sustainability cohen

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 Sustainability Reporting and the Global Reporting Initiative

Outline of Talk…: 

Outline of Talk… History of Sustainability Reporting Important drivers of reporting GRI’s Mission History & Organizational Structure of GRI “Products” available on GRI website Growing acceptance of GRI Value to Librarians… Questions?

Origins of Sustainability Reporting…: 

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.

Growth in reporting…: 

Growth in reporting… 1988 first US report (Polaroid) By 1994 => over 100 in US By 2004 => hundreds…around world

Growth in demand…: 

Growth in demand… Growth in demand NGOs Government Financial Community (esp. SRI)

Need for standardization…: 

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

Investor demand for CSR data…: 

Investor demand for CSR data… Dow Sustainability Index www.sustainability-indexes.com Calvert Group www.calvert.com Innovest Investment Advisors www.innovestadvisors.com Sustainable Asset Management www.sam-group.com

Carbon Disclosure Project…: 

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/

Slide9: 

GRI’s mission a generally accepted global framework for sustainability reporting

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. GRI mission

the GRI way:: 

the GRI way: approach triple bottom line global multi-stakeholder process multi-stakeholder consultation learning forum continuous improvement products core guidelines protocols sector supplements resource documents

GRI brief history:: 

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)

GRI governance : 

GRI governance

stakeholder council composition: 

stakeholder council composition 60 sc members: 22 Business 16 Mediating Institutions 16 Civil Society/Advocacy 6 Labor across 5 regions: Africa Asia/Pacific West Asia Europe/North America Latin America/Caribbean

global uptake: GRI reporters (per country): 

global uptake: GRI reporters (per country)

GRI products: 

16 May 2003 GRI products GRI sector supplements-Tour operators -FS-social -Telecom -Automotive GRI 2002 reporting guidelines GRI technical protocols: -Energy use -Water use GRI resource documents: -HIV/AIDS if preferred if available all organisations

Economic Performance indicators: 

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)

Examples of Environmental Performance indicators: 

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

Examples of Social Performance indicators: 

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

business recognition: 

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)

official recognition by government: 

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

Slide22: 

“ 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 market recognition

Increase GRI reporting: 

Increase GRI reporting 380+ 2005 Target 600+ As of 6 January 2004: 380 reporters from 33 countries

“In Accordance With…”: 

“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

global : GRI reporters (per sector): 

global : GRI reporters (per sector)

GRI non-business reporters: 

GRI non-business reporters

GRI sector supplements: 

GRI sector supplements Tour operators Financial services Telecommunications Automotive (draft) Others in various stages

Value to Librarians: 

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 ?

Slide29: 

Questions?