A new study from the University of the Basque Country (UPV/EHU) has found that major energy companies in the Euro area are failing to disclose the full extent of their impact on biodiversity. The research reveals that these companies conceal 47% of the damage caused by their activities, with only 23% of incidents being clearly reported in their sustainability reports.
Lack of Transparency in Sustainability Reporting
The study, conducted by the UPV/EHU’s Research Group on Circular Economy, Business Performance and Achievement of Sustainable Development Goals, analyzed 47 events related to 30 major energy companies. These events included cases of deforestation, electrocution of birds, and habitat destruction. Shockingly, 22 of these incidents were not mentioned at all in the companies’ sustainability reports.
Goizeder Blanco, the study’s author and a PhD student at the Faculty of Economics and Business, explains that while European directives require large companies to publish documents relating to the environment and biodiversity, the specific information to be included is not fully specified. This allows companies to act freely and soften their image by selectively reporting on their environmental impact.
Strategies Used to Neutralize Responsibility
The researchers found that in 30% of the adverse impacts analyzed, companies resorted to strategies to neutralize their responsibility. The most common technique was to emphasize positive actions and good aspects while downplaying the negative impacts.
For example, some companies plant palm oil trees in tropical areas to produce biofuels, which destroys local ecosystems. However, in their sustainability reports, they divert attention by highlighting the numerous trees they have planted in other areas. This does not compensate for the deforestation caused by their activities, as the plantations are often located far from the damaged sites.
Transparency also varies according to the type of event. Energy companies are more likely to accurately report on the electrocution of birds and incidents affecting indigenous communities. Blanco explains that it is more difficult to be non-transparent when humans are involved, as people can speak out, protest, and engage in confrontation. Additionally, companies face fines for bird deaths caused by power lines, making it easier to account for these incidents.
However, when it comes to more complex issues, such as the destruction and transformation of ecosystems, companies tend to conceal these events. For example, if a wind farm is built on the migratory corridor of a bird species, the effects are deeper and more difficult to measure, leading to less transparent reporting.
Why it matters: The UPV/EHU study highlights the need for greater transparency and accountability in the energy sector’s reporting of its impact on biodiversity. As the world faces a growing biodiversity crisis, it is crucial that companies accurately disclose the full extent of the damage caused by their activities. This research underscores the importance of stricter regulations and clearer guidelines for sustainability reporting to ensure that the public and policymakers have a complete picture of the environmental consequences of energy production.
