Four Countries Commit to Corporate Sustainability Reporting
According to the Global Reporting Initiative (GRI), a group of leading governments has joined together in a unique initiative to commit to corporate sustainability reporting, in support of paragraph 47 of the UN Conference on Sustainable Development – Rio+20 – outcome document.
Brazil, Denmark, France and South Africa are forming a group of “friends of paragraph 47” to advance corporate sustainability reporting, and to that effect they have invited Global Reporting Initiative (GRI) and the United Nations Environment Programme (UNEP) to support them.
Their vision is that corporate transparency and accountability are key elements to enhancing the private sector’s contribution to sustainable development. Making sustainability reporting standard practice among the companies will contribute to monitor the impacts and the contribution to a sustainable development.
They planned to announce the commitment at the event, “Denmark & South Africa Show the Way: Corporate Social Responsibility and Sustainability Reporting Create a Green Economy and Sustainable Development,” at Rio+20, at the presence of Achim Steiner, executive director, UNEP. Together with the announcement they will invite other governments to join. In the coming months they will have their kick off meeting to carve out their scope of work.
Brazil, Denmark, France and South Africa are pioneers in sustainability reporting practice and policy. They are taking the opportunity provided by the global political agreement at Rio+20 to share their experience with the rest of the world and contribute to making corporate sustainability reporting standard practice.
Villy Søvndal, minister for foreign affairs for the government of Denmark, encourages fellow leaders to adopt similar strategies to Denmark, where large companies are required to report their economic, environmental and social performance, or explain why they do not report.
“Governments can play a crucial role in driving sustainability practices and disclosure at a national level,” Søvndal says. “In Denmark, the legal requirement for the largest companies to report is having positive effects – increasing Danish companies’ international reputation and creating value for the companies and their stakeholders. These positive outcomes have in turn motivated more companies to address their Corporate Social Responsibility and to report on their sustainability performance. The Rio+20 Conference should inspire more governments and businesses to adopt sustainability reporting as a driver for sustainable development.”
Similarly, in South Africa, companies listed on the Johannesburg Stock Exchange are required to produce a report integrating their financial and sustainability performance or explain why they do not – a requirement of the King III Code.
“King III has provided a platform for compulsory integrated sustainability reporting for all companies listed on the Johannesburg Stock Exchange (JSE),” says Edna Molewa, minister of water and environmental affairs for South Africa. “This means that all these companies are required to report on their environmental, economic, social as well as governance performance. Adoption of more sustainable approaches will create new green jobs, open up new investment opportunities and export markets, support the creation of knowledge-based economy, and allow South Africa to set standards and demonstrate thought leadership.”
The commitment from governments is an important continuation of a development that was started at the Johannesburg Sustainable Development Summit in 2002. At this summit, sustainability reporting was endorsed in paragraph 18 of the Plan of Implementation, with encouragement for business to use the GRI Sustainability Reporting Framework.
Since 2002 GRI, of which UNEP was a founder, has developed into the global de facto standard for sustainability reporting. Thousands of companies have responded to the Johannesburg call by reporting their sustainability performance, both in industrialized and emerging economies. Companies and their investors, customers and employees have discovered the value of transparency for business, markets and communities.
UNEP, through its Finance Initiative, has been working with financial institutions since 1992 to encourage the incorporation of corporate sustainability information within their financial decision making – for which the availability of more and consistent data is key. The four-nation commitment offers the opportunity to scale up reporting efforts and respond to the needs that still persist.
“Year in and year out, trillions of dollars flow in and out of investments across the globe, a proportion of which is assisting in generating the conditions for a transition to a low carbon, resource efficient, job generating Green Economy,” says Achim Steiner, UN under-secretary general and UNEP executive director.
“An intensified commitment on sustainability reporting could dramatically assist in accelerating and scaling up these positive investment flows and bridge what is currently a big gap between ambition and reality for a sustainable future,” Steiner adds. “The momentum is rapidly gaining ground among countries, responsible investors, an increasing number of corporations and forward-looking sectors of civil society--today's announcement offers further momentum to accelerate and scale-up accountability towards the Future We Want and the future seven billion people need.”