Our point of view on recent events
The Global Reporting Initiative (GRI): 2010 Amsterdam Global Conference on Sustainability and Transparency (26–28 May 2010) More than 1200 leaders representing consulting and accounting firms, rating agencies, corporations, governments and academia attended the GRI’s recent Global Conference on Sustainability and Transparency. Steve Starbuck, Americas Leader of Climate Change and Sustainability Services, reports on key events and messages.
Sustainable development linked to the future of economic systems
There was general agreement that both sustainable development and the future of our economic systems depend on ecosystem health. The ability to accurately measure and value natural capital in our economic systems is now generally considered to be a vital step. Attendees from around the world discussed the importance of new impact data, and how new research demonstrates the real economic value of ecosystem services. For financial services organizations, the theme was consistent: companies having robust sustainability reporting outperform their peers.
Two important issues
Much of the discussion about sustainability reporting noted that, while complex, it was not an impossible task. Two Important issues were:
- How to integrate financial and non-financial reporting?
Participants discussed the urgency of reporting information on key aspects of sustainability performance (economic, social and environment) and how to integrate them into business reporting and business models. Speakers and participants emphasized that integrated reporting is not merely slapping two reports together (one financial, one non-financial); it is a process to demonstrate how sustainable development strategies can actually improve the business. Ratings agency participants stressed that integrated reporting is now necessary to get a total picture of an organization’s responsibilities.
- Who verifies the information in a sustainability report? Accounting firms? Specific consultancies? Non-governmental organizations (NGOs)?
A panel of professors had researched the topic and found a wide variety of assurance providers. In evaluating the quality of the reports being assured, they noted a wide variance, with reports assured by accounting firms having a relatively strong quality rating. The study indicated that, of the top 250 global organizations, 147 now produce sustainability reports, and 82 of these have the reports assured. Much discussion centered on upgrading assurance activity to make sustainability reports more consistent.
No return to business as usual
Attendees from around the world considered the importance of new research that demonstrates the real economic value of ecosystem services. They also discussed how the financial crisis has emphasized the importance of long-term over short-term sustainability goals. In the words of one keynote speaker, “Ethics are back.”
Many panelists talked about the need for businesses to develop new models based on a resource- and carbon-constrained world.Integrated reporting of sustainability performance was often cited as one way to align complex climate change and sustainability-related risks and opportunities with an organization’s broader strategies.
Readers and Reporters Survey 2010
Conferees debated the initial outcomes of the conference’s Readers and Reporters Survey 2010. In addition to the actual reporting organization (Reporters), the audience for sustainability reports (Readers) includes investors, NGOs, suppliers, buyers, consumers, governments and regulators.
The initial fact sheet focused on the following three questions, based on the consensus that sustainability reporting generally needs to become more connected to an organization’s overall corporate strategy:
- Why should an organization report?
Over 70% of both readers and reporters agree the primary reason to report is “to account for an organization’s sustainability performance.” “Improving internal processes” was a close second choice, selected by 75% of readers and 65% of reporters.
- Is sustainability reporting merely a form of “green washing”?
Ninety percent of readers strongly disagree, demonstrating that robust reporting is a trusted information channel. The survey outcomes showed that the top factors for increasing trust include: - Presenting robust data which proves progress
- Having a track record of actual actions
- Establishing a clear link between sustainability and core strategies
- Is sustainability reporting affecting real change?
When done effectively, 98% of readers agree that reporting improves an organization’s performance over time. Also, half of the readers surveyed agreed they use reporting to “inform decisions to invest/divest in the organization.” More than half of the readers also use the information they read to decide on a purchase, service or relationship with that organization, and 41% stated that reporting affects their consumer behavior.
In the fall of 2010, the GRI will add to these initial findings with a Survey Report that will provide an in-depth analysis of the opinion and characteristics of current readers and reporters.
Supply chain programs
Sustainable supply chain management was discussed in a number of panels. There were many different approaches to dealing with suppliers. However, all agreed that successful supplier programs need to be collaborative. One panelist from the retail industry talked about how his company offers incentives to its suppliers to participate in its supplier program. He emphasized the relationship needed to be a “flexible commitment.”
Reporting continues to grow
The number of reporters using the GRI guidelines has reached a record high, growing by more than 50% in the period since the last conference. Participants at the global meeting in Amsterdam believe that sustainability reporting is here to stay, and organizations that focus on quality reporting of their sustainable performance, both internally and externally, will be positioned to reap the benefits in the new low-carbon global economy.
