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Dirty laundry and the Global Reporting Initiative

Anyone who so chooses can get a real good look inside the corporate ‘laundry room’ these days. Just about every big business either has one, or is talking about getting one, and it’s no wonder what with so much dirt having soiled corporate suits. So all this dirty laundry is laying about for all to see, and corporations are talking a great game about cleaning it all up, but you might be left with the nagging doubt that this is like one of those real bad stains that you can never quite get rid of. Or maybe the only cycle that works in these laundromats is the ‘spin’ cycle, and we all know that no matter how much you spin it, it’s not getting any cleaner. Or is it possible that if business spends enough effort doing a real wash, as opposed to a ‘whitewash’ or ‘greenwash’, that these suits will come out smelling like roses in the end?

The United Nations Environment Programme has gone a long way in facilitating this great global wash and spin exercise by providing the framework for the Global Reporting Initiative (GRI), 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 labour 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 centre of the United Nations Environment Programme (UNEP) and works in cooperation with UN Secretary-General Kofi Annan’s Global Compact.

The GRI currently numbers 418 reporting organizations in 43 countries, but reporters ‘in accordance’ with all of the guidelines laid down by the GRI total only 20, including Ford, GM, and the only Canadian representative, Suncor. The other Canadian companies that have met some of the GRI guidelines include Alcan, BC Hydro, Hydro Quebec, Inco, Methanex, Petro-Canada, Potash Corp, Suncor, Talisman Energy, Teck-Cominco, TransAlta and Vancity Credit Union. An interesting list. Some of the major multi-national businesses participating includes 3M, Adidas, Barclays Bank, British Petroleum, Chevron-Texaco, Citigroup, Hewlett-Packard, Hitachi, IBM, KLM, L’Oreal, McDonald’s, Nike, Nissan, Procter and Gamble, Sony, Dow Chemical and Weyerhauser. For the complete list go to http://www.globalreporting.org/guidelines/reporters_all.asp From this page you can link directly to each company’s sustainability report.

Kudos have been given to Suncor for the detail and transparency of their latest sustainability report, it is certainly one of the best in the world. See www.suncor.com and click on “Social Responsibility”, then follow the link to their 2003 report. BC Hydro has also put considerable effort into this initiative, however by comparison some of the other Canadian reporters appear selective and vague in their disclosure. But hey, at least some of their dirty laundry is being aired out. These reports can include information such as the amount and intensity of a company’s emission of greenhouse gases and other pollutants, land and water reclamation efforts, hazardous waste generation, recycling initiatives, percentage of the workforce made up of women, aboriginals, visible minorities or the physically handicapped, community investment projects initiated by the company, charitable giving, and much more.

Why are these companies in an apparent rush to fess up? While many groups can claim to be driving this initiative forward, at least some of the momentum is provided by global financial institutions. It has dawned on them that it’s a bad business risk to contribute to social upheaval and environmental degradation, and since they directly underwrite the vast majority of global commerce it’s no wonder they want their clients to assess the impact of these issues on the bottom line. It is quite clear, however, that reporting is only the tip of the iceberg. Companies will find it difficult to continue to produce relevant and reliable reports without having internal management and information systems that support this undertaking.

The key challenge is to integrate sustainable development issues into mainstream business processes and systems. To this end, the GRI recommends assessing integrated performance through the use of various indicators that aid in understanding company contributions to, and impacts on, society. Cross-cutting indicators, for instance, bridge information across two or more of the three elements of sustainability: economic, social and environmental. The World Business Council for Sustainable Development (WBCSD) also provides guidance on integrated performance indicators such as eco-efficiency, innovation and technology, corporate social responsibility, ecosystems, and markets and risk.

Many global businesses are realizing that reporting helps to mitigate risk, protect corporate brand and secure a competitive position. A major hurdle remains in reporting on the links between sustainability and the bottom line. The truth is that the GRI will go nowhere unless companies not only demonstrate that they are mitigating various environmental and social risks, but also prove that these efforts will help them achieve greater profitability in the long run.

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