April 05, 2002
Corporate Sustainability Reporting Is Here to Stay
by Mark Thomsen
The Global Reporting Initiative, an organization working to make corporate performance more
transparent, was formally inaugurated as an independent institution yesterday.
The Global Reporting Initiative (GRI)
was officially launched as a permanent institution yesterday at an event held at the United Nations
in New York. Since 1997, GRI has been leading a worldwide, multi-stakeholder effort to establish
standards for how corporations report their economic, environmental, and social performance. It
was announced at the inauguration that the newly independent organization will be headquartered in
Amsterdam, The Netherlands.
"By offering guidelines that enable companies to report
on their work to improve environmental and social conditions, the GRI has a unique contribution to
make in fostering corporate transparency and accountability far beyond financial matters," said
U.N. Deputy Secretary-General Louise Frechette in her opening remarks.
GRI was convened
originally by Boston-based Coalition for Environmentally Responsible Economies (CERES) and the
United Nations Environmental Programme (UNEP). GRI's framework for corporate reporting, known as
the Sustainability Reporting Guidelines, is still a work in progress. Thousands of representatives
from the business, accountancy, and investment sectors as well as from environmental, human rights,
and labor organizations have been developing the guidelines through a step-by-step process.
The first draft of the guidelines was reviewed by twenty-one pilot test companies, other firms,
and a diverse group of non-corporate stakeholders between 1999-2000. The second version of the
guidelines was released in June of 2000 and was pilot tested by thirty-one companies. The third
version of the guidelines is expected to be released this coming July.
According to GRI,
more than 110 companies from around the world have used the Sustainability Reporting Guidelines in
reporting aspects of their economic, environmental, and social performance. Companies include
Bristol-Myers Squibb (ticker: BMY), Danone (DA), Electrolux (ELUX), Ford (F), General Motors (GM),
NEC (NIPNY), Nike (NKE), Novo Group (NVO), and Nokia (NOK).
More and more large companies
are viewing sustainability reporting as a necessity. A survey conducted by CSR Network Limited, a
UK-based international consultancy, shows that environmental reporting increased for the 100
largest firms (G100) listed in Fortune magazine's August 2000 Global 500. In 2001 more than
half of the G100 produced global environmental reports, which is a first. In 1999 only 44 out of
the largest 100 companies issued reports on environmental performance.
Many companies view
increasing transparency through sustainability reporting as a chance to gain competitive advantage.
Increased transparency can strengthen a company's relationships with stakeholders such as
investors and local communities. But some companies also view sustainability reporting as an
opportunity measure their own results and identify places where they can improve.
Guidelines have encouraged us to take a more comprehensive look at our performance according to the
triple bottom line of economic, environmental, and social responsibility," said Harry Kraemer Jr.,
CEO of Baxter International (BAX), who spoke at the event. "Now through our sustainability report
we are able to bring these together to show the synergies and interrelationships in defining our
success and responding to diverse stakeholder interests."