Sustainability – reality or illusion?

03 Sep, 2018
 
A family plants trees

Companies are increasingly relying on sustainability images to tell a story in their annual reports but often the feel-good photographs don't match reality.

AUT Business School researchers Dr Sabrina Chong, Dr Anil Narayan and Irshad Ali analysed the use of photographs in company annual reports between 2005 and 2015, finding a 38% increase in the number of sustainability-related photographs across the ten years. In contrast, the total number of photographs only increased by 10% during the same period.

The researchers say photographs of happy, contented staff and customers, innocent-looking children, smiling families, alongside the conventional images of sustainability – blue skies, fresh water and sunshine – had the potential to take emotional advantage of the readers and influence their perception about the companies’ sustainability performance.

“Photographs are often perceived to represent reality but can be used to distort reality as well. Readers of corporate information need to be careful in believing what they see in the sustainability-related photographs,” says Dr Chong.

Many companies are going beyond the statutory reporting information and using the glossy annual reports as a marketing opportunity. In 2015, 64% of the sustainability-related images depicted product responsibility.

For example, repeated use of images with “self-promotion” messages such as photos of sophisticated or hygienic production processes show companies placed utmost importance to customer health and safety, or images of diverse workers or customers show the company’s internalised non-discrimination policy.

“Investors should read the annual reports carefully before making an investment decision,” Dr Chong says.

“Companies need to be more accountable in using sustainability-related photographs in accounting reports. Those photographs should portray reality as opposed to being used as a strategy for greenwashing. Regulators and policymakers could promote sustainability reporting guidelines to help improve the quality of accounting reports.”

The purpose of the research is to find out the extent sustainability-related photographs are used in accounting reports and the possible hidden motives for companies to do so. The next phase will be to develop a visual persuasion framework to examine the power sustainability-related photographs have to influence.

Key findings

4,933 photographs in the annual reports released by 70 NZX-listed companies in 2005, 2010 and 2015 were analysed.

38% increase in sustainability-related photos between 2005 and 2015.

In the 10 year study period the total number of photos only increased by 10%.

64% of the sustainability-related photos focused on product responsibility, either showing a diverse workforce and consumers enjoying the product, or images of high-tech and hygienic production processes.