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  • Pro-active vs reactive
  • Increased utility, decreased transaction costs for reporters and report readers
  • OECD includes disclosure as key element; GRI = framework for disclosure

2003 j burg oecd 2003 j burg oecd Presentation Transcript

  • Improving Transparency andCommunication of Corporate Sustainable Development Practices The Roles of the OECD MNE and GRI Sustainability Reporting GuidelinesPaul HOHNEN, Director, Strategic DevelopmentJohannesburg, 19 November 2003 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • outlinewhy improve transparency & communication?what is GRI?how the OECD MNE and GRI guidelines can help. 2 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • transparency … an old concept"It is wise to disclose what cannot be concealed."Friedrich von Schiller (1759-1805), GermanDramatist 3 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • …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 candour have discovered that can better compete and profit”. Tapscott and Ticoll, Wall Street Journal, 14 Oct 2003 4 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • Increased demands governments institutional investors shareholders civil society organisations (CSOs) employees & unions 5 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • Johannesburg 2002“ We agree that there is a need for privatesector corporations to enforce corporateaccountability, which should take place within atransparent and stable regulatory environment”(WSSD Declaration) Governments agree to “encourage industry toimprove social and environmental performancethrough voluntary initiatives … including publicreporting on environmental and social issues …”. (WSSD Plan of Implementation) 6 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • Johannesburg 2003 ‘Transparency is both an integral part of effective public governance and a core feature of international investment policy rules.’ ‘Participants recognise the key role of governments to : promote transparency enhance … accountability’ Draft Co-Chairs’ Statement, OECD Global Forum on International Investment, 18 November 2003 7 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • 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”. – Henderson’s Global Investors, 2003 Governance codes Australian Standard 8000, King Commission, etc. Stock exchanges  U.K. expanding the definition of “materiality” for financial reporting  Johannesburg Stock Exchange 8 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • investors Share Share valueLicence to valueoperateHumancapital intangibleReputation assetsBrand Tangible assets financial reporting 9 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • the naked corporation Tapscott & Ticoll, 2003Level of information vanguard trust ‘mushroom’ danger level of activism 10 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • benefits? “The amount of information companies provide in their annual reports is correlated to market risk and valuations.” “Companies that distinguish themselves by disclosing more information lower their market risk and therefore lower their cost of capital.” “Non-financial disclosure in annual reports needs improvement.”“Transparency and Disclosure” study by Standard & Poor’s 11 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • corporate governance “…companies no longer act independently from the societies and the environment in which they operate”. “… social, ethical and environmental issues … can no longer be regarded as secondary to more conventional business imperatives South Africa : King 2 Report on Corporate Governance, 2002 12 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • outlinewhy improve transparency & communication?what is GRI?how the OECD MNE and GRI guidelines can help. 13 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • 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?) 14 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • GRI’s mission a generally accepted global framework for sustainability reporting 15 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • mission to make sustainability reporting as routine & valuable as financial reporting used by all organisations based on a multi-stakeholder process for producing generally-accepted guidelines for voluntary use 16 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • what does it offer?products process Guidelines  multi-stakeholder framework Sector Supplements  learning forum Protocols  continuous improvement Resource documents 17 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • what does it offer ?consistency credibility comparability one framework,  developed by  analysts worldwide stakeholders  investors links local,  market leader national, global  employees  widely used and links to supported by  tax-payers international business, goals: MDGs,  suppliers government and A21, etc. stakeholders  CSOs potential for common software, etc. 18 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • GRI reporter uptake700 2005 Target 600+600500400 330+300200100 0 1999 2000 2001 2002 2003 2004 2005 19 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • Global : GRI reporters (by country) Portugal 1 Belgium, Ireland 2 Austria , Japan 60 Denmark, Italy 3 United States of America 40 Finland 9 Australia 20 Netherlands, Sweden 13Now 18! South Africa 11 Germany 16 Canada 8 France 18 Switzerland 5 Spain 18 Brazil, New Zealand 4 United Costa Rica, Kingdom 41 Thailand 3 Chile, China, Argentina, India, Hungary, Malaysia, Norway 2 Mauritius 1 20 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • official recognitiongovernments agree to “encourageindustry to improve social andenvironmental performance throughvoluntary initiatives … taking intoaccount such initiatives as … theGlobal Reporting InitiativeGuidelines on sustainabilityreporting…”.UN WSSD Plan of Implementation, Sept. 2002 21 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • business recognition“… the GRI and AA1000 are yourbest bets, not only for reporting,but for building structured modelsfor transparency-drivenstakeholder engagement.”Don Tapscott and David Ticoll, The Naked Corporation – Howthe Age of Transparency Will Revolutionize Business, (2003) 22 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • market recognition“ Investors cannot make judgments about the way business is managing sustainability and corporate responsibility issues unless companies disclose relevant information. …Overall, we view the GRI as setting the globalbenchmark for disclosure and encouragecompanies to produce reports which are inaccordance with the GRI guidelines.”SRI Annual Report, Henderson Global Investors, May 2003 23 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • outlinewhy improve transparency & communication?what is GRI?how the OECD MNE and GRI guidelines can help. 24 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • GRI & OECD Guidelines : The Synergies “The European Parliament … highlights the importance, as stressed by the Commission, of building trust and consensus and support for internationally accepted principles such as the OECD Guidelines for Multinational Enterprises and the Global Reporting Initiative (GRI).” European Parliament Report on Corporate Social Responsibility (Final A5-0133/2003), April 2003 25 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • respective roles OECD reporting framework MNEs Guidelines • guidance on code of conduct what and how to report •guidance on what to do•all organisations •for corporations•government- endorsed •government approved GRI Guidelines 26 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • common characteristics OECD MNEs • voluntary Guidelines • global • economic, social and environmental • multi-stakeholder • relevant to companies of all sizes GRIGuidelines 27 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • common issue focus OECD MNEs economic Guidelines management consumers systems employment reporting environment principles human rights science &performance technology bribery indicators stakeholder governance engagement competition GRI taxationGuidelines 28 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • GRI/OECD MNE ‘User Guide’ developed by GRI as a contribution to highlighting & advancing the shared goals of OECD MNE and GRI Guidelines to help organisations assess and, if they wish, communicate their use of the OECD Guidelines a draft comparative table for free public use designed to be improved through use and feedback 29 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • CSR : the road map Sustainable development ILO Core UN SummitsConventions Treaties on human (e.g. 2002 Johannesburg, OECD Anti- rights, Rio 1992) Bribery climate, Convention biodiversity, UN Millennium POPs, etc. Development Goals unsustainable development 30 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • CSR ‘initiative proliferation’ around 300 separate CSR codes, principles, performance standards, management standards, etc. covering one or more of environmental, human rights, or labour sectors national, regional, international scope by company, by sector developed by individual governments, industry associations, academics, etc. 31 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • CSR “initiative proliferation”Benefits Burdens encourages creativity  ‘white noise’ no ‘one size’ solution  market confusion multi-level engagement  reduces use underlines interest  limits learning  increases cost 32 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • a global CSR management toolkithigh value features : global voluntary triple-bottom line multi-stakeholder flexible 33 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • Global CSR Management : Chaos and Confusion? Codes, Management standards Standards Performance standards Corp. governance standardsAssurance Performance reporting Standards 34 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • … or an Emerging Global CSR Management Framework? AccountAbility GRI OECD OECD,Uptake SAI,etc ISO = Manag’t Corp. UN GC Reporting Codes Perform. Standards Framework Gov’tTake-off Principles standards AA 1000 AS 35 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
  • conclusions transparency a key element of sustainability existing initiatives provide guidance on what to do in ways that promote learning, partnerships GRI invites you to : a) use its Guidelines and provide feedback b) propose and fund development of new tools c) consider how it can be used to advance your goals. 36 GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org