Sean Gilbert

1
Update of Global Reporting Initiative
July 27, 2004

• Sean Gilbert
• Associate Director, Technical Development

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sustainability reporting

• a growing trend
• what drives it ?
• how will you tell your story ?

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sustainability reporting

• Annual/bi-annual
• Summarize organisational TBL performance
• Performance outcomes of implementing policies
  and programs

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uptake of GRI framework
450 organisations 43 countries
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GRI reporters rewarded

• 7 of top 10 sustainability reporters (benchmarked
  by CSR Network) use the GRI Guidelines
• 29 of top 50 UNEP/SustainAbility Global Reporters
  are GRI reporters
• 34 of the companies listed in Dow Jones
  Sustainability Index World are GRI reporters

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sustainability reporting

• a growing trend
• what drives it ?
• how will you tell your story ?

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internal value
Which standards/forums are most influential on
business practice?
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e.g. the intangible value of
investor confidence
source SAM
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something is making a difference measuring the
value relevance of sustainability reporting

• Our analysis indicates that as a group, the
  publicly quoted GRI pioneers have, on average
  marginally lower share price volatility and
  higher operating profit margins despite slower
  revenue growth.

• Moreover, our analysis reveals that those
  companies which not only refer to the GRI
  guidelines when preparing their sustainability
  reports but publish a detailed GRI index have,
  on average substantially lower share price
  volatility and significantly higher profit
  margins with marginally higher revenue growth.
• February 2004

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Regulatory disclosures and stock exchanges

• Johannesburg Stock Exchange
• Adopted King II Code of Conduct, calls for
  sustainability reporting
• United Kingdom Operating Financial Review
• New legislation requires listed companies to
  disclose material environmental and social risks
• France Article 116
• Required environmental and social disclosure for
  listed companies
• United States Government Accounting Office
• Calls for reform of SEC rules

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customer loyalty
Percentage saying they Agree or Strongly
Agree
9 out of 10 people agree
8 out of 10 people agree
8 out of 10 people agree
8 out of 10 people agree
6 out of 10 people agree
6 out of 10 people agree
source Edelman
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supply chain pressure to grow in 2005
RoHS/ materials laws
Attention on environmental/social
International buyers
Investors and activists
Supply Chain
Outsourcing and U.S. election
Special focus on electronics by SRI investors and
activists
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Trust is not just a western issue

• I dislike large firms.
• Korea 57, Japan 53, China 12
• I dislike small and medium-sized firms.
• Korea 23, Japan 33, China 20
• Why?
• Lack of social responsibility Korea 65, China
  47
• Lack of business ethics Korea 28, China 15
• Lack of managerial capability Korea 6, China
  30
• 
  Source JoongAng Ilbo, 2003

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public confidence hard to gain back
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how will stakeholders understand your business?
eco efficiency resource productivity
transparency stakeholder relations risk
management new economy positioning brand
reputation long term value
quarterly results short term value
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sustainability reporting

• a growing trend
• what drives it ?
• how will you tell your story ?

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credibility of communications sources
In general, how credible do you feel each of the
following sources is for information about a
company? Is information about a company that you
get from (INSERT SOURCE) extremely credible, very
credible, somewhat credible, or not credible at
all?
Percentage saying source is Extremely or Very
Credible
Rank order by US data
source Edelman
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needed a transparent framework and standard

STEVE LENAHAN Yes, it is. Frankly, its all
weve got at the moment. There is no
sustainability version of GAAP or of
internationally accepted accounting standards.
And so GRI is probably as good as it gets, at the
moment.
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GRI the organisation

• Based in Amsterdam
• Registered as Dutch non-profit organisation
• 16 staff from diverse international backgrounds
• Funded through governments, foundations, and OS
  fees (mostly business)
• Not a consulting organisation

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making reporting routine and comparable
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emerging global system
codes of ethics e.g. Global Compact, OECD
Guidelines
assurance standards e.g. AA1000 AS, IAASB
performance standards e.g. national laws, SA8000
reporting standards e.g. Global Reporting
Initiative
monitoring and management systems e.g. ISO
standards
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examples of GRI users
ABB ABN AMRO Baxter British Petroleum Bristol-My
ers Squibb British Airways BT Dow Electrolux Esk
om Ford Motor Company Fuji Xerox General Motors
Hong Kong MTR ING Bank
Samsung SDI SASOL Shell Siam Cement Severn Trent
SITA South African Breweries Suncor
Energy Sunoco Thames Water Triodos Bank TXU
Europe Umgeni Water Vauxhall Motors Ltd VAW
Aluminium Waste Recycling Group
Johnson Johnson Kirin Brewing KLM Konica
Landcare Research Natura NEC Nike Nissan Nokia N
utreco Philips Electronics Procter Gamble
Rabo Bank Ricoh Royal Sun Alliance SAS
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developing GRI portfolio
GRI sector supplements
if available
GRI 2002 reporting guidelines
GRI technical protocols
all organisations
GRI resource documents
if preferred
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working towards next generation of the Guidelines
You are invited to participate!
Next Generation
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Software benefits...

• For users
• Access
• Analysis
• Comparability

• For reporters
• Faster
• Easier
• Cheaper
• Integrated

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Engaging the financial community
Financial markets working group
GRI Framework
Investor Information Needs
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supplements

• Completed/Underway
• Financial services
• Telecommunications
• Automotive
• Mining and metals
• Logistics and transportation
• Tour operators
• Public agencies

• Candidates
• apparel, footwear, textiles
• oil gas
• electrical utilities
• construction

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Other projects

• SME Handbook
• Technical protocols (i.e., health safety)
• Regional outreach
• Assurance

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GRI governance structure
Organisational stakeholders
Board of Directors
Secretariat
Stakeholder Council
TAC
Multi-stakeholder Working Group
Multi-stakeholder Working Group
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GRI reaches 125th organizational stakeholder

• Shell
• Deutsche Bank
• Telecom Italia
• McDonalds
• EIRIS
• ABB
• Rabobank
• Ford
• Nike
• VBDO
• Oxfam
• Suncor
• Triodos Bank
• New Economics Foundation

• Australian Ethical Investment
• Taiwan Business Council for Sustainable
  Development
• BHP Billiton
• Canon
• Codelco
• National Business Initiative
• MTR Hong Kong
• Fundacion Entorno
• IMUG
• IUCN
• National Australia Bank
• Gaz de Fance

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Examples of Asian interest

• Board Members
• Hong Kong (Peter Wong)
• India (JJ Irani)
• Japan (Toshihiko Goto)

• Stakeholder Council Members from
• Hong Kong
• India
• Thailand

• Reporters
• Hong Kong MTR, Siam Cement, Hitachi, NEC, Ricoh,
  etc100

• Working Groups
• Bank of China, Canon, COSCO (China), Hong Kong
  EPD, NTT (Japan)

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GRI convening a community of best practice

• You can make the GRIs mission succeed !
• publish your GRI-based sustainability report
• take part in GRI working groups
• have your say in GRI governance
• join other leading companies and become a GRI
  Organisational Stakeholder

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thank you!

• Join GRI as a OS and a reporter!
• www.globalreporting.org
• info_at_globalreporting.org
• GRI HeadquartersKeizersgracht 2091016 DT
  Amsterdam31-20-531-0000