Ever opened up a brand’s sustainability report and been completely overwhelmed? You’re not the only one. We asked our ratings analysts to debunk the most common issues they find in sustainability reports (and they read a lot of them).
So you’ve looked through our ratings directory and read our guides on living wages, fair trade, and lower impact materials. Now you’re seeking out a brand’s sustainability report or webpage to dive deep into its impact—and that’s where things can get confusing.
What are sustainability reports?
Mounting consumer and governmental pressure means that lots of fashion brands are reporting on their sustainability targets and disclosing the impact their current practices have.
For example, European Union rules currently require all large and listed companies to report on the risks and opportunities that emerge from their impacts on social and environmental issues. More companies will soon be expected to do the same due to a new EU directive coming into effect for reports published in 2025, which will also require companies to report on a specific set of issues. This directive could also eliminate some of the red flags we’re seeing in sustainability reports at the moment. But since there’s currently no specific format for how the information should be presented, it’s all too easy for reports to lack substance.
And while there are some proposed reporting formats for companies to follow, the lack of harmony amongst them makes it difficult for readers to compare multiple reports.
Reading sustainability reports is one aspect of Good On You’s ratings process because we only use publicly available information to determine how a brand scores against our methodology. Brand disclosure is one of the many publicly available sources of data we use, which also includes the most robust third party indices (like the Fashion Transparency Index, and the CDP’s Climate Change and Water Security projects), as well as certifications and accreditations (like Fairtrade, Fair Wear Foundation, Cradle to Cradle, OEKO-TEX Made in Green, the Global Organic Textile Standard, and the Responsible Wool Standard). Our How We Rate page has more information about this process.
In other words, after rating more than 6,000 brands, our expert team of analysts has read a huge number of sustainability reports. They can confidently say what makes a good—or bad—one.
Who better, then, to help us understand this complicated world of epic word counts, dubious claims, and weird graphs? Here, Good On You’s Kate Hobson-Lloyd, fashion ratings manager, and ratings analysts Noriko Kakue and Katelin Opferkuch, have shared the best practices to look out for, plus their biggest pet peeves.
What are the most common red flags?
Sustainability reports that miss the mark can generate mistrust and mislead people to believe that a brand aligns with their values, so spotting problems within reports is key.
Hobson-Lloyd notes that one of the frequent issues our ratings analysts see in reports is: “Lots of targets for the future but little evidence of the actions a brand is currently taking—this is common, particularly in relation to material usage.” Here are a few more:
- Targets for “net zero carbon emissions by 20xx”. Usually, these claims are made by big companies that, instead of taking meaningful action to reduce emissions, pay for carbon offsets—which are often questionable programs that don’t have the impact they promise.
- More words than numbers. If brands are doing something good and want to showcase that effort, they will disclose the number or statistic, and how it has improved over a period of time.
- Large chunks of reports dedicated to listing the UN’s Sustainable Development Goals (SDGs) and their focus points without clear explanations as to how the brand’s actions support them. It is important to check if the brand has specific initiatives aimed at those focus points. Many of the colourful visuals of SDGs are used to fill the pages—a practice dubbed ‘SDG-washing’.
- Information about a brand’s direct operations but not its supply chains—especially if the report bangs on about, say, coffee cup recycling in its offices but doesn’t provide information on supply chain waste, for example.
- The really big problem in too many reports from the biggest fashion brands: a failure to clearly define a brand’s key actions.
Opferkuch—a specialist in sustainability reporting who completed a PhD on the subject, says: “A weak sustainability report is a reflection of weak internal sustainability integration, such as strategic management processes, goal development, resource allocation, change management, implementation, monitoring, communication and much more. But sustainability reports, and the process required to collect data for them, can be a huge driver for companies to improve their sustainability integration overall.”
What makes a good report?
On a more positive note, there are lots of great reports out there: “We collect good examples of disclosure and reporting,” notes Kakue. She and Hobson-Lloyd explain that the best reports:
- Are well structured into categories.
- Contain clear and concise statements outlining a brand’s current actions and its progress to meeting targets—even if it is not on track to meet the target. This is especially important if a brand has set targets around, for example, greenhouse gas emissions or hazardous chemical elimination.
- Include clear data on material usage and any certifications involved.
- Have clear definitions of various stages of the supply chain and actions taken at each stage, plus details and locations of suppliers.
- Aren’t ridiculously long. Shorter reports filled with concise and clear points are more meaningful because they’re more digestible and accessible to a variety of readers, including customers, regulators and stakeholders.
- Have clear presentation and definition of any certifications the brand works with, such as GOTS or Fair Trade.
As you can see, great sustainability reports are clear and include accurate information that is backed by evidence—even if a company still has a way to go in improving its practices. If your favourite brand’s reporting isn’t up to scratch, then why not reach out to them and ask them to do better? After all, the more a brand realises that customers value better transparency, the greater its impetus to change will be.
