and continuous improvement. To put in more simple terms, it is about trust. To move beyond greenwashing, companies must embrace independent verification, ensuring their ESG claims are credible and trusted. By doing so, they not only protect their reputation but also contribute meaningfully to a more sustainable future.
