So, where does this leave us? If you are an investor, it’s likely good news for you. More information can help you make better investment decisions by bringing to light risks and opportunities companies are facing.

From a capital markets perspective, it is difficult for investors to shift financial resources to more sustainable firms without the information sustainability reporting provides.

On the other hand, concerns about the trustworthiness of corporate reporting could hinder efforts to direct funds toward addressing social issues. Lululemon is currently under investigation by Canada’s Competition Bureau following complaints about greenwashing.

Amendments were recently made to Canada’s Competition Act to crack down on corporate greenwashing. Some companies, like Cenovus Energy, believe the changes may disrupt their ability to report environmental initiatives because of uncertainty surrounding what is now allowed.

If you are a public policymaker, seeing a firm’s overall performance beyond its financial data can add valuable insights to regulatory debates. But whether sustainability reporting is likely to make a meaningful change largely depends on how serious a company is about making changes.

Douglas A Stuart is an Assistant Teaching Professor at the Gustavson School of Business at the University of Victoria. Irene Marie Herremans is a Professor at the Haskayne School of Business and School of Public Policy at the University of Calgary. This commentary first appeared in The Conversation.

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