Focal Point USA:
Accounting for Responsibility
The Global Reporting Initiative hopes to promote corporate sustainability reporting stateside as market interest grows.
Ben Hider/Courtesy NYSE Euronext
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The idea of publicly reporting corporate responsibility efforts can be a touchy subject — one that may evoke fear surrounding transparency, inconsistency and consumer trust. But according to the Global Reporting Initiative, or GRI, an Amsterdam-based organization that created what is reportedly the world’s most widely used framework for sustainability reporting, it’s an area that American businesses need to address head-on.
By GRI’s reckoning, more than two-thirds of the top 250 companies that make up the Fortune Global 500 currently use its guidelines for corporate reporting. But while 45 percent of the companies that filed 2009 data are based in Europe, only 12 percent hail from the U.S.
“Some US companies are pushing the boundaries and have developed some of the most innovative sustainability reports. So why is America so far behind in terms of the number of companies that report?” challenged GRI Chief Executive Ernst Ligteringen, speaking before an assembly of more than 200 sustainability professionals at the NYSE in January. The group was attending the kickoff of GRI’s Focal Point USA, which aims to encourage more U.S. companies to get on board.
Ben Hider/Courtesy NYSE Euronext
Now is the time to step up, insists Mike Wallace, director of Focal Point USA, who points out that the trading community is growing increasingly aware of corporate responsibility and is closely tracking environmental, social and governance performance — and its link to financial performance. “More and more institutional investors, public pension plans and even private-equity firms are very interested from a risk and opportunity point of view,” he says, adding that none of them want to encounter any surprises that could hurt shareholders.
“Sustainability is crucial to the growth of financial markets,” asserts Mindy Lubber, president of Ceres, a public-interest group steering U.S. companies to respond to sustainability issues. She urges companies to deliver corporate responsibility data together with their financial reports, noting that GRI’s metrics-driven approach provides a useful bar for measurement.
Such data is taking on new importance, says Curtis Ravenel, director of sustainability initiatives at Bloomberg L.P. Bloomberg’s audience of worldwide analysts and investors have been able to access GRI reports directly from their terminals since the summer of 2009, and Ravenel says that he expects those reports to be increasingly viewed going forward.
NYSE-listed companies already using the GRI template for corporate reporting say that the system has helped them successfully measure and track business improvements. Internally, says Steve Leffin, director of global sustainability at United Parcel Service Inc. (UPS), the GRI guidelines have paved the way for his company to discuss realities and goals in a structured way. And on an external level, says Susan Arnot Heaney, director of corporate responsibility at Avon Products Inc. (AVP), “GRI gives a formal framework that the bean counters can relate to.”
>> GRI’s Reporting Guidelines
The Global Reporting Initiative provides a sustainability reporting framework for companies of all sizes, whether they are new to tracking corporate responsibility or are looking to improve an existing process. GRI says its guidelines are flexible enough for organizations to adopt incrementally as they streamline their reporting practices.
The GRI Guidelines offer comprehensive instructions for creating a report’s content, ensuring its quality and defining its boundaries. For starters, it recommends identifying a company’s stakeholders and explains how the report can respond to their specific expectations and interests regarding sustainability. In addition, it details how to present the content so that the report reflects both positive and negative aspects of the company’s performance, which is key to presenting an accurate, big-picture assessment. The guidelines also cover standard disclosure strategies, management approaches and performance indicators.
GRI is now developing the next-generation, or G4, guidelines, says Mike Wallace, director of the organization’s Focal Point USA, adding that the group welcomes feedback and insight from companies following the current GRI guidance as well as from companies that take other approaches.
For further details on GRI’s guidelines plus additional resources, click here.
