Sustainability Reporting and the Global Reporting Initiative
Mark A. Cohen Senior Associate Dean Justin Potter Professor of American Competitive Business Owen Graduate School of Management Vanderbilt University
www.globalreporting.org
Outline of Talk
History of Sustainability Reporting Important drivers of reporting GRIs Mission History & Organizational Structure of GRI Products available on GRI website Growing acceptance of GRI Value to Librarians Questions?
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Origins of Sustainability Reporting
Toxic Release Inventory (TRI)
Effect of TRI on Stock Price of Firms
Responsible Care/Chemical Industry Coalition for Environmentally Responsible Economies (CERES) Investor Responsibility Research Center (IRRC)
Emissions Efficiency Index (S&P 500) Collected Government Penalty Data, etc.
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Growth in reporting
1988 first US report (Polaroid)
By 1994 => over 100 in US By 2004 => hundredsaround world
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Growth in demand
Growth in demand
NGOs Government Financial Community (esp. SRI)
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Need for standardization
Financial Data
GAAP Accounting standards Securities and Exchange Commission
Sustainability Data
Difficult if not impossible for average investor to decipher & compare. Difficult for companies & NGOs to benchmark
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Investor demand for CSR data
Dow Sustainability Index Calvert Group
www.sustainability-indexes.com
www.calvert.com
Innovest Investment Advisors
www.innovestadvisors.com
Sustainable Asset Management
www.sam-group.com
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Carbon Disclosure Project
95 Institutional investors (> $10 trillion in assets) Info Request to FT500 Global Index
Risks & Opportunities from Climate Change
http://www.cdproject.net/
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GRIs mission
a generally accepted global framework for sustainability reporting
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GRI mission
Elevate economic, environmental and social reporting to routine practice, at the highest standards of rigour and comparability. Design and continually improve reporting guidelines reflecting the three dimensions of sustainability: economic, environmental, and social.
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the GRI way:
process
approach
products
multistakeholder consultation learning forum continuous improvement
triple bottom line global multistakeholder
core guidelines protocols sector supplements resource documents
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GRI brief history:
conceived 1997 : CERES & UNEP 1st draft Guidelines released 1999 formally launched 2002 Official recognition at WSSD (Article 18 and 45) Amsterdam-based permanent Secretariat (Sept. 2002)
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GRI governance
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stakeholder council composition
60 sc members:
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22 Business 16 Mediating Institutions 16 Civil Society/Advocacy 6 Labor Africa Asia/Pacific West Asia Europe/North America Latin America/Caribbean
across 5 regions:
global uptake: GRI reporters (per country)
Israel, Portugal 1 Japan 78 United States of America 46 Australia 20 South Africa 19 Netherlands 14 Italy, Switzerland 6 Brazil, New Zealand Costa Rica, 4 Malaysia, Thailand 3 Finland 9 Canada, Sweden 13 Germany 19 France 22 Spain 23 United Kingdom 49 Argentina, Mauritius 1 Belgium, Ireland 2 Austria , Denmark 3
Chile, China, India, Hungary, Norway 2
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GRI products
GRI sector supplement s-Tour if available
operators -FS-social -Telecom -Automotive
GRI
all organisations
2002 reporting guidelines
GRI technical protocols: -Energy use -Water use
if preferred
GRI resource documents: -HIV/AIDS
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May 2003
Economic Performance indicators
Total sales by market Goods, services purchased by country Total payroll & benefits by country Taxes paid by country Infrastructure spending (e.g. schools, roads)
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Examples of Environmental Performance indicators
Material usage Waste by type and destination Energy consumption Renewable energy sources used Water usage Biodiversity indicators Greenhouse gas emissions Discharges to water Significant spills of chemical, oil Penalties paid
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Examples of Social Performance indicators
Workforce by country, type of employment Employment creation & turnover Percent union representation Layoff notification policies Health & Safety record Hours training & education for employees EEO policies Child labor practices Policies to evaluate suppliers/contractors Political contributions Customer safety & health
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business recognition
the GRI and AA1000 are your best bets, not only for reporting, but for building structured models for transparency-driven stakeholder engagement.
Don Tapscott and David Ticoll, The Naked Corporation How the Age of Transparency Will Revolutionize Business, (2003)
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official recognition by government
The European Parliament highlights the importance, as stressed by the Commission, of building trust and consensus and support for internationally accepted principles such as the OECD Guidelines for Multinational Enterprises and the Global Reporting Initiative (GRI).
European Parliament Report on Corporate Social Responsibility (Final A5-0133/2003), April 2003
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market recognition
Investors cannot make judgments about the way business is managing sustainability and corporate responsibility issues unless companies disclose relevant information. Overall, we view the GRI as setting the global benchmark for disclosure and encourage companies to produce reports which are in accordance with the GRI guidelines.
SRI Annual Report, Henderson Global Investors, May 2003
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Increase GRI reporting
2005 Target 600+
700 600 500 400 300 200 100 0 1999 2000 2001 2002 2003 2004 2005
As of 6 January 2004: 380 reporters from 33 countries
380+
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In Accordance With
Reporters who use GRI Guidelines
380
Reporters who are In Accordance With GRI Guidelines
Approx 80 Must report or explain all key indicators
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global : GRI reporters (per sector)
Utilities/Community Transportation Services Other Non-Profit Industrial ICT Health Care Financial Energy Diversified Consumer Non-Cyclical Consumer Cyclical Basic Materials 0 10 20 30 40 50 60 70
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GRI non-business reporters
Organisation Australia Commonwealth Department of Family & Community Services (FaCS) International Institute for Sustainable Development Landcare Australia Manaaki Whenua Landcare Research New Zealand's Ministry for the Environment NHS Purchasing and Supply Agency Reckitt Benckiser University of Florida Category Government General Environment Government Government Government Academic Academic Country Australia Canada Australia New Zealand New Zealand U.K. U.K. United States
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GRI sector supplements
Tour operators Financial services Telecommunications Automotive (draft) Others in various stages
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Value to Librarians
Corporate
Benchmarking of competition Design of corporate reports Screening of suppliers
Business School
Classes in marketing, corporate social responsibility, regulation/law
Other ?
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Questions?
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