The REP Wrap: ‘Be careful’ of materiality assessment consultants, warns EU advisor

Your weekly summary of corporate sustainability news.

One of the EU’s sustainability reporting advisors has urged companies to “be very careful” about taking consultants’ advice on stakeholder surveys. Speaking on a podcast titled How Should Companies Undertake a Materiality Assessment? this week, Filip Gregor, who sits on the board of EFRAG, said that while firms must explain their stakeholder engagement under the EU Corporate Sustainability Reporting Directive, it is not necessary as part of a materiality assessment. “Be very careful, especially if you’re hiring consultants and they’re telling you that materiality assessments… should start with a stakeholder survey,” said the head of responsible companies at law firm Frank Bold. “You might be wasting your time and your money”. He also noted that “if companies do a double materiality assessment under the EU standards, this would meet the requirements of any other standards out there.”

The Financial Reporting Council (FRC) has kicked-off its first ever market study, looking into the state of sustainability-related assurance. The UK regulator wants “to ensure this rapidly growing market is functioning effectively and providing high quality assurance over companies’ sustainability reporting”. It noted “potential implications for competition and resilience” as a result of big auditing firms moving into the space. The findings could lead to regulatory proposals. The FRC is asking for comments by June 13th and will conclude the study early next year.

Australian miner Glencore has released an updated climate transition plan, after 30% of shareholders rejected the previous iteration at its annual meeting last year. The firm, which acknowledges the new plan is not aligned with the IEA’s Net Zero Emissions scenarios, has removed its commitment to capping coal production. The Australasian Centre for Corporate Responsibility described it as “an extremely concerning step backwards for Glencore”.

Smurfit Kappa has said it is ahead of schedule on its plans to reduce landfill waste. In its latest sustainability report, the packaging giant claims to have reduced landfill waste by nearly 36%, exceeding its 2025 target of 30%. It has also achieved its 2025 goal of having Chain of Custody certification for 95% of its packaging. Fellow packaging company Ball Corporate also released its sustainability report this week, in which it announced it had raised the average recycled content of its products to 70% in 2023.

The Science Based Targets Network is reviewing submissions from the first batch of companies setting targets for nature – initially for freshwater and land. In an update on its website, the organisation said it expected to expand its “target validation services” to other companies later in the year, and will update its methods and supporting guidance. Starting next month, three unnamed corporates will pilot SBTN’s seafood targets.

Spanish energy firms Iberdrola and Repsol are engaged in a legal battle, after Iberdrola accused Repsol of greenwashing in a 107-page lawsuit. The former called on the latter to remove advertising campaigns related to biofuels and green hydrogen, and alleged that Repsol was overemphasising its green credentials in order to secure a competitive advantage. Repsol, which had two adverts banned by the UK’s advertising standards agency last year, denies the claims.

Meanwhile, Dutch airline KLM has lost a 2022 greenwashing lawsuit. NGOs accused the firm of misleading consumers by suggesting it was fighting climate change, but not mentioning its plans to grow air traffic. A Dutch court ruled that KLM was unlawful in its advertising and painted “too rosy a picture” about its commitment to the Paris Agreement.