www.globalreporting.org mark a. cohen senior associate dean justin potter professor of american...

www.globalreporting.org

Mark A. CohenMark A. Cohen

Senior Associate DeanSenior Associate Dean

Justin Potter Professor of American Competitive BusinessJustin Potter Professor of American Competitive Business

Owen Graduate School of ManagementOwen Graduate School of Management

Vanderbilt UniversityVanderbilt University

Sustainability Reporting and the Sustainability Reporting and the Global Reporting InitiativeGlobal Reporting Initiative

www.globalreporting.orgwww.globalreporting.org 22

Outline of Talk…Outline of Talk…

History of Sustainability ReportingHistory of Sustainability Reporting Important drivers of reportingImportant drivers of reporting GRI’s MissionGRI’s Mission History & Organizational Structure of GRIHistory & Organizational Structure of GRI ““Products” available on GRI websiteProducts” available on GRI website Growing acceptance of GRIGrowing acceptance of GRI Value to Librarians…Value to Librarians… Questions?Questions?


Origins of Sustainability Reporting…Origins of Sustainability Reporting…

• Toxic Release Inventory (TRI)Toxic Release Inventory (TRI) Effect of TRI on Stock Price of FirmsEffect of TRI on Stock Price of Firms

• Responsible Care/Chemical IndustryResponsible Care/Chemical Industry• Coalition for Environmentally Coalition for Environmentally

Responsible Economies (CERES)Responsible Economies (CERES)• Investor Responsibility Research Center Investor Responsibility Research Center

(IRRC)(IRRC) Emissions Efficiency Index (S&P 500)Emissions Efficiency Index (S&P 500) Collected Government Penalty Data, etc. Collected Government Penalty Data, etc.


Growth in reporting…Growth in reporting…

1988 first US report (Polaroid)1988 first US report (Polaroid)

• By 1994 => over 100 in USBy 1994 => over 100 in US

• By 2004 => hundreds…around worldBy 2004 => hundreds…around world


Growth in demand…Growth in demand…

Growth in demandGrowth in demand

• NGOsNGOs

• GovernmentGovernment

• Financial Community (esp. SRI)Financial Community (esp. SRI)


Need for standardization…Need for standardization…

Financial Data Financial Data • GAAP Accounting standardsGAAP Accounting standards• Securities and Exchange CommissionSecurities and Exchange Commission

Sustainability DataSustainability Data• Difficult if not impossible for average Difficult if not impossible for average

investor to decipher & compare.investor to decipher & compare.• Difficult for companies & NGOs to Difficult for companies & NGOs to

benchmarkbenchmark


Investor demand for CSR data…Investor demand for CSR data…

Dow Sustainability IndexDow Sustainability Index• www.sustainability-indexes.comwww.sustainability-indexes.com

Calvert GroupCalvert Group• www.calvert.comwww.calvert.com

Innovest Investment AdvisorsInnovest Investment Advisors• www.innovestadvisors.comwww.innovestadvisors.com

Sustainable Asset ManagementSustainable Asset Management• www.sam-group.comwww.sam-group.com


Carbon Disclosure Project…Carbon Disclosure Project…

95 Institutional investors (> $10 95 Institutional investors (> $10 trillion in assets)trillion in assets)

Info Request to FT500 Global IndexInfo Request to FT500 Global Index• Risks & Opportunities from Climate Risks & Opportunities from Climate

ChangeChange http://www.cdproject.net/http://www.cdproject.net/


GRI’s missionGRI’s mission

a generally accepted a generally accepted global framework for global framework for

sustainability sustainability reportingreporting


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 missionGRI mission


the GRI way:the GRI way:

approachapproach triple bottom triple bottom

lineline globalglobal multi-multi-

stakeholderstakeholder

processprocess multi-multi-

stakeholder stakeholder consultationconsultation

learning forumlearning forum continuous continuous

improvementimprovement

productsproducts core guidelinescore guidelines protocolsprotocols sector sector

supplementssupplements resource resource

documentsdocuments


GRI brief history:GRI brief history:

conceived 1997 : CERES & UNEPconceived 1997 : CERES & UNEP 11stst draft Guidelines released 1999 draft Guidelines released 1999 formally launched 2002formally launched 2002 Official recognition at WSSD (Article 18 Official recognition at WSSD (Article 18

and 45)and 45) Amsterdam-based permanent Amsterdam-based permanent

Secretariat (Sept. 2002)Secretariat (Sept. 2002)


GRI governance GRI governance


stakeholderstakeholder council composition council composition

60 sc members:60 sc members:• 22 Business 22 Business • 16 Mediating Institutions16 Mediating Institutions• 16 Civil Society/Advocacy16 Civil Society/Advocacy• 6 Labor6 Labor

aacross 5 regions:cross 5 regions:• Africa Africa • Asia/PacificAsia/Pacific• West AsiaWest Asia• Europe/North AmericaEurope/North America• Latin America/CaribbeanLatin America/Caribbean

The Council

CSO AdvocacyBusiness

Mediating Institutions

Labour


global uptake: GRI reporters global uptake: GRI reporters (per country)(per country)

Austria , Denmark 3

Finland 9

Canada, Sweden 13

Germany 19

France 22

Spain 23

Japan 78

United States of America 46

Australia 20

South Africa 19

Netherlands 14

Italy,Switzerland 6

Brazil, New Zealand

4Costa Rica,

Malaysia,Thailand 3

Chile, China, India,

Hungary, Norway 2

United Kingdom 49

Argentina, Mauritius 1

Belgium, Ireland 2

Israel,Portugal 1

www.globalreporting.orgwww.globalreporting.org 1616 16 May 2003

GRI productsGRI products

GRI sector supplements-Tour operators-FS-social-Telecom -Automotive

GRI sector supplements-Tour operators-FS-social-Telecom -Automotive

GRI2002reportingguidelines

GRI2002reportingguidelines

GRI technical protocols:-Energy use-Water use

GRI technical protocols:-Energy use-Water use

GRI resource documents:-HIV/AIDS

GRI resource documents:-HIV/AIDS

if preferred

if available

all organisations


Economic Economic Performance indicatorsPerformance indicators

Total sales by marketTotal sales by market Goods, services purchased by Goods, services purchased by

countrycountry Total payroll & benefits by country Total payroll & benefits by country Taxes paid by countryTaxes paid by country Infrastructure spending (e.g. schools, Infrastructure spending (e.g. schools,

roads)roads)


Examples of Environmental Examples of Environmental Performance indicatorsPerformance indicators

Material usageMaterial usage Waste by type and destinationWaste by type and destination Energy consumptionEnergy consumption Renewable energy sources usedRenewable energy sources used Water usageWater usage Biodiversity indicatorsBiodiversity indicators Greenhouse gas emissionsGreenhouse gas emissions Discharges to waterDischarges to water Significant spills of chemical, oilSignificant spills of chemical, oil Penalties paidPenalties paid


Examples of Social Examples of Social Performance indicatorsPerformance indicators

Workforce by country, type of employmentWorkforce by country, type of employment Employment creation & turnoverEmployment creation & turnover Percent union representationPercent union representation Layoff notification policiesLayoff notification policies Health & Safety recordHealth & Safety record Hours training & education for employeesHours training & education for employees EEO policiesEEO policies Child labor practicesChild labor practices Policies to evaluate suppliers/contractorsPolicies to evaluate suppliers/contractors Political contributionsPolitical contributions Customer safety & healthCustomer safety & health


business recognitionbusiness recognition

“… “… the GRI and AA1000 are your best the GRI and AA1000 are your best bets, not only for reporting, but for bets, not only for reporting, but for building structured models for building structured models for transparency-driven stakeholder transparency-driven stakeholder engagement.” engagement.”

Don Tapscott and David Ticoll, The Naked Corporation – How the Don Tapscott and David Ticoll, The Naked Corporation – How the Age of Transparency Will Revolutionize Business, (2003)Age of Transparency Will Revolutionize Business, (2003)


official recognition by governmentofficial recognition by government

““The European Parliament … highlights The European Parliament … highlights the importance, as stressed by the the importance, as stressed by the Commission, of building trust and Commission, of building trust and consensus and support for internationally consensus and support for internationally accepted principles such as the OECD accepted principles such as the OECD Guidelines for Multinational Enterprises Guidelines for Multinational Enterprises and the Global Reporting Initiative (GRI).” and the Global Reporting Initiative (GRI).”

European Parliament Report on Corporate Social European Parliament Report on Corporate Social Responsibility (Final A5-0133/2003Responsibility (Final A5-0133/2003), April 2003), April 2003


“ “ Investors cannot make judgments about Investors cannot make judgments about the way business is managing the way business is managing sustainability and corporate responsibility sustainability and corporate responsibility issues unless companies disclose relevant issues unless companies disclose relevant information. … information. …

Overall, we view the GRI as setting the Overall, we view the GRI as setting the global benchmark for disclosure and global benchmark for disclosure and encourage companies to produce reports encourage companies to produce reports which are in accordance with the GRI which are in accordance with the GRI guidelines.”guidelines.”

SRI Annual Report, Henderson Global Investors, May 2003SRI Annual Report, Henderson Global Investors, May 2003

market recognitionmarket recognition


Increase GRI reportingIncrease GRI reporting

0

100

200

300

400

500

600

700

1999 2000 2001 2002 2003 2004 2005

380+

2005 Target 600+

As of 6 January 2004:380 reporters from 33 countries


““In Accordance With…”In Accordance With…”

Reporters who use GRI GuidelinesReporters who use GRI Guidelines• 380380

Reporters who are “In Accordance Reporters who are “In Accordance With GRI Guidelines”With GRI Guidelines”• Approx 80Approx 80• Must report or “explain” all key Must report or “explain” all key

indicatorsindicators


global : GRI reporters (per global : GRI reporters (per sector)sector)

0 10 20 30 40 50 60 70

Basic MaterialsConsumer Cyclical

Consumer Non-CyclicalDiversified

EnergyFinancial

Health CareICT

IndustrialNon-Profit

OtherServices

TransportationUtilities/Community


GRI non-business reportersGRI non-business reporters

Organisation Category Country

Australia Commonwealth Department of Family & Community Services (FaCS) Government Australia

International Institute for Sustainable Development General Canada

Landcare Australia Environment Australia

Manaaki Whenua Landcare Research Government New Zealand

New Zealand's Ministry for the Environment Government New Zealand

NHS Purchasing and Supply Agency Government U.K.

Reckitt Benckiser Academic U.K.

University of Florida Academic United States


GRI sector supplementsGRI sector supplements

Tour operatorsTour operators Financial servicesFinancial services TelecommunicationsTelecommunications Automotive (draft)Automotive (draft) Others in various stagesOthers in various stages


Value to LibrariansValue to Librarians

Corporate Corporate • Benchmarking of competitionBenchmarking of competition• Design of corporate reportsDesign of corporate reports• Screening of suppliersScreening of suppliers

Business School Business School • Classes in marketing, corporate social Classes in marketing, corporate social

responsibility, regulation/lawresponsibility, regulation/law Other ?Other ?


Questions?Questions?

www.globalreporting.org mark a. cohen senior associate dean justin potter professor of american...

Documents

sri slide

origins of sustainability

investor demand

demand growth

hundredsaround world

acceptance of gri value

gri website products

average investor