/:Call Girls In Indirapuram Ghaziabad ➥9990211544 Independent Best Escorts In...
Step-by-step
1. 42 | Baltic Transport Journal | 3-4/2019
#Inside
#Sustainability#UnitedNations
#SustainableDevelopmentGoals
#Reporting
I
ntegrating the SDGs into Corporate
Reporting: A Practical Guide, jointly
authored by the Global Reporting
Initiative (GRI) and UN Global
Compact, outlines three steps for com-
panies to embed the SDGs into existing
business and reporting processes in
alignment with the GRI Standards
and the UN Guiding Principles
on Business. The recommen-
dations focus on how corpo-
rate reporting on the SDGs
can best address investors’
information needs to
help mobilise sustainable
finance required for the
achievement of the SDGs.
Step I: Define priority
targets
First and foremost, it
is necessary to understand
the SDGs and their targets
and then, to consider how
the issues they raise might
relate to your business. This
requires reflecting on risks to
people and the environment, as
wellasonbeneficialproducts,ser-
vices, and investments. While doing
so, a company should consider the
entire value chain its operations affect.
The focus here is on identifying the most
severe negative impacts on people and the
environment that are linked to the compa-
ny’s activities and the SDG targets to which
theseimpactsrelate.Theobjectiveistoidentify
opportunitiestotackletheserisksinwaysthat
maximize positive outcomes for people and
theenvironment,andtherefore,fortheSDGs.
How companies can report on their advancements in sustainability
Step-by-step
by Gabrielė Vilemo Gotkovič
We are at a breaking point in the evolution of sustainability as transparency is fast becoming the
new paradigm for conducting business. The 17 Sustainable Development Goals (SDGs), adopted by
193 member states at the United Nations (UN) in 2015, provide a shared framework to address the
world’s most urgent challenges, including climate change and inequality. Achieving the SDGs requires
a commitment not only from governments and companies but also from investors. It is estimated
that by 2030, a total of $90 trillion is needed to achieve the SDGs. Mobilising this capital will require
businesses to report on their actions to advance the global goals in a way that helps investors make
informed decisions, directing resources towards investments with positive real-world impacts.
Thanks to principled
prioritization, it is possible then to identify
SDGtargetstowhichthecompaniescanbest
contribute through beneficial products, ser-
vices,orinvestments.Thecentralquestionthat
shouldbeaddressedhereishowthecompany
canapplyitsskillsandcapabilitiestodevelop
its portfolio that contributes to the achieve-
ment of the SDGs. While this might not be
immediately possible for some companies,
theexercisecouldhighlightideastomakethis
possibleinthefuture.Theaimistoensurethat
these beneficial products, services, or invest-
mentsarealsodevelopedanddeliveredinways
Step 1
Define priority
SDG targets
Step 3
Report, integrate
and implement
change
1.1
Understand
the SDGs and
their targets
1.3
Define your
SDG-related
report content
1.2
Conduct
principled
prioritization of
SDG targets
2.1
Set business
objectives
2.2
Select appropriate
disclosures
2.3
Collect and
analyze data
3.2
Consider data
users' information
needs
3.1
Consider general
features of good
practice when
reporting on the
SDGs
3.3
Report and
implement
change
Step 2
Measure and
analyze
2. 3-4/2019 | Baltic Transport Journal | 43
Sustainability
thatminimizeanynegativeimpacts,reinforc-
ing the long-term viability of the company.
This set of priority SDG targets and the
related impacts form an input to the process
fordefiningreportcontent;however,itisimpor-
tanttonotethattheSDGsarelikelytointroduce
additional considerations and expectations,
even for experienced reporters. In this regard,
theintroductionoftheSDGsisanopportunity
to review earlier materiality assessment and
ensure that report content is aligned with the
2030AgendaforSustainableDevelopmentand
theSDGs.AnnetteStube,HeadofSustainability,
A.P. Møller-Mærsk, explains how reporting
startsathercompany,“Ourreportingonmate-
rial sustainability issues, targets, and progress
isvalidatedwithrelevantinternalstakeholders
acrossourorganization,aswellasanchoredand
reviewed by members of executive manage-
ment to ensure relevant broad and high-level
management.”IntheprocessofdefiningSDG-
relatedreportcontent,itisimperativetoconsult
withstakeholderstodetermineanyadditional
issues that may influence their decisions and
assessment. While stakeholders can be posi-
tively or negatively affected via the company’s
operation or value chain, the focus here lies
withtheoneswhocouldbeaffectedinthelatter
way.Engagementwiththesestakeholdergroups
may take place directly with members such as
employees, contract or supply chain workers,
affectedcommunitiesandconsumers,orindi-
rectly–throughtheirlegitimaterepresentatives
like a trade union or community leaders. The
omission of this would lead to an incomplete
account of the significant economic, environ-
mental, and social impacts.
With these sets of priority SDGs, the
company can complete the process of defin-
ing report content, including compliant
assessment of materiality. Final decisions on
material topics should remain in line with
company’s responsibility to respect human
rights as well as other relevant principles
and standards for responsible business con-
duct, such as the Ten Principles of the UN
Global Compact and the OECD Guidelines
for Multinational Enterprises.
Step II: Measure and analyse
Based on the outcomes of Step I, the com-
pany can now identify and align its objec-
tives and strategies to benefit its priority
SDG targets. This step provides guidance
on setting objectives, selecting indicators to
measure the company’s impacts, and analys-
ing its performance against SDGs.
WhenaddressingtheprioritySDGtargets
basedonpriorityriskstopeopleandtheenvi-
ronment, it’s important to identify strategies
and specific objectives that go beyond just
avoiding harm, instead, the focus should be
putonfindingopportunitiestomaximizethe
positiveoutcomes.Thiswillsupportsystemic
anddurablechangeandwillhelpthecompany
to secure its sustainability-license to operate.
Inthemeantime,whenneworadaptedprod-
ucts, services, or investments that contribute
toSDGsareidentified,it’snecessarytoensure
that they can be produced and delivered
with minimum negative impacts. Trade-offs
betweenpositiveandnegativeimpactscanbe
problematiciftheimpactsarenotcomparable.
In particular, adverse human rights impacts
cannot be offset by other positive impacts.
For example, a renewable energy installation
might reduce a region’s dependence on fossil
fuels and bring energy to underserved com-
munities. But if it displaces local indigenous
communities from their historical and cul-
turallandswithouttheirconsent,thepositive
Fig. 1. Example outlining the identification of risk and interconnectedness of SDGs across an apparel value chain
Source: Global Reporting Initiative’s and UN Global Compact’s Integrating the SDGs into Corporate Reporting: A Practical Guide
ILLUSTRATION 1
Raw materials
Increasing Positive Impact
Minimizing Negative Impact
Suppliers
Inbound
logistics
Company
operations
Distribution Product use
Product
end life
Company identifies a priority to
reduce its negative impact on
SDG 15 by reducing soil
degradation
Company identifies a priority to
reduce its negative impact on
SDG 3 by ensuring safe working
environments in its operations
Company identifies a priority to
reduce its negative impact on
SDG 6 in the supply chain by
reducing waste water
Company identifies a priority to
reduce its negative impact on
SDG 12 through offering
increased opportunities for
consumer to recycle used apparel
Company identifies a priority to
reduce its negative impact on SDG
8 in its operations by providing a
living wage to all employees
Example outlining the identification of risk and interconnectedness of
SDGs across an apparel value chain
3. 44 | Baltic Transport Journal | 3-4/2019
and negative impacts cannot be offset; they
must be addressed in their own right.
Once the company has established objec-
tives to contribute to each of its priority SDG
targets, it’s useful to identify the indica-
tors that will be used to measure progress
against them. To adequately report impacts,
it’s worthwhile combining qualitative and
quantitative (e.g., numerical metric, ratio, or
percentage) disclosures. Qualitative disclo-
sures provide a narrative on how and why a
company identifies, analyses, and responds
to its actual and potential impacts. Once
these indicators are selected, the next step
is to identify and collect quantitative and
qualitative data in relation to each indica-
tor on a regular basis. Data relevant to the
company’s performance on priority SDG
targets might actually already exist within
the organisation. As always, stakeholder
engagement, including with internal stake-
holders, can be very helpful in this process.
Where data is not available for evaluating
whether the company is achieving its objec-
tives in relation to its SDG priorities, new
SMART indicators have to be established,
i.e., they need to be specific, measurable,
achievable, relevant, and time-bound.
It’s best practice to assign indica-
tors to a single owner and have
appropriate management moni-
toring progress towards the
established objectives with
consistency.
Whenapplicable,thecompanyshoulddis-
close the data both as an aggregate and by
region to reflect the diversity of impacts in
different contexts. Regional data will enable
measurement of impacts on specific popu-
lations or within particular environmental
contexts. For instance, in areas with disad-
vantaged,marginalized,orvulnerablegroups,
regionaldatawillbeimportanttounderstand
your company’s specific impacts or benefits
bysocioeconomiccriteriasuchasgender,age,
ethnicity, disability, migration status, along
with other relevant characteristics.
When analysing the data, reflection on
whether the selected disclosures adequately
reflect the company’s contribution to the pri-
ority SDG targets shouldn’t be overseen. The
conclusions from this assessment must drive
management decisions on resource alloca-
tion and could be included in the external
report. The data management strategy has to
beadjustedaccordingly,asthebusinesschanges
in line with its sustainability priorities, to
ensure optimal measurement and reporting.
Step III: Report, integrate, and imple-
ment change
The final action sets out what is needed for
putting together the content of the external
reportandreflectinginternallyonimplement-
ing the change. First, one should consider the
generalfeaturesofgoodpractisewhenreport-
ingontheSDGs.Specifically,reportingshould
bebasedonestablishedinternationalreporting
frameworkswheneverpractical.
On this account, when dis-
closing information on the
company’s contribution
to its priority SDG tar-
gets,oneshouldseekto
link this to other rel-
evant international
agreementsorcommitments.Forexample,the
effortstohelpmitigateclimatechange(SDGno.
13) could contribute to the Paris Agreement
and the climate-related National Determined
Contributions (NDCs).
It’s essential to report the progress against
the objectives the company has established
for each priority SDG target on a regular
basis. Disclosures in a report may be repur-
posed for reporting requirements mandated
by regulations, such as listing requirements
mandated by certain stock exchanges (infor-
mation on reporting policies, both voluntary
and mandatory, can be found on the Carrots
& Sticks online platform).
It’s also useful to include explanations for
any topics linked to the SDGs that stakehold-
ers might expect to see, but the company
has chosen to omit from its reporting. The
explanation should include the reasons why
the report concluded that these topics are less
material for the company. Next to this, if neg-
ative impacts have been identified, a descrip-
tion of the remedy should be included in the
report. Both internal controls and external
assurance must be utilized to enhance accu-
racy, credibility, and overall reporting qual-
ity. These might also be required by some
stakeholders, most notably by investors.
In addition to formal reports, compa-
nies should use other relevant channels to
communicate their sustainability strategies
and SDG performance, such as their web-
sites,socialmediachannels,podcasts,events,
productandservicelabelling,andmarketing
and advertising. It becomes more and more
importanttoconsiderthedatausers’informa-
tionneeds.SDGreportingshouldfunctionas
asourceofcredibleinformationforsharehold-
ers and other stakeholders to gain valuable
insightsuponwhichtheycanmaketheright
decisions. Therefore, it’s recommended to
engage regularly with a broad range of
stakeholders throughout the reporting
process to stress-test the value of the
reported information.
Photo: Rawpixel
4. 3-4/2019 | Baltic Transport Journal | 45
Sustainability
On top of that, all companies ought to
consider the information needs of their gov-
ernments. National cabinets lead the imple-
mentation of the SDGs in their countries
and voluntarily present their progress at the
UnitedNationsHigh-levelPoliticalForumon
Sustainable Development. To measure their
progress, governments have established data
collection systems. Many cabinets are now
exploring how private sector contributions
to the SDGs can be analysed to inform the
nationalreviewprocess.Businessdisclosures
can support data availability and quality of
such reviews, particularly if they are based
on internationally agreed standards and
are, therefore, more comparable. Engaging
in national multi-stakeholder dialogues can
facilitate a better understanding of govern-
mental expectations and how businesses can
contributetoandreportonthenationalSDG
agenda,aswellasotherUNprocesses.Inthis
context,oneshouldexplorewiththeirgovern-
ments how to make companies’ disclosures
more relevant and accessible.
Then, it’s also necessary to consider the
information needs of investors, who show
an increasing interest in SDG-related data to
assess risks, including those related to com-
panies and new business opportunities. The
assessment of business impacts on the SDGs
can inform investors’ decisions to help them
better represent the values of their clients
and offer differentiated sustainable financial
productswhileunderstandingtheirownSDG
impactsacrosstheirportfolios.Toinformtheir
decision-making,investorsareseekinginfor-
mation on how companies are transform-
ing their competitive advantage in relation
to the SDGs into business results as well as
on how relevant the SDGs are to the overall
companystrategies.Also,thoughunderstand-
ing past progress and trends helps investors
assess future business performance, they are
increasinglylookingforscenarioplanningand
other forward-looking disclosures.
Consequently, the information needs of
civil society should be taken into account as
well. Civil society organizations assess SDG
performance and hold companies account-
able as well as press for more transparency.
These organizations can help improve a
company’s SDG performance by provid-
ing expertise, becoming valuable partners
in liaising with affected communities and
when engaging in relevant multi-stake-
holder dialogues on the SDGs.
Finally, the information needs of con-
sumers and academia are worth consider-
ing, as well. The former might increasingly
demand more sustainable products and ser-
vices, basing their choices on the assess-
ment of corporate sustainability informa-
tion, including information on performance
on the SDGs. The latter, in turn, can use
corporate sustainability disclosures for their
research and analysis.
Taking all of the above into considera-
tion, one can decisively report and imple-
ment change. To do so effectively, one must
assess if the company is meeting the objec-
tives set in relation to its priority SDG tar-
gets, anticipate performance gaps, reflect on
the improvements, and include this infor-
mation in corporate reports. Internal coor-
dination and distribution of ownership for
the set objectives is essential for achieving
the ultimate success. For instance, objectives
set in relation to priority SDG targets related
to suppliers have a better chance of suc-
cess if they are “owned” by the department
responsible for engaging with and managing
suppliers. In all cases, individual account-
ability for progress on objectives will help
drive fruitful outcomes.
Reviewing and assessing the company’s
reporting cycle is the key to realize the antic-
ipated positive change. For example, syn-
chronization of internal reporting processes
with public disclosure helps to minimize
workload and maximize the relevance of
the company’s performance in relation to
priority SDG targets. In addition, periodical
review of the list of stakeholders can ensure
that the company will have full coverage and
consultations on its priority SDG targets.
Towards sustainable business?
All in all, there’s a strong business case
for investing in opportunities aligned with
the SDGs, and the benefits of meaning-
ful sustainability disclosures are well estab-
lished. Tim Mohin, Chief Executive, GRI,
said in this regard, “Investors want to see
balanced reporting that showcases a compa-
ny’s targets and progress against the SDGs.
Companiesshouldconsiderriskfactors
andimpactsonpeopleandthesoci-
ety in a focused manner and
strive to put out concise,
consistent, current
and compara-
ble data.” ‚