Trends in Sustainability Reporting

Sustainability and corporate responsibility are buzz words in the news, especially sustainability reporting, but what are the actual business trends?

Marjolein Baghuis, the Director of Communications & Network Relations at the Global Reporting Initiative (GRI), answered this during the 2degrees webinar “Trends in Sustainability Reporting.”  The main point of her presentation was that sustainability reporting has continued to rise.  Here are a few statistics:

• 95% of the largest global companies report on sustainability. The remaining 5% are companies mainly from the U.S.
• 70% of companies that have sustainability reports use GRI guidelines.
• Reporting uptake around the world:

What are the trends in sustainability reporting (according to the KPMG International Corporate Responsibility Survey 2011)?

• Reporting is raising the bar on data integrity.
• Corporate responsibility has become the de facto law for companies and investors and enhances financial value.
• Leading companies make the most of assurance.
• Integrated reporting (the combination of financial and sustainability reporting) is a trend.
• Companies not yet reporting on their corporate responsibility activities are under significant pressure to start not only to stay competitive, but also to gain a better understanding of how corporate responsibility activities affect and benefit their business and strengthen their core strategy.

What are the most common reasons that companies choose to report on sustainability?

Baghuis also discussed the latest GRI reporting guidelines (G4), which are in the exposure draft phase and will be released in May 2013. The objectives of G4 are:

• To be user friendly for beginners and experienced reporters.
• To improve the technical quality with clearer definitions.
• To align with other reporting frameworks.
• To offer guidance that leads to material reports.
• To offer guidance on how to link sustainability reporting and integrated reporting.
• To provide support to improve data searching (XBRL).

Baghuis encouraged webinar attendees to visit the GRI website and provide input on the GR4 exposure draft from now until September 25, 2012.

To view the “Trends in Sustainability Reporting” webinar, visit the 2degrees website.

Based upon our experience, we concur with 2degrees findings. With the opportunity to leverage sustainability as a management tool, companies can gain a better understanding of their current social, environmental, and economic impacts on the world and where they can improve their performance and find opportunities to innovate.  Given the number of U.S. companies who have not yet adopted sustainability reporting, the opportunity for continued growth in the U.S. is enormous.  Further, we strongly encourage reporters to utilize the Global Reporting Initiative as they begin their process.  As the first GRI-certified trainer in the U.S. and consultant to many first-time reporters, we have witnessed first-hand the many benefits our clients have derived.

By Brittany VanderBeek, Intern

Integrated Reporting – thoughts and recommendations

On June 29, Principal and Co-owner Barb Brown had the privilege of attending the New York Roundtable Meeting of the International Integrated Reporting Committee (IIRC). Before the meeting we created a survey to solicit insights on the importance of integrated reporting. The participants provided us valuable feedback that we were able to share with the constituents at the IIRC meeting, and we’re pleased to share our thoughts on the meeting and high-level survey results with you.

We were honored to participate in the Roundtable alongside many thought leaders in this field, including Paul Druckman (Accounting for Sustainability), Bob Eccles (co-author of OneReport and Harvard professor), Dina Dublon (Independent Director of PepsiCo, Accenture and Microsoft Perspective) and others.  The IIRC’s stated goals are to raise awareness around integrated reporting, develop a comprehensive framework for integrated reporting, and help companies along this journey.  Several speakers gave their perspectives on the notion of integrated reporting, the majority of which reinforced stakeholders’ desire to understand the material link of environmental, social and governance (ESG) issues to financial performance.  This led to a discussion emphasizing the need for a clear standard around materiality which factors in how externalities, such as the lack of pricing mechanisms around carbon and water, impact an organization’s ability to adequately report on these issues.

The program was both interesting and provocative with the IIRC openly seeking pilot companies to help co-create what integrated reporting might become.  The IIRC plans to release a discussion paper within the next few weeks, the content of which we will share with you.  From our perspective, it remains clear that integrated reporting is in the very nascent stages of development.  Seasoned sustainability reporters, most likely companies within the Global 250, will be the first to consider this avenue for future reporting.  For first-time or small and mid-cap reporters, we would continue to recommend the Global Reporting Initiative (GRI) Framework.  When used as a management process, we believe the GRI is an effective tool for organizations to identify and manage their material ESG impacts.  We are also enthusiastic about the development of GRI’s G4 reporting framework, and are confident it will lead to more effective sustainability reporting until a truly integrated reporting solution is established by the IIRC.

To view the survey results please click here.