The United Nations Conference on Trade and Development (UNCTAD) issued a report last month that examined the CSR practices of the world’s 100 largest transnational corporations (TNCs), as well as the sustainable investment practices of the world’s 100 largest institutional investors, according to an article published by SocialFunds.com today.
The report states that historically, CSR has been downplayed as an activity that is not core to a business’ operations. Although most of the largest TNCs issue CSR reports, the quality continues to vary widely. Though 86 of these companies report information on climate change, direct comparison of performance on climate change is difficult or impossible, as companies don’t report the same information or to the same extent, according to SocialFunds.com.
This lack of direct comparison has made it difficult for investors and other stakeholders to use the information to make key business decisions. Despite this fact, the widespread reporting of CSR gives policy makers the opportunity to address key development challenges. Further, the integrated reporting of ESG factors has given regulatory bodies the opportunity “to strengthen the mechanisms through which institutional shareholders are able to influence the ESG practices of the companies in which they invest” (SocialFunds.com).
However, only 13 of the 100 institutional investors publish an annual report on their sustainable investment policies and practices. “If institutional investors provided more comprehensive reporting” on their own sustainable investment policies and practices, as well as on the ESG practices of companies, “this could encourage improvements in TNC practices,” the report states.
Does GRI have a solution to the inconsistencies of the definitions of CSR, ESG and SRI? Will integrated reporting ever be mandatory? Will the work of the IIRC solve these issues? Discuss!
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