As we approach the end of my first full year leading GRI, I’ve been reflecting on the lessons I’ve learned about reporting and transparency. After a year of working with reporting professionals around the world and engaging with GRI’s network, I am even more convinced that transparency has the power to drive change – when organizations use it to disclose meaningful, actionable information.
Of course, having worked as a sustainability practitioner for more than two decades before joining GRI, I already knew this. After all, why would we all be working so hard to promote transparency if not for the positive impact it has on the world?
I shared some of my insights about the impact corporate sustainability can have on business in my 2012 book, Changing Business from the Inside Out: A Treehugger’s Guide to Working in Corporations. Some of the points I make in the book have risen up as fundamental focus areas for any organization working to use transparency to drive change.
Very soon after joining GRI it became clear to me that we all need to work on four Cs if we’re going to get a better return on our investment in sustainability reporting: I’ve talked about the need to make reporting more concise, consistent, comparable and current.
But we need to do more.
In the months since I started leading GRI to help even more companies measure what matters, a few things have stood out as key determinants of a company’s success in this area. So, I’d like to share five pieces of advice for sustainability professionals as we face the New Year:
1. Have a supplier responsibility program
When you start to peer into the supply chain, you notice that the deeper you look, the bigger the potential impacts that are going unmanaged. Companies are increasingly uncovering cases of child labor and modern slavery in their supply chains – even in the information age, there’s still plenty going undocumented, unreported and unresolved.
The first step towards ensuring a sustainable value chain is setting up a supplier responsibility program. Start by securing the buy-in and support of your company’s executives – that way, any guidelines you develop will be enforced throughout the organization. Establish your company’s code of conduct – covering issues like labor and human rights, the environment, health and safety, ethics and management systems – and roll it out internally. Then move to including the code of conduct in your supplier contracts, engaging them with the requirements before you begin monitoring suppliers for compliance. A critical aspect of success in this area (like so many others) is transparency. Ensure that suppliers are providing your company with the information necessary to identify and mitigate violations of your code of conduct.
If you haven’t already started working on this, it’s a good time to get started. There are already of plenty of regulations that require some form of transparency in the supply chain – the UK Bribery Act and the California Transparency in Supply Chains Act, for example. Plus, having a major scandal come to light within your supply chain can have major negative repercussions for your business, so establishing a supplier responsibility program is also a form of risk management.
2. Sustainability regulation in this space is on the rise – get ahead of the curve
A whole wave of recent regulations goes far beyond the supply chain, so it’s a good idea to get your reporting up to scratch before you hit a hard deadline. As of December 2016, EU Member States are required to have legislation in place for the EU Directive on the disclosure of non-financial and diversity Information, which requires large companies to include non-financial performance information in their annual reports. GRI recently released a report on the implementation of the directive in each EU member state as well as a linkage document to the GRI Sustainability Reporting Standards (GRI Standards).
Stock exchanges are also making their mark, with many recommending and even requiring listed companies to go beyond national and international regulations and report their non-financial impacts. All told, our latest tally is 119 policies in 56 countries and regions require some form of ESG disclosure. And when these policies require information from supply chains, you may have to report to your customers even when your business is not directly covered by the regulation.
3. Forget fragmentation
But is GRI the best choice, I hear you ask?
It really is time to debunk the myth of fragmentation. There are various means of reporting, including the GRI Standards, but these are not interchangeable – they have specific purposes. The fact that there are several is not an excuse to throw your hands up and do nothing.
Sustainability reporting has become common practice and is only growing. A recent KPMG study concluded that more than 90% of the largest 250 companies in the world now report ESG information and 75% of them rely on GRI for these disclosures.
With twenty years of experience, global adoption, increasing reference in regulation and capital markets, the GRI Standards should be your first port-of-call. The breadth of topics covered in the GRI Standards mean that any type of organization can report on the issues that are important to them. And GRI’s multi-stakeholder approach to standard setting assures global acceptance. They also reference the UN Guiding Principles of Business and Human Rights and many other international norms. And as the gold standard for reporting, they’re also the basis you need for integrated reporting.
4. Engage with the SDGs
Whether you are a seasoned reporter or new to the practice, the UN Sustainable Development Goals (SDGs) will shape the future. A set of 17 ambitious goals and more than 160 connected targets, the SDGs address the world’s most pressing sustainability problems, from poverty and inequality to climate change and food security. The private sector is critical for achieving the SDGs, not least because of the many trillions of dollars that must be invested in order to make achieving the goals feasible.
The good news is that engaging with the SDGs brings great business benefits. It has been interesting for me to observe this year how seriously businesses have taken action on the SDGs, and it’s easy to see why they’re doing it: engaging with the SDGs helps focus your sustainability efforts to make them relevant and as impactful as possible, and it makes transparency an even more powerful driver of change.
GRI has the resources to help companies connect their work to the SDGs. Working together with the UN Global Compact, GRI has produced the report, Analysis of the Goals and Targets, which aims to help companies understand how they impact the SDGs and their targets. The report provides a list of indicators and disclosures to make reporting on the SDGs straightforward and simple to execute. In 2018 we plan to provide practical guidance on how companies can advance progress on these all important goals.
5. Adopt the GRI Standards
If you haven’t started making plans to use the GRI Standards for your next report, it’s time to get real. We released the GRI Standards in October 2016, and by 1 July 2018, all companies using the GRI framework need to have made the switch.
With nearly 45,000 downloads and more than 150 companies in the GRI Standards Pioneers program, the uptake has been great so far. And we provide plenty of support and advice for getting started. Watch this space as we roll out even more new information and services in 2018 to help companies report on their most important sustainability impacts and opportunities.
Turn reporting into results in 2018
These are a few of my key take-aways from a year at the helm of GRI. But, perhaps the most important lesson is the main reason I decided to take this role in the first place. It’s the transformative power of transparency. In all my years in this field, I have seen this power at work. We often say, “you manage what you measure” or “sunshine is the best disinfectant.” We use these phrases as emblematic of the most important lesson of all: It’s not about the report, it’s about what you do with the information.
So, as you reflect on your 2017 and look ahead to 2018, also think about your legacy. I believe that we all share a basic altruism and want our work to contribute to bettering people and the planet. If this resonates with you, let’s work together in the New Year to advance sustainable development.
Here’s wishing you a wonderful holiday season and a fabulous year ahead.