Corporate Environmental Strategy

1
Corporate Environmental Strategy

• Global Reporting Initiative
• UN Global Compact
• Magali Delmas

2
Transparency an old concept

• It is wise to disclose what cannot be
  concealed.
• 
  
• Friedrich von Schiller (1759-1805)
  
  German Dramatist

3
with new relevance

• Transparency is on the rise, not just for
  legal or purely ethical reasons but increasingly
  because it makes economic sense. Firms that
  exhibit openness and candor have discovered that
  can better compete and profit.
• Tapscott and Ticoll, October, 14th, 2003
  Wall Street Journal

4
Transparency imperative

• investors
• market analysts
• customers
• consumers
• regulators
• environmental and social advocates

• better non-financial information for decisions
  on
• investments
• purchasing
• legal liability
• employment
• campaigns

w a n t
5
Market

• Investors demanding more non-financial
  information
• Investors cannot make judgments about the way
  business is managing sustainability and corporate
  responsibility issues unless companies disclose
  relevant information. Hendersons Global
  Investors, 2003
• Stock exchanges
• U.K. expanding the definition of materiality
  for financial reporting

6
Sustainability dilemmas

• What does sustainable development mean in
  practice?
• What should I communicate on?
• Who am I communicating with?
• How do I know it is useful information?
• What system do I use (industry, sector,
  national, international)?

7
Absence of Common Framework
Report Preparer
Report User
8
CSR initiative proliferation

• around 300 separate CSR codes, principles,
  performance standards, management standards, etc.
• covering one or more of environmental, human
  rights, or labor sectors
• national, regional, international scope
• by company, by sector
• developed by individual governments, industry
  associations, academics, etc.

9
Rising Expectations, Proliferating Initiatives
10
CSR initiative proliferation

• Burdens
• white noise
• market confusion
• reduces use
• limits learning
• increases cost

• Benefits
• encourages creativity
• no one size solution
• multi-level engagement
• underlines interest

11

• GRIs mission

• a generally accepted global framework for
  sustainability reporting

12
GRI

• The Global Reporting Initiative (GRI) is a
  multi-stakeholder process and independent
  institution whose mission is to develop and
  disseminate globally applicable Sustainability
  Reporting Guidelines. These Guidelines are for
  voluntary use by organizations for reporting on
  the economic, environmental, and social
  dimensions of their activities, products, and
  services.
• The GRI incorporates the active participation of
  representatives from business, accountancy,
  investment, environmental, human rights, research
  and labor organizations from around the world.
• Started in 1997 by the Coalition for
  Environmentally Responsible Economies (CERES),
  the GRI became independent in 2002, and is an
  official collaborating center of the United
  Nations Environment Program (UNEP) and works in
  cooperation with UN Secretary-General Kofi
  Annans Global Compact.

13
Mission

• to make sustainability reporting as routine
  valuable as financial reporting
• used by all organizations
• based on a multi-stakeholder process for
  producing generally-accepted guidelines for
  voluntary use

14
GRI products
GRI sector supplements
if available
GRI 2002 reporting guidelines
GRI technical protocols
all organisations
GRI resource documents
if preferred
14
15
5 sections of reporting

• Vision and Strategy description of the
  reporting organizations strategy with regard to
  sustainability, including a statement from the
  CEO.
• Profile overview of the reporting
  organizations structure and operations and of
  the scope of the report.
• Governance Structure and Management Systems
  description of organizational structure,
  policies, and management systems, including
  stakeholder engagement efforts.
• GRI Content Index a table supplied by the
  reporting organization identifying where the
  information listed in Part C of the Guidelines is
  located within the organizations report.
• Performance Indicators measures of the impact
  or effect of the reporting organization divided
  into integrated, economic, environmental, and
  social performance indicators.

16
What does it offer?

• products
• Guidelines
• Sector Supplements
• Protocols
• Resource documents

• process
• multi-stakeholder framework
• learning forum
• continuous improvement

17
What does it offer?

• consistency
• one framework, worldwide
• links local, national, global
• links to international goals MDGs, A21, etc.
• potential for common software, etc.

• comparability
• analysts
• investors
• employees
• tax-payers
• suppliers
• CSOs

• credibility
• developed by stakeholders
• market leader
• widely used and supported by business, government
  and stakeholders

18
GRI 831 reporters by April 2006 TOP 10 countries
in 2006
19
GRI 831 reporters by April 2006 TOP 10
industries in 2006
20
A global CSR management toolkit

• high value features
• global
• voluntary
• triple-bottom line
• multi-stakeholder
• flexible

21
UN Global Compact

• Voluntary initiative announced by United Nations
  Secretary-General Kofi Annan in 1999, when he
  challenged business leaders to join the Global
  Compact to bring companies together with UN
  agencies, labor groups and civil society to
  support 10 principles in the areas of human
  rights, labor and the environment .
• The Global Compact Office is supported by six UN
  agencies (Human Rights, Environment, Labor,
  Development, Industrial Development, Drugs
  Crime)

22
UN-GC 10 Principles

• Human Rights. Businesses should
• 1 Support and respect the protection of
  internationally proclaimed human rights
• 2 Make sure that they are not complicit in human
  rights abuses.
• Labor Standards. Businesses should uphold
• 3 the freedom of association and the effective
  recognition of the right to collective bargaining
  
• 4 the elimination of all forms of forced and
  compulsory labor
• 5 the effective abolition of child labor
• 6 the elimination of discrimination in
  employment and occupation.
• Environment. Businesses should
• 7 support a precautionary approach to
  environmental challenges
• 8 undertake initiatives to promote environmental
  responsibility and
• 9 encourage the development and diffusion of
  environmentally friendly technologies.
• Anti-Corruption
• 10 Businesses should work against corruption in
  all its forms, including extortion and bribery

23
UN GC COPs

• In 2003, GC office introduced the
  Communications of Progress (COPs) to increase
  the transparency of the GC corporate activity
• Statement of continued support for the GC
• Description of practical actions taken to
  implement the GC principles
• Measurement of outcomes of these actions using
  specific indicators and metrics
• Non-Communicating companies are highlighted

24
UN-GC TOP 10 countries
2,300 corporations in 89 countries have signed up
25
UN-GC TOP 10 industries
26
Conclusions

• transparency is a key element of sustainability
• existing initiatives can be strengthened through
  collaboration
• promote learning, partnerships