If the accounting and legal profession search for global standards then why not the growing area of sustainability reporting. Garry Fowler provides some definitions.
Is there a commonly accepted framework for sustainability reporting? This question is commonly asked by corporations needing to provide a report to their stakeholders on their economic, environmental and social performance. The Global Reporting Initiative (GRI) 2002 Sustainability Reporting Guidelines, released at the Earth Summit in Johannesburg in August, are the latest version of guidelines specifically developed by the GRI. Sometimes referred to as triple bottom line reporting, the term sustainability reporting is used throughout. The Guidelines are a framework for reporting on economic, environmental and social performance. They:
• outline reporting principles and content to help prepare organisation-level sustainability reports;
• help organisations gain a balanced picture of their economic, environmental and social performance;
• promote comparability of sustainability reports;
• support benchmarking and assessment of sustainability performance;
• serve as a key tool in the overall process of stakeholders engagement.
They can be used simply as an informal reference document to assist them in developing a framework and indicators for measurement and reporting in an environmental fashion. Alternatively the organisation may choose to adopt them and prepare their report "in accordance" with the Guidelines. GRI recognises the complexity of implementing a sustainability reporting program and the need for many organisations to build their reporting capacity in an incremental fashion. Such organisations may choose not to prepare a complete GRI based report in their initial effort. Instead, they may choose a step by step approach to adopting the guidelines over a period of time. The GRI was established in 1997 with the goal of enhancing the quality, rigour and utility of sustainability reporting. The initiative has enjoyed the active support and engagement of representatives from business, NGOs, accounting bodies, investor organisations, and trade unions. Together these different constituencies have worked to build a consensus around a set of reporting guidelines with the objective of obtaining worldwide acceptance.
The guidelines are structured into an introduction, followed by four parts – Part A, using the GRI; Part B, reporting principles; Part C, report content; Part D, glossary and annexures.
Using the Guidelines
This section provides general guidance on the use of the Guidelines. It cover topics such as "What is a GRI Sustainability Report", the Relationship to Shareholders Dialogue and Who should use the Guidelines. The Guidelines document is the foundation document, and will be supplemented by sector supplements, issue guides documents and technical protocols. As of June 2002 section supplements were available for tour operators and financial services (social performance indicators only). Automotive and telecommunications sector supplements are under development. The 2002 Guidelines contain two categories of performance indicators:
• Core Indicators – which are relevant to assist organisations and of interest to most stakeholders.
• Additional Indicators – which organisations are encouraged to experiment with.
This section identifies 11 reporting principles regarded as essential to producing a balanced and reasonable report. The principles are transparency, inclusiveness, auditability, completeness, relevance, sustainability context, accuracy, neutrality, comparability, clarity and timeliness.
This section specifies the five sections of a GRI-based report:
• Vision and strategy – describing the reporting organisations strategy with regard to sustainability, including a statement from the CEO.
• Profile – an overview of the reporting organisations structure and operations and the scope of the report.
• Governance structure and management systems – describing the organisational structure, policies and management systems, including stakeholder engagement efforts.
• GRI content index – a table supplied by the reporting organisation identifying where the information is located within its report.
• Performance indicators – measures of the impact or effect of the reporting organisation divided into integrated, economic, environmental and social factors.
Glossary and annexures
In addition to the glossary of terms used, this section includes a number of annexures:
• Annexure 1: Overview of the Global Reporting Initiatives
• Annexure 2: Linkages between Sustainability and Financial Reporting
• Annexure 3: Guidance on Incremental Application of the Guidelines
• Annexure 4: Credibility and Assurance
• Annexure 5: GRI Indicators
It is beyond the scope of this article to summarise each of these anexures which are quite detailed. They do however, provide comprehensive guidance.
A number of companies around the world have released reports indicating that they have referred to and followed the Guidelines. These include six Australian companies, namely Argyle Diamonds, City West Water, Loy Yang Power, Telstra, Westpac, and WMC. The Government is also developing social and environmental indicators for sustainability reporting through the Department of Family and Community Services and Environment Australia. The Guidelines are a highly developed reference source for those interested in public reporting of all or any of its environmental, social or economic performance.
A commitment to move to comprehensive reporting "in accordance with" the Guidelines should be entered into with caution in view of the comprehensiveness of information required. They do, however, provide an excellent reference for organisations embarking on the journey of reporting on any aspect of their sustainability performance. Note: The Guidelines can be downloaded from www.globalreporting.org
* Garry Fowler is an executive consultant to the Environmental and Sustainability Services Group of Ernst & Young and is a member of the AICD Sustainability Committee
Sustainability – a glossary for directors
Terms such as sustainability, corporate social responsibility, triple bottom line are increasingly finding their way into the company director's vocabulary. But what do they actually mean? Although there are no universally accepted definitions there are many examples of definitions developed for different purposes. The AICD Sustainability Committee has identified the need not only to explain its own title but also to collate a number of definitions of these terms. The definitions are examples only and there may be many other better or as frequently used examples. The Sustainability Committee thrives on debate and the free flow of information. It expects this list to generate many more examples and ideas from readers. Corporate citizenship involves coming to terms with the need for often radical internal and external changes, in order to better meet responsibilities to all stakeholders in order to establish and maintain sustainable success for the organisation and as a result of that success to achieve long term sustainable success for the community at large.
Corporate social responsibility is the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life. Sustainability/sustainable development. The most common definition of "sustainable development" provided by the Bruntland Report in 1987 describes it as development which meets the needs of the present without compromising the ability of future generations to meet their own needs. This definition is supported by the AICD for its Sustainability Policy Corporate sustainability is a business approach to create long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments. (Dow Jones Sustainability Index) Sustainable development involves the simultaneous pursuit of economic prosperity, environmental quality and social equity. Companies aiming for sustainability need to perform not against a single financial bottom line but against the triple bottom line.
Triple bottom line focuses corporations not just on the economic value they add, but also on the environmental and social value they add – and destroy. Essentially it is a framework for measuring and reporting corporate performance against economic, social and environmental parameters. At its broadest TBL is used to capture the whole set of values, issues and processes that companies must address in order to minimise and harm resulting from their activities and to create economic, social and environmental value.
The purpose of this database is to provide a full-text record of all articles that have appeared in the CDJ since February 1997. It is aimed to assist in the research and reference process. The database has a full-text index and will enable articles to be easily retrieved.It should be noted that information contained in this database is in pre-publication format only - IT IS NOT THE FINAL PRINTED VERSION OF THE CDJ - therefore there might be slight discrepancies between the contents of this database and the printed CDJ.
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