Thursday, June 21, 2007

Sustainability reporting: niche or mainstream?

The Global Reporting Initiative was founded on a simple premise: That greater transparency on the part of organizations about their economic, environmental, and social performance would result in a shift towards better performance in these areas over time. It is still too early to tell whether or not this premise which seems strong in theory is actually panning out in practice.

Since we don't yet have proof, this reporting-changing-behaviour question is the topic of much conversation and speculation in GRI circles. Just yesterday we had some guests in from ACCA (accounting association) and KPMG (accounting services) and sure enough, the conversation creeped in this direction.

It started when someone at the table said that there were an estimated 80,000 multinational enterprises in the world (UNCTAD estimates) and that only about 2000 at most had started with reporting. Hence, even if reporting did change behaviour we were looking at a drop in the bucket.

But someone else countered with a very different perspective. He claimed that the 500 largest companies on earth were responsible for generating 70% of the volume of the global economy. 75% produce some sort of sustainability report, and nearly all of the largest 100 do extensive reporting. If reporting is resulting in changed behaviour at these organiztions it can be said that reporting has already had an impact on sustainability due to the high volume of economic power they pack.

What is your perspective?

1 comment:

Stephen said...

Hi Alyson

Interesting point -- is it really working? I wonder that as well.

One of the things I have noticed is that there are several rating systems (such as the GRI's application levels) that grade the CSR report on how comprehensive its reporting is.

However, are there any rating systems that have been implemented on a large scale that grade companies on the actual performance, either on a year to year basis, or comparing them across their sector. I have a few SRI funds that will come out with a "top 10 companies" or variation of this, but usually the only cover select companies, and their methodology and research methods are not transparent (ironically enough).

This would be a good starting place to see if the improved reporting is a catalyst for change.