Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Cse research for sustainability reports north america january 2016

278 views

Published on

Best-in-Class research relating the state of sustainability reporting in North American business.

Published in: Business
  • Be the first to comment

  • Be the first to like this

Cse research for sustainability reports north america january 2016

  1. 1. 1 Sustainability Reporting Trends in North America Most Active Sectors and Widely Used Guidelines
  2. 2. 2 Welcome to CSE’s Research of Sustainability (CSR) Reporting Trends in North America 2015. This report presents the sustainability reporting trends for the reporting period of 2014. The Sustainability Reports of four hundred and fifteen companies from United States and Canada were analyzed, many of them included in the Fortune 500 list of companies. Enjoy the reading Nikos Avlonas Founder and President CSE
  3. 3. © 2015 CSE 3 Contents Executive Summary ........................................................................................................................................................4 Major Trends ..................................................................................................................................................................5 About this Research........................................................................................................................................................6 Methodology ..................................................................................................................................................................7 Introduction....................................................................................................................................................................8 Key Findings....................................................................................................................................................................9 Sectors with High Volume of Sustainability Reports...................................................................................................9 Profile of the Companies – Organizations.................................................................................................................12 Most Frequent Terms Used for Reporting ................................................................................................................16 Size of the Reports....................................................................................................................................................17 Most Frequent Standards and Guidelines for Reporting .......................................................................................... 19 Use, Application and Compliance to GRI ..................................................................................................................22 Rise of External Assurance........................................................................................................................................26 Conclusions...................................................................................................................................................................28 About CSE Services ....................................................................................................................................................... 31 Glossary ........................................................................................................................................................................32
  4. 4. © 2015 CSE 4 Executive Summary The current research by the Centre for Sustainability and Excellence is intended to provide a useful representation of the current state regarding Sustainability (Corporate Social Responsibility) reporting by companies and organizations that are based in North America. It is intended for a number of stakeholder groups who are interested in the subject, such as investors, business leaders, company boards, CSR and sustainability professionals, NGOs, customers, academics and students. It examines 415 unique sustainability reports for the 2014 reporting period, published by companies and organizations based in North America. The research examines a number of characteristics regarding the companies and organizations (such as sectors, size, ownership) and their reporting practices (such as standards and guidelines used, extent of use of most common reporting guidelines, external assurance practices). The sectors with the highest reporting presence in the research sample are Financial Services, Energy and Energy Utilities, Mining and Food & Beverage. The majority of the companies that publish a sustainability report in North America are from the U.S.A. In both countries, most of the companies that published a sustainability report for the 2014 are public companies (84.4% in the U.S. and 76.0% in Canada). There is a significant percentage of Small-Medium Enterprises in both countries that published a sustainability report for the 2014 reporting period (7.6% in the U.S.A. and 4.0% in Canada). The two most frequently used terms, in both the U.S. and Canada, for these reports are “Sustainability Report” and “Corporate (Social) Responsibility Report”. Report size ranges from a few pages to several hundred pages. The reports, which have been conducted according to the Reporting Guidelines of the Global Reporting Initiative (including the GRI Referenced reports), are considerably larger in size than the non-GRI reports (74 to 37 pages respectively in the U.S. and 67 to 25 pages respectively in Canada). Using specific guidelines for conducting these reports is a growing trend and adds value, transparency and reliability to the report. 66% of the companies that published a sustainability report for the 2014 reporting period used the Reporting Guidelines of the Global Reporting Initiative, while another 11% of the reports used the Reporting Guidelines of the GRI as a reference. Globally, more than 50% of the reporting companies and organizations seek external assurance for their reports, but the research demonstrates that in North America, 69% of the reports that were conducted by using the reporting guidelines of the GRI, have not sought external assurance.
  5. 5. © 2015 CSE 5 Major Trends  There are some business sectors in North America that stand out for their sustainability reporting presence and activity. These sectors are the financial services sector, the energy & energy utilities sector, the mining sector and the food & beverage sector. These sectors are the most active in the specifics of their business activities and operations. For example, in the financial sector sustainability reporting is a means for companies to show clients, and society in general, their responsible profile and operations, while it is a means to communicate with investors and attract new ones. The energy and mining sectors are active in the sustainability reporting field due to the high environmental and social impact they have on the areas where they operate. In the U.S. the most active sector is the financial services sector and in Canada the most active sector is the mining sector.  There is a clearly visible trend of public (listed) companies to publish sustainability reports in order to disclose information and be transparent about their sustainability performance. More than 1000 Sustainability Reports are expected to be published in the next 2 years in North America.  In both countries (U.S. & Canada) most of the companies that publish sustainability reports are Large and Multinational Enterprises. Their national and international scale of their operations and impacts makes reporting on their sustainability performance a necessity in order to keep their social and environmental license to operate, while at the same time avoiding ESG risks.  There is a growing trend for Small-Medium Enterprises to publish sustainability reports in order to increase their transparency, attract customers and grow their business. The number of SMEs, which publish sustainability reports, is expected to grow in the following years.  The reporting guidelines of the Global Reporting Initiative remain the most widely used reporting guidelines for conducting sustainability reports. GRI Reporting Guidelines adds value and enhances some of the benefits of conducting a sustainability report such as improving processes and systems, progressing vision and strategy, reducing compliance costs and gaining a competitive advantage. Surprisingly, there are still large brands which do not use GRI or other guidelines, raising questions about their level of transparency and credibility of the data they have disclosed.  The global trends clearly indicate that companies and organizations seek external assurance for their sustainability reports. The percentage of companies and organizations in North America that seek external assurance remains well below the global average, which is 63% for the world’s biggest companies. There are issues of transparency and credibility due to the differences between self-disclosure of data and externally assuring them.  There are a number of ways a company or organization can choose to report on its sustainability performance. Sustainability reports vary in sizes (ranging from 60 to 80 pages), a variation which is mostly dependent on the intended audience of the report and the use of alternative reporting techniques (such as online reports and the use of microsites). There is a growing trend of using online means of communicating sustainability reports, and there is a considerable percentage of companies and organizations which provide reports only
  6. 6. © 2015 CSE 6 online. Finally, reports which have been conducted according to the reporting guidelines of the GRI are considerably larger than the ones which have been conducted without any particular reporting guideline. About this Research The current research by the Centre for Sustainability and Excellence is intended to provide a useful representation of the current state regarding Sustainability (Corporate Social Responsibility) reporting by companies that are based in North America. It is intended for a number of stakeholder groups who are interested in the subject, such as investors, business leaders, company boards, CSR and sustainability professionals, NGOs, customers, academics and students. The goals of the research are to identify new trends on Sustainability Reporting and :  Examine which sectors are more active in sustainability reporting.  Examine the characteristics of the companies that publish sustainability reports.  Examine the extent of the use of standards and guidelines for publishing sustainability reports (such as the Global Reporting Initiative and other guidelines).  Examine the compliance and application level of the reports which were conducted using the GRI’s reporting guidelines.  Examine the practices for seeking external assurance for the sustainability report.
  7. 7. © 2015 CSE 7 Methodology The research was based on a study of sustainability-corporate responsibility reports by companies based in North America. It is based on publicly available information in standalone sustainability (corporate responsibility) reports. It includes information provided both in pdf and printed reports as well as in web- only. The main, but not exclusive, source of information was the reporting database of the Global Reporting Initiative. The research examined unique reports that refer to the year 2014 (i.e. published in 2014 or 2015). For the purposes of the research, 415 unique reports published by companies based in North America were examined. For each report the following information was collected and used in the research:  Company/Organization Profile (name, sector, country, size, type)  Sustainability reporting profile (reporting period, report size, standards and guidelines used, application and compliance level of GRI’s reporting guidelines)  External assurance practices, external assurance standard and level. The chosen sector categories are in compliance with the sectors identified by the Global Reporting Initiative. The terminology used for reports varies between companies. The use of the term “sustainability reporting” in this research should be taken to also cover the terms “sustainable development”, “corporate social responsibility”, “corporate responsibility” and “corporate citizenship”
  8. 8. © 2015 CSE 8 Introduction Sustainability Reports are a very useful tool for all companies who wish to communicate their actions toward sustainable development. They include aspects that directly or indirectly relate to the company and can be of interest to different stakeholder groups that are involved with the company, such as shareholders, investors, employees, the public and others. Sustainability reporting is the tool an organization can use in order to understand both its exposure to risks and potential business opportunities. It is also the process of collecting and analyzing information and data (qualitative and quantitative), necessary for creating long term value and resistance to environmental and social change. Sustainability reporting is gradually becoming an essential business management tool, since it will assist in convincing investors of the organization’s long term existence. The need of companies to communicate properly their responsibility led to the creation and the use of internationally recognized guidelines on reporting, such as the Global Reporting Initiative (GRI) Reporting Guidelines. The question is no longer “should we report?” but “what and how should we report?”.
  9. 9. © 2015 CSE 9 Key Findings Sectors with High Volume of Sustainability Reports The companies that have published Sustainability Reports for the 2014 reporting period belong to various sectors. The sectors with the highest presence in the research sample, regardless of whether the organization has used any reporting guidelines for publishing the report, are : Financial Services (11.3%), Energy and Energy Utilities (10.6%), Mining (7.5%) and Food and Beverage (6.7%). The following table shows the sectors to which the 415 companies and organizations, which published a sustainability report for the 2014 reporting period, belong . Sector % of total number of companies examined Financial Services 11.3% Energy and Energy Utilites 10.6% Mining 7.5% Food and Beverage 6.7% Healthcare Services and Products 5.3% Equipment 4.8% Real Estate 4.3% Chemicals 3.4% Retailers 3.4% Telecommunications 2.7% Automotive 2.2% Public-Government-State Agency 2.2% Computers 1.9% Technology Hardware 1.9% Aviation 1.9% Commercial Services 1.9% Railroad 1.9% Construction 1.7% Media 1.7% Household and Personal Products 1.4% Tourism and Leisure 1.2% Conglomerates 1.2% Forest and Paper Products 1.2% Other (sectors with less than 1.0% each, such as NGOs, Waste Management, Consumer Durables, Textiles and Apparel, Agriculture, Logistics, Tobacco, etc.) 17.8% Table 1: Sectors of companies which have conducted sustainability report for the 2014 reporting period.
  10. 10. © 2015 CSE 10 Breaking down the sectors by country, the top sectors in the USA are Financial Services, Food & Beverage and Energy & Energy Utilities, while in Canada the top sectors are Mining, Financial Services and Energy & Energy Utilities (table 3). Sector (US Companies) % of total number of companies examined Energy and Energy Utilities 9.8% Financial Services 8.3% Food and Beverage 8.3% Healthcare Products and Services 7.0% Equipment 5.4% Chemicals 4.1% Real Estate 3.8% Retailers 3.2% Automotive 2.5% Computers 2.5% Mining 2.5% Technology Hardware 2.5% Aviation 2.2% Commerical Services 2.2% Public-Government-State Agency 2.2% Household and Personal Products 1.9% Railroad 1.9% Telecommunication 1.9% Construction 1.6% Media 1.6% Tourism and Leisure 1.6% Conglomerates 1.3% Consumer Products 1.3% NGOs 1.3% Other (sectors with less than 1.0% each, such as Construction Materials, Consumer Durables, Textiles and Apparel, Waste Management, Logistics, Agriculture etc.) 14.3% Table 2: Sectors of US companies which have conducted a sustainability report for the 2014 reporting period.
  11. 11. © 2015 CSE 11 Table 3: Sectors of Canadian companies which have conducted sustainability report for the 2014 reporting period. Sector (Canadian Companies) % of total number of companies examined Mining 23.0% Financial Services 20.0% Energy and Energy Utilities 13.0% Real Estate 6.0% Telecommunications 5.0% Forest and Paper Products 4.0% Equipment 3.0% Retailers 3.0% Agriculture 2.0% Aviation 2.0% Railroad 2.0% Food and Beverage 2.0% Media 2.0% Public-Government-State Agency 2.0% Construction 2.0% Other (sectors with less than 1.0% each, such as Conglomerates, Consumer Durables, Automotive, Chemicals, Commercial Services, Textiles and Apparel etc.) 9.0%
  12. 12. © 2015 CSE 12 Profile of the Companies – Organizations The research focuses on sustainability reports published by companies and organizations based in North American. 76.0% of these companies and organizations are from U.S.A., and 24.0% are from Canada. Image 1: Country of origin of the companies and organizations which have published a sustainability report for the 2014 reporting period. Most of the companies that publish a sustainability report in North America are large companies (49.9%), while 43.1% of the companies are Multinational Enterprises (MNE’s). A small, but considerable, percentage (7.0%) is Small-Medium Enterprises (SME’s). Image 2: Size of the companies/organizations which have published a sustainability report for the 2014 reporting period. USA (76%) Canada (24%) Large (50%) MNE (43%) SME (7%)
  13. 13. © 2015 CSE 13 In the U.S. there is a balance between the number of Large (46.8%) and Multinational (45.5%)companies that published a sustainability report for the 2014 reporting period (image 3), while in Canada most (60%) of the companies, that published a sustainability report, were Large companies (image 4). The percentage of SME’s publishing a sustainability report is far greater in the U.S. (7.6%) than in Canada (4.0%). Image 3: Size of the U.S. companies/organizations which have published a sustainability report for the 2014 reporting period. Image 4: Size of Canadian companies/organizations which have published a sustainability report for the 2014 reporting period. Most of the companies/organizations that publish sustainability reports are Listed/Public Companies (82.4%) Large (47%) MNE (45%) SME (8%) Large (60%) MNE (36%) SME (4%)
  14. 14. © 2015 CSE 14 Image 5: Status of the companies which have published a sustainability report for the 2014 reporting period. In the U.S. the percentage of public companies that published a corporate sustainability report for the 2014 reporting period is 84.4% (image 6), while in Canada the percentage is 76.0%. Image 6: Status of the U.S. companies which have published a sustainability report for the 2014 reporting period. Private Companies (Not listed) (18%) Public Companies (Listed) (82%) Private Companies (Not listed) (16%) Public Companies (Listed) (84%)
  15. 15. © 2015 CSE 15 Image 7: Status of the Canadian companies which have published a sustainability report for the 2014 reporting period. Private Companies (Not listed) (24%) Public Companies (Listed) (76%)
  16. 16. © 2015 CSE 16 Most Frequent Terms Used for Reporting There are a number of terms used for these reports by the companies in North America. Since there are no guidelines or standards, when it comes to naming these reports, each company/organization is free to choose the title which best suits the interests, interpretations and intended audience of the company/organization and their reports. Nevertheless, there are two terms, which are most commonly used, “Sustainability Report” and “Corporate (Social) Responsibility Report”. This trend can be observed in both the U.S. and Canada, with similar percentages for each term in both countries. Image 8: Most frequent terms used by companies/organizations which published a sustainability report for the 2014 reporting period. Sustainability Report (36%) Corporate (Social) Responsibility Report (33%) Other (31%)
  17. 17. © 2015 CSE 17 Size of the Reports There is a number of ways a company or organization can choose to report on its sustainability performance. Sustainability reports vary in size, a variation which mostly depends on the intended audience of the report and the use of alternative reporting techniques (such as online reports and the use of microsites). Companies often chose to separate the GRI Index (the disclosures and indicators required by the GRI’s reporting guidelines) from the sustainability report, a choice which results in a less technical and more user friendly report, while at the same time maintaining the availability of the quantititative, technical data. The average size of reports is 63 pages (65 in the U.S. and 59 in Canada). In both countries there is a considerable difference between GRI (inclusing GRI Referenced Reports) and Non-GRI Reports. In the U.S. a GRI Report has an average of 74 pages, while a non-GRI report an average of 37 pages. Similarly, in Canada, a GRI report has an average of 67 pages, while a non-GRI report an average of 25 pages. In general report size ranges from a few pages up to several hundred pages (the longest report examined in the research was more than 600 pages). Online reports account for 8.9% of the reports in the U.S. and 10% in Canada. Online GRI reports (including GRI referenced reports) account for 6.8% of the reports in the U.S. and 8.5% in Canada. Finnaly, non-GRI online reports account for 15% of the reports in the U.S. and 16.7% of the reports in Canada. Image 9: Report size (page numbers) for the 2014 reporting period. 0 10 20 30 40 50 60 70 80 GRI and GRI Referenced Reports (page number) Non-GRI Reports (page number) Total Report Size (page number)
  18. 18. © 2015 CSE 18 Image 10: Online reports for the 2014 reporting period 0 2 4 6 8 10 12 14 16 18 GRI and GRI Referenced Online Reports (%) Non-GRI Online Reports (%) Total Online Reports (%)
  19. 19. © 2015 CSE 19 Most Frequent Standards and Guidelines for Reporting There are a number of standards and guidelines each company/organization can refer to for conducting their sustainability report. The choice depends on the reporting maturity of the company/organization, on the audience of the report, on the specific pillar (social, economic, environmental) the company/organization has the most impact upon, or wishes to focus on, and on a number of other parameters. The most commonly used reporting guidelines are the guidelines of the Global Reporting Initiative. GRI promotes the use of sustainability reports as a tool for companies/organizations to become more sustainable and increase their contribution towards sustainable development. In order to achieve this goal, the GRI has created the reporting guidelines for conducting a sustainability report. 66% of the companies that published a sustainability report for the 2014 reporting period used one of the versions (G3, G3.1, and G4) of the Reporting Guidelines of the Global Reporting Initiative. 11% of the reports are characterized as “GRI Referenced”, i.e. reports which have used the Reporting Guidelines of the GRI as a reference but have not followed the Guidelines. Hence, 77% of the reports examined in the research have used, fully or partially, the guidelines of the Global Reporting Initiative. Finally, 23% of the reports were created either by following other standards and guidelines (e.g. UNGC, ISO26000) or by not following any standards or guidelines. Image 11: Use of the GRI’s Reporting Guidelines by the companies which have published a sustainability report for the 2014 reporting period. In Canada, 73% of the reports for the 2014 reporting period were conducted using the guidelines of the Global Reporting Initiative, while in the U.S. 63% of the reports were conducted using the guidelines of the Global Reporting Initiative. GRI (66%) GRI Referenced (11%) Non-GRI (23%)
  20. 20. © 2015 CSE 20 Image 12: Use of the GRI’s Reporting Guidelines by Canadian companies which have published a sustainability report for the 2014 reporting period. Image 13: Use of the GRI’s Reporting Guidelines by USA companies which have published a sustainability report for the 2014 reporting period. It is common practice in sustainability reports to include information and data which is required by other standards and guidelines, but has direct correlation with the three pillars of sustainability, i.e. society, economy and the environment. Hence, 32.8% of the reports include information about the company/organization’s compliance with the Carbon Disclosure Project (CDP), 12.3% include information about the company/organization’s compliance with the 10 Principles of the United Nation’s Global Compact GRI (73%) GRI Referenced (9%) Non-GRI (18%) GRI (63%) GRI Referenced (11%) Non-GRI (26%)
  21. 21. © 2015 CSE 21 (UNGC), and 3.6% include information about compliance with the Guidelines of the Organization for Economic Co-operation and Development (OECD Guidelines). Standard – Guidelines % of reports containing information and data about each standard/guideline Global Reporting Initiative (GRI) 77.0% Carbon Disclosure Project (CDP) 32.8% United Nation’s Global Compact (UNGC) 12.3% Guidelines of the Organization for Economic Co-operation and Development (OECD Guidelines) 3.6% International Finance Corporation (IFC) 3.1% ISO 26000 2.2% Table 4: Standards, Guidelines and Reporting Guidelines referred in the reports for the 2014 reporting period.
  22. 22. © 2015 CSE 22 Use, Application and Compliance to GRI By examining only the companies/organizations that have used one of the versions of the GRI’s Reporting Guidelines for conducting their sustainability (CSR) reports it can be determined that the sectors with the most reporting companies/organizations are Mining (10.7%), Financial Services (10.3%) and Energy and Energy Utilities (9.2%). Sector % of total number of companies examined Mining 10.7% Financial Services 10.3% Energy and Energy Utilities 9.2% Food and Beverage 6.6% Equipment 5.1% Real Estate 5.1% Chemicals 4.8% Healthcare Services and Products 4.8% Retailers 3.3% Automotive 2.6% Commercial Services 2.6% Telecommunications 2.6% Aviation 2.2% Computers 2.2% Public-Government-State Agency 2.2% Forest and Paper Products 1.8% Household and Personal Products 1.8% Technology Hardware 1.5% Construction 1.5% Consumer Products 1.5% Railroad 1.5% Textiles and Apparel 1.1% Other (sectors with less than 1.0% each, such as Conglomerates, Construction Materials, Logistics, NGOs, Waste Management, Agriculture, Media etc.) 14.0% Table 4: Sectors of companies which have conducted sustainability (CSR) report using one of the versions of the GRI’s Reporting Guidelines for the 2014 reporting period.
  23. 23. © 2015 CSE 23 40% of the reports were created using the latest version of the reporting guidelines (G4) which will be the only version recognized by the GRI for reports published after the 31st of December 2015. Image 14: Use of the different versions of the GRI’s Reporting Guidelines by the companies which have published a sustainability report for the 2014 reporting period. Another important parameter is the application level of the reports which have been conducted using the G3 and G3.1 versions of the GRI’s Reporting Guidelines. The application levels (A, B and C) communicate the number of Aspects covered in the report and reflect the transparency level with respect to the reporting guideline. They are not to be mistaken as indicators of the companies/organizations sustainability performance, or as an indicator of the reports quality. The “+” sign next to each application level indicates that the company/organization has sought external assurance for the report content. Specifically, 28.6% of the reports conducted using the G3/G3.1 versions have an application level B, 19% application level C, while 29.5% of the companies/organizations don’t declare the application level of their report. G3 (9%) G3.1 (17%) G4 (40%)
  24. 24. © 2015 CSE 24 Image 15: Application level of the G3/G3.1 sustainability reports for the 2014 reporting period. In the new version of the GRI’s Reporting Guidelines (G4) the application levels have changed and they are now called compliance levels. The options are two: in accordance core and in accordance comprehensive. The difference between the two levels lies in the number of indicators the company/organization has chosen to disclose in the report for each identified material issue. In the “core” option the company/organization chooses at least one indicator per material aspect, while in the “comprehensive” option the company/organization must disclose all the available indicators for each identified material aspect. The majority of the companies/organizations (71.5%) have chosen the “core” option, while a significant percentage (23%) has not declared a compliance level. A (6,7%) A+ (6,7%) B (28,6%) B+ (7,6%) C (19,0%) C+ (1,9%) Undeclared (29,5%)
  25. 25. © 2015 CSE 25 Image 16: Compliance level of the G4 sustainability reports for the 2014 reporting period. Core (71%) Comprehensive (6%) Undeclared (23%)
  26. 26. © 2015 CSE 26 Rise of External Assurance One element of the sustainability reports that yields internal and external benefits, and increases the trust and confidence levels in the areas of governance, management and relationship with stakeholders is the external assurance of the Sustainability Reports. The benefits from the existence of external assurance include an increase of awareness, reliability and trust, the reduction of risks and the increase of value, the strengthening of internal management and reporting systems, improved communication with stakeholders, etc. According to the GRI, seeking external assurance is not mandatory, in order for a report to adhere to the “in- accordance” compliance levels. The GRI recommends that companies/organizations seek external assurance for their sustainability reports. The majority (69%) of the reports, which were conducted using the GRI’s guidelines, have not been externally assured. Image 17: Existence or not of external assurance for the GRI sustainability reports for the 2014 reporting period. Equally important to the existence of an external assurance is the process of external assurance to follow one of the internationally accepted assurance standards. Two of the most commonly used, internationally recognized, assurance standards are the AccountAbility 1000 Assurance Standard (AA1000AS) and the International Standard on Assurance Engagement (ISAE3000). Most of the external assurances (38.6%) have been conducted without following an assurance standard. 31.3% of the external assurances have been conducted using the ISAE3000, while 19.3% the AA1000AS (image 16). 3% of the external assurances were conducted with more than one assurance standard. Externally Assured (31%) Not Assured Externally (69%)
  27. 27. © 2015 CSE 27 Image 18: Use of assurance standards for the external assurance of sustainability reports. AA1000AS (19%) ISAE3000 (31%) Other National General and Sustainabilit y Assurance Standards (11%) No External Assurance Standard (39%)
  28. 28. © 2015 CSE 28 Conclusions Sectors with High Volume of Sustainability Reports The sectors with the highest presence in the research sample, regardless of whether the organization has used any reporting guidelines for publishing the report, are, Financial Services (11.3%), Energy and Energy Utilities (10.6%), Mining (7.5%) and Food and Beverage (6.7%). The top sectors in the USA are Energy & Energy Utilities (9.8%), Financial Services (8.3%) and Food & Beverage (8.3%), while in Canada the top sectors are Mining (23.0%), Financial Services (20.0%) and Energy & Energy Utilities (13.0%). Profile of the Companies – Organizations 76.0% (314 companies and organizations) of these companies and organizations are from the U.S.A., and 24.0% (100 companies and organizations) are from Canada. Most of the companies that publish a sustainability report in North America are large companies (49.9%), while 43.1% of the companies are Multinational Enterprises (MNE’s). A small, but considerable, percentage (7.0%) of the companies that publish a sustainability report are Small-Medium Enterprises (SMEs). Most of the companies/organizations that publish sustainability reports are Listed/Public Companies (82.4%). In the U.S. the percentage of public companies that published a corporate sustainability report for the 2014 reporting period is 84.4%, while in Canada the percentage is 76.0%.
  29. 29. © 2015 CSE 29 Most Frequent Terms Used for Reporting Companies and organizations use a variety of terms to name their Reports. There is a wide range of combinations of the terms “sustainability”, “corporate”, “citizenship”, “social”, “responsibility”, “sustainable development” used by companies and organizations. Nevertheless, there are two terms which are most commonly used, “Sustainability Report” and “Corporate Responsibility Report”. This trend can be observed in both the U.S. and Canada. Size of the Reports In both countries, the size of the Sustainability Reports (including GRI based and GRI referenced reports) is considerably larger than non-GRI Reports (74 to 37 pages) A significant percentage of reports are online (8.9% in U.S. and 10% in Canada). Most Frequent Standards and Guidelines for Reporting 66% of the companies that published a sustainability report for the 2014 reporting period used one of the versions (G3, G3.1, and G4) of the Reporting Guidelines of the Global Reporting Initiative. In Canada, 73% of the reports for the 2014 reporting period were conducted using the guidelines of the Global Reporting Initiative. 11% of the reports are characterized as “GRI Referenced”, i.e. reports which have used the Reporting Guidelines of the GRI as a reference but have not followed the Guidelines. Hence, 77% of the reports examined in the research have used, fully or partially, the guidelines of the Global Reporting Initiative. 23% of the reports were conducted either by following other standards and guidelines (e.g. UNGC, ISO26000) or by not following any standards or guidelines. 32.8% of the reports include information about the company/organization’s compliance with the Carbon Disclosure Project (CDP). 12.3% include information about the company/organization’s compliance with the 10 Principles of the United Nation’s Global Compact (UNGC). The company’s reputation or size is not an indicator of use or compliance with reporting standards and guidelines. There are examples of well-known and multinational companies which have not used any reporting guidelines (GRI or UNGC) for their sustainability reports, belonging to major sectors such as the Financial and Technology sectors. Use, Application and Compliance to GRI The sectors with the most reporting companies and organizations, according to the guidelines of the GRI, are Mining (10.7%), Financial Services (10.3%) and Energy and Energy Utilities (9.2%). 40% of the reports were created using the latest version of the reporting guidelines (G4) which will be the only version recognized by the GRI for reports published after the 31st of December 2015. The compliance levels (“in-accordance core” and “in-accordance comprehensive”) communicate the number of indicators the company/organization has chosen to disclose in the report for each identified material issue. They are not to be mistaken as indicators of the company/organization’s sustainability performance, or as an indicator of the reports quality. The majority of the companies/organizations (71.5%) have chosen the “in-accordance core” option (at least one indicator per material aspect), while a significant percentage (23%) have not declared a compliance level.
  30. 30. © 2015 CSE 30 Rise of External Assurance In contrast with the global trends, which indicate that 54% of the reporters seek external assurance for their sustainability (CSR) reports, 69% of the reports that were conducted by using the reporting guidelines of the GRI, have not sought external assurance. There are two potential major barriers that prevent companies and organizations seeking external assurance for their sustainability reports. The first one is a lack of understanding of the importance and benefits of external assurance. The second one is the cost of the external assurance process. It is important to note that major reporting and disclosure organizations and indices, such as GRI and CDP, request or recommend the external assurance of sustainability reports, in order for their content to be verified and validated. Most of the external assurances (38.6%) have been conducted without following an assurance standard. 31.3% of the external assurances have been conducted using the ISAE3000, while 19.3% the AA1000AS. The company’s reputation or size is not an indicator of seeking external assurance for their GRI sustainability reports. There are examples of well-known and multinational companies which have not sought external assurance for their sustainability reports, belonging to sectors such as Computer Hardwre, Equipment and Food & Beverage.
  31. 31. © 2015 CSE 31 About CSE Services (www.cse-net.org) CSE is a leading boutique firm specialized in global sustainability (CSR) consulting, coaching and training. Since 2004, early entry into the international sustainability (CSR) services market, CSE has been assisting clients to achieve higher performance, build brand loyalty and innovate through the continuous integration of sustainability principles into their culture, products and/or services. Public and private sector clients benefit from CSE expertise in serving diverse sectors, markets and organizational cultures in the Americas, Europe, Asia and the Middle East. Integrated Consulting Services from A to Z Our services and web tools are designed to assist businesses and organizational leaders to understand and meet the evolving international standards and frameworks, such as the United Nations Global Compact (UNGC), the Global Reporting Initiative (GRI), the Carbon Disclosure Project (CDP), Green House Gas Protocol, the Dow Jones Sustainability Index (DJSI), ISO 26000 guidelines and other local and international guidelines. "CSE believes that investment in human capital through education, training and coaching is the single most important determinant of future value for all organizations" Consulting Services  Sustainability and Materiality Assessment  Sustainability Strategies  Sustainability and Integrated Reporting  External Verification and Assurance  SROI and Stakeholder Engagement Programs  Carbon Reduction and Product Life Cycle Analysis  Supply Chain Sustainability  Green Buildings and Events Pioneering in Sustainability Education for the last 10 years (www.sustainability-academy.org) CSE is accredited by IEMA to provide global training to Sustainability Professionals and is also a GRI organizational stakeholder. We have trained over 5,000 Sustainability Professionals from five continents through on-site, online and group training. Those are the following : Certified Sustainability Practitioner Program (Advanced Version) , Online Diploma on Corporate Sustainability, Online Certificate for Sustainability Reporting , Online Certificate for Carbon Footprint Reduction, Online Certificate on ESG Performance. Our clients include Fortune 500 companies and organizations such as WalMart, United, NASA, Walgreens, Lloyds Banking Group, Coca Cola, Oracle, Shell, Baker Hughes,Whole Foods, North Face, World Bank.
  32. 32. © 2015 CSE 32 Glossary  Sustainability (CSR) Reporting: an organizational report that gives information about economic, environmental, social and governance information. It is a method to internalize and improve an organization’s commitment to sustainable development in a way that can be demonstrated to both internal and external stakeholders.  Global Reporting Initiative (GRI): an international independent standards organization that helps businesses, government and other organizations understand and communicate their impacts on issues relating to economic, social and environmental performance.  Indicator (GRI): qualitative or quantitative information about results or outcomes associated with the organization that is comparable and demonstrates change over time.  Material Aspect (GRI): reflects the organization’s significant economic, environmental and social impacts; or the aspects that substantially influence the assessments and decisions of stakeholders.  United Nations Global Compact (UNGC) is a United Nations initiative to encourage businesses worldwide to adopt sustainable and socially responsible policies, and to report on their implementation. The UN Global Compact is a principle-based framework for businesses, stating ten principles in the areas of human rights, labour, the environment and anti-corruption.  International Finance Corporation Sustainability Framework (IFC): The IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. IFC’s Sustainability Framework includes the Policy and Performance Standards on Social and Environmental Sustainability. It provides the private sector clients with a clear and comprehensive view of requirements early in their engagement with IFC.  ISO26000 provides guidelines for social responsibility (SR). Its goal is to contribute to global sustainable development, by encouraging business and other organizations to practice social responsibility to improve their impacts on their workers, their natural environments and their communities.  OECD Guidelines: The OECD Guidelines for Multinational Enterprises are the most comprehensive corporate responsibility instrument developed by governments in existence today. They cover all major areas of business ethics and are addressed to all the activities of multinational enterprises operating in or from the 42 adhering countries. The OECD Guidelines also have a unique implementation mechanism to address issues arising from their non- observance.
  33. 33. © 2015 CSE 33  CDP (Carbon Disclosure Project) is an organization based in the United Kingdom which works with shareholders and corporations to disclose the greenhouse gas emissions of major corporations.  AA1000AS (2008) assurance provides a comprehensive way of holding an organization accountable for its management, performance, and reporting on sustainability issues by evaluating the adherence of an organization to the AccountAbility Principles and the reliability of associated performance information.  ISAE3000 is a standard for assurance over non-financial information. ISAE3000 is issued by the International Federation of Accountants (IFAC). The standard consists of guidelines for the ethical behavior, quality management and performance of an ISAE3000 engagement. Generally ISAE3000 is applied for audits of internal control, sustainability and compliance with laws and regulations.  MNE (Multinational Enterprises) are organizations that owns or controls production of products or services in one or more countries other than their home country.  SME (Small Medium Enterprises) are businesses whose personnel numbers fall below certain limits. Industry Canada defines a small business as one with fewer than 100 paid employees and a medium-sized business as one with at least 100 and fewer than 500 employees. In the United States, the Small Business Administration sets small business criteria based on industry, ownership structure, revenue and number of employees (the cap is typically 500).  Public Company: A company that has issued securities through an initial public offering (IPO) and is traded on at least one stock exchange or in the over the counter market. Although a small percentage of shares may be initially "floated" to the public, the act of becoming a public company allows the market to determine the value of the entire company through daily trading.  Private Company: A company whose ownership is private. As a result, it does not need to meet the strict Securities and Exchange Commission filing requirements of public companies.
  34. 34. © 2015 CSE 34

×