Half of the largest 250 companies in the world stated that sustainability reporting adds financial value to the company.
Photo: Global Reporting Initiative
Reporting for a Sustainable World
“Sustainability reporting helps companies think about their sustainability performance in a more strategic way. By measuring their impacts, companies can better manage their performance and identify areas for improvement. In the long term this contributes to the economy by making companies more competitive and successful, and to poverty reduction, sustainable development and human rights,” says Johan Åkerblom, Senior Advisor at Sida, which has provided GRI with core funding.
According to a KPMG survey, conducted in 2011, 95 per cent of the 250 largest companies in the world report on Corporate Social Responsibility (CSR) and 80 per cent of them use GRI’s Reporting Guidelines.
Furthermore, half of the largest 250 companies in the world stated that sustainability reporting adds financial value to the company. In other words, measuring and reporting the impacts a company has in areas such as gender, human rights, corruption, greenhouse gas emissions, water and energy use, also makes economic sense.
Inspired by the comparability of financial reporting, GRI has developed its Sustainability Reporting Framework – including the Guidelines and sector-specific guidance – which is used by thousands of companies and organisations all over the world:
“Financial reporting has been around for more than a century and became legally binding after the 1929 financial crash when governments realised the need to have companies provide accurate financial data. Today, and in most countries, private enterprises are required by law to report their financial status,” continues Teresa Fogelberg.
In comparison, sustainability reporting is very young. GRI was founded in 1997 and drew up the first Sustainability Reporting Guidelines in 2002. It is formally a non-profit organisation that enjoys strategic partnerships with the United Nations Environment Programme (UNEP), the UN Global Compact, the Organisation for Economic Co-operation and Development (OECD), the International Organization for Standardization (ISO), and many others. GRI’s Reporting Guidelines include more than 140 different disclosure items for sustainability-related topics.
“We work with a number of institutions and organisations. For example we use the Greenhouse Gas Protocol (http://www.ghgprotocol.org/) as a base reference for companies that use the GRI Guidelines to measure and report their greenhouse gas emissions. Save the Children helped us launch the guidelines, which include performance Indicators for reporting child labour,” explains Teresa Fogelberg.
GRI has offices – Focal Points – in South Africa, Australia, China, Brazil, USA and India. But there are still many countries, for instance in Africa, where sustainability reporting is not yet common:
“Still, in many countries, CSR is seen as a charity thing,” continues Fogelberg. “And many companies fail to understand the impact they can have on the local society. For example, there are companies that can say they are interested in promoting gender issues, and in proving this mention their programme for female education. But at the same time they do not recognise that the presence of their operations can for instance increase levels of prostitution.”
Since 2006 GRI has worked systematically to achieve a stronger presence and impact of reporting in developing countries, which is a priority for Sida. In 2010, GRI adopted a Sustainable Development Strategy entitled "Towards Sustainable Development: Multi-stakeholder Engagement and ESG Reporting in Developing Countries", to integrate the developing country focus into its main work agenda. The objective is to strengthen companies' governance on sustainability performances and impacts in the countries where they operate, as well as to increase transparency for investors and stakeholders.
Over the last six years GRI has provided sustainability reporting training to more than 10,000 participants and has Certified Training Partners in more than thirty developing countries.
One challenge with CSR reporting is the fact that reporting is voluntary and that companies sometimes do not give a full picture of the impact they have. When it is voluntary, and not consistent, it is quite difficult, or impossible, to compare performance between companies. Sometimes reports are cosmetic and it is still difficult to measure the influence reporting has on society.
More and more countries are making sustainability reporting obligatory. In Sweden the Government made it binding for state owned companies to report its impact on society using the GRI Guidelines. Denmark has gone further, making it mandatory for all the big companies (over 250 employees) to report their performance on sustainability issues. And if they do not report they have to explain why. Since 2011 all companies in France with more than 500 employees are by law required to report their social and environmental impact. South African companies listed on the Johannesburg Stock Exchange are also required to produce a report, or if not: explain why.
“For Sida, the partnership with GRI forms part of the programme for collaboration with the private sector, Business for Development, bringing the worlds of enterprise and international development cooperation together to drive a sustainable global economy,” says Johan Åkerblom.
GRI continues to improve the Sustainability Reporting Framework. In spring of 2013, following consultations with stakeholders all over the world, the fourth generation of the Guidelines – G4 – will be presented, In reviewing the Guidelines, GRI is specifically looking at making reporting more user-friendly, improving the technical quality, aligning more with other reporting mechanisms and reviewing how companies and organisations may improve reporting on the supply chain. All these elements will directly or indirectly have an impact on peoples’ livelihoods and poverty.
Support from Sida:
Main Development Objectives:
Main Development Results