Mark A. Cohen

1
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

2
Outline of Talk

• History of Sustainability Reporting
• Important drivers of reporting
• GRIs Mission
• History Organizational Structure of GRI
• Products available on GRI website
• Growing acceptance of GRI
• Value to Librarians
• Questions?

3
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 (SP 500)
• Collected Government Penalty Data, etc.

4
Growth in reporting

• 1988 first US report (Polaroid)
• By 1994 gt over 100 in US
• By 2004 gt hundredsaround world

5
Growth in demand

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

6
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

7
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

8
Carbon Disclosure Project

• 95 Institutional investors (gt 10 trillion in
  assets)
• Info Request to FT500 Global Index
• Risks Opportunities from Climate Change
• http//www.cdproject.net/

9

• GRIs mission

• a generally accepted global framework for
  sustainability reporting

10
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.

11
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

12
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)

13
GRI governance
14
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

15
global uptake GRI reporters (per country)
16
GRI products
GRI sector supplements-Tour operators -FS-social -
Telecom -Automotive
if available
GRI 2002 reporting guidelines
GRI technical protocols -Energy use -Water use
all organisations
GRI resource documents -HIV/AIDS
if preferred
16
May 2003
17
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)

18
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

19
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

20
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)

21
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

22

market recognition

• 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

23
Increase GRI reporting
2005 Target 600
As of 6 January 2004 380 reporters from 33
countries
380
24
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

25
global GRI reporters (per sector)
26
GRI non-business reporters
27
GRI sector supplements

• Tour operators
• Financial services
• Telecommunications
• Automotive (draft)
• Others in various stages

28
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 ?

29

• Questions?