More fluff in sustainability reports, study finds

This story is about corporate sustainability reporting, not home energy upgrades, so it does not point to anything for you to do at home.

A study from the University of Chicago Law School looked at more than 15,000 sustainability reports from 2,100 large companies. Researchers used an AI language model to check the reports for which standards companies followed, how specific the language was, and a "fluff ratio" — the share of vague, meaningless sentences like "our aim is to be a leader in the industry." They found that the number of companies publishing these reports jumped after 2015, along with use of common frameworks from groups like CDP and the Global Reporting Initiative. But quality didn't keep pace: reports became less quantitative and less specific over time, even as more companies joined in.

Companies that had been reporting longer did produce somewhat more concrete reports, but the researchers say that's mostly because they cut back on filler language, not because their numbers got sharper. Neither long-time reporters nor newer ones improved much on including hard, measurable data.

A financial accounting researcher at the University of Cologne offered a partial counterpoint: more narrative text isn't necessarily hype, since companies often need more words to explain their methods and assumptions as disclosures expand. The real issue, he said, is whether that growing pile of text makes the useful, concrete information easier or harder to find.