Rio+20 should adopt an approach to making sustainability reporting standard practice say leading business organizations

Source: Global Reporting Initiative, 15 June 2012

Leading business organizations are calling on governments to commit to concrete action at the Rio+20 Conference, encouraging all companies to start measuring and reporting sustainability performance and impacts. This, they say, will enable business to accelerate sustainability towards a Green Economy.
The Global Reporting Initiative (GRI), the World Business Council for Sustainable Development (WBCSD) and the Brazilian Business Council for Sustainable Development (CEBDS) are urging heads of delegations, ministers and heads of state to act now to make sustainability reporting standard practice – in particular, to encourage all listed and large (public and private) companies to report their sustainability performance on a report or explain basis.

Business plays a vital role in speeding up the transition towards a green economy. Realizing that there are risks and potentially competing impacts to consider, the transparent measurement and reporting of sustainability impacts of corporate activities must become standard business practice.

Ernst Ligteringen, Chief Executive of the Global Reporting Initiative (GRI): “For the past 15 years, leading companies have been reporting on their sustainability performance, benefiting the companies themselves, as well their diverse stakeholders and society. Today, thousands of companies release a sustainability report, and the number continues to grow year on year. At the 2002 Johannesburg conference, this practice was commended; the opportunity in Rio is to adopt policy to make this standard practice.”

Peter Bakker, president WBCSD: “Sustainability reporting is a strategic tool for companies big and small. What gets measured gets managed. The combination of the ever growing pressures on the availability and price of resources and the necessary move towards pricing externalities means that smart companies will want to understand their impacts. The question in Rio+20 is how can governments help accelerate the development and adoption of these tools and practices.”

Mrs. Marina Grossi, executive president of CEBDS: “We are convinced that reporting will trigger a strong multiplying process. The weight of big companies on their supply chain will spread this practice among its suppliers, providing benefits to a wide stakeholders network – that are also encouraged to follow their steps. Also, ‘Report or Explain’ presents an extra layer of accountability to those stakeholders and easiness to companies to adapt to this new scenario.”

Call for global policy framework

GRI, WBCSD and CEBDS are also calling for UN Secretary General Ban Ki-Moon to develop a process and a timeframe to establish a global policy framework to create the appropriate enabling conditions for more widespread sustainability reporting. In February this year, Ban Ki-moon stated that business and investors have a true opportunity to show leadership and contribute to the goal of mainstreaming corporate sustainability: “Let us work together to forge a global policy framework for disclosing such information – and for explaining why companies do not.”

This policy framework can be built on existing reporting initiatives. GRI produces a comprehensive sustainability reporting framework that is widely used around the world. WBCSD is the leading organization on sustainable development in business, and CEBDS is the Brazilian branch of the WBCSD network. Many WBCSD and CEBDS member companies are among the thousands worldwide already reporting their sustainability performance using the GRI Guidelines. In addition, the WBCSD has (co)developed reporting standards for Greenhouse Gases and Water, and the International Integrated Reporting Council has begun work on the linkages between an organization’s strategy, governance and financial performance and the social, environmental and economic context within which it operates.

Stock exchanges respond

As well as governments, stock exchanges have a role as regulators in encouraging more companies to be transparent and report their sustainability performance. Sao Paolo stock exchange BM&FBOVESPA and the Johannesburg Stock Exchange (JSE) are already working with their member companies to help business be more transparent, and have responded positively to today’s call.

Sonia Favaretto, Director Sustainability at BM&F BOVESPA, said: “BM&FBOVESPA understands how transparency in the provision of information is fundamental for markets to function well. Sustainability reports play a crucial role in this context. Our point of reference for this type of report is the GRI methodology. For this reason, at Rio+20 and in partnership with GRI we shall launch ‘Report or Explain’ in sustainability reports and similar. We believe that the publication of sustainability reports is a powerful instrument for the transformation of corporate management and culture.”

"Companies and investors face a new value reality given the challenges of sustainability. The JSE aims to positively influence our clients to build resilience and longevity, and to encourage increased transparency through our listing requirements and tools such as the SRI Index Series, and we support global efforts to promote transparency on material issues across financial, environmental and social dimensions, including through a report or explain approach to reporting," said Corli Le Roux, Head of the SRI Index and Sustainability at the Johannesburg Stock Exchange.