Category Archives: Global Reporting Initiative (GRI)

Sustainability Training in New York City

Central Park

Central Park Photo by Michael White

I have been busy and away from my blog for a while but wanted to alert you to the ISOS Group’s GRI G4 Sustainability Reporting training April 27-28, 2016. I will be one of the instructors along with Eric Dziedzic of CRx Solutions. In addition, Stephen Donofrio, Founder, Greenpoint Innovations and Monika Kumar, Environmental Specialist, World Bank, will be conducting the CDP training session on April 29

If you haven’t signed up yet, please consider joining us in New York City at IFF, International Flavors & Fragrances Inc. I can tell you from past experience that it is a great facility for the training.

I hope to see you there!

Sustainability Reporting Training Recap

Lincoln Mem

Lincoln Memorial

Photo by Gwen White

Two weeks ago (March 15-18, I taught the Integrated Reporting <IR> Framework at the World Bank in Washington, DC, with Nancy Mancilla of the ISOS Group.  The World Bank employees were great and helped make it an exciting and engaging session. It is always a great experience training with Nancy, who incorporates her substantial knowledge and experience into the trainings.

During the World Bank session, we covered the benefits of using the <IR> Framework and how in particular the framework works for public agencies. <IR> allows an organization to explain how it creates value over the short, medium, and long terms. It does not replace other reporting frameworks but is the next step for organizations to move beyond providing separate sustainability (i.e., economic, environmental, and social) and financial (i.e., assets, liabilities, revenues, and expenses) metrics. It helps organizations tie together these metrics to see the big picture of their opportunities and risks; this involves reporting about its strategy, governance, performance and prospects in the context of its environment. To prepare this report, an organization must take an in-depth look at the inputs (e.g., raw materials, equipment, human resources) and outputs (e.g., finished products, waste, emissions) of its business model as it relates to risks and opportunities. For example, an organization’s decision to invest in an energy efficient production facility affects its profits by reducing costs and the environment by reducing emissions. In an integrated report, the organization can explain how the interrelated effects of reducing its annual operating costs and greenhouse gas emissions reduce its risks. To illustrate, the risks associated with increases in future energy costs are lessened. Reducing these risks could increase an organization’s opportunities to obtain future financing for other capital projects.

During the IR training, I shared my knowledge and experience with university, city, and airport sustainability reports in the <IR> context. In one of my examples, I discussed a city that invested in a more fuel-efficient transportation system that reduced costs, fuel usage, and carbon emissions. This investment has long-term consequences for reducing operating costs, carbon emissions, and human healthcare costs. It has the potential to affect how the city is perceived in terms of managing its financial and environmental impacts. This could in turn have consequences for the city’s bond ratings. An <IR> report would discuss these issues as they relate to the city’s costs, revenues, opportunities, and risks in the short, medium, and long terms.

Monika Kumar, Environmental Specialist with the Corporate Responsibility Program at the World Bank, and I were co-trainers at the GRI G4 sustainability reporting session at the National Geographic Headquarters March 16 and 17. Monika is an excellent trainer with a wealth of experience from her work preparing the World Bank’s sustainability reports. We had a stimulating two days with a group of enthusiastic participants. These trainings provided participants with the opportunity to learn in detail about the GRI G4 framework with current examples of reporting companies. In addition to learning about the GRI principles and their application, we focused on the entire reporting process from planning to publishing the finished report. In this training, we also learned a great deal about our participants’ sustainability reporting experiences. They shared their successes and challenges, which was quite useful to all. Interactive trainings such as this one make our training interesting and memorable.

On the final day of training, Monika Kumar and Stephen Donofrio presented on responding to the CDP questionnaires on climate impacts. This training helped participants understand how CDP relates to their organizations and how they could apply it to their business contexts. Stephen, Principal & Founder of Greenpoint Innovations LLC, was formerly Vice President of CDP North America (Carbon Disclosure Project), where he served as the Canada Manager and directed the region’s investor disclosure program for climate, energy, water, forest-risk commodities.  As a co-presenter, Monika discussed her experiences working on the CDP questionnaires for the World Bank. It was a well-done presentation!

If you missed the GRI and CDP trainings in March, you have another opportunity April 27 – 29, in New York City, hosted by International Flavors and Fragrances.

I hope to see you there!!

Sustainability Reporting Training in Washington, DC

DC

Washington Monument

I will be teaching with the ISOS Group at two training sessions next week (March 15-18) in Washington DC.  We will cover the Integrated Reporting <IR> Framework and GRI G4 Sustainability Reporting Guidelines. The IR session is a private engagement at the World Bank, while the GRI G4 session is at the National Geographic Headquarters. In addition to the GRI G4 training, CDP certified training is being offered on March 18. Please join us.

By the way, if you are interested in attending a training in the future contact the ISOS Group. Customized private training sessions are also available.

 

Cities and Sustainability Reporting Revisited

24012774975_78cf3c0727_z-2Chicago ‘L’

Photo by Michael White

I advocate often for cities to prepare sustainability reports. In a previous blog, “GRI Reporting for Cities,”  I made the case for cities to use the GRI G4 Sustainability Reporting Guidelines so cities can manage their progress in achieving environmental, economic, and social goals.

So is there more can I say on this subject? You bet!

The focus on cities as a vehicle to sustainable development keeps gaining traction. City governments face daunting economic, environmental, and social challenges. SustainAbility has published reports that make the case for focusing on cities as a critical approach for improving the Earth’s sustainability. Cities may well be the key to addressing the planet’s many challenges, but they cannot solve them alone. In its report Citystates II The Case for Corporate Leadership in Urban Sustainability, SustainAbility encourages public private sector partnerships. It is a compelling argument.

There is an urgent need, and a huge opportunity, for local and international stakeholders to prioritize the sustainability requirements of cities, and with them, broader sustainable development. Chief among these stakeholders is business, which has both the opportunity and responsibility to take a leadership role (and the chance to reap substantial benefits in the process), and without which cities will be unable to innovate and scale their efforts at nearly the required pace. Though there are many leading examples of cities and companies working together to accelerate progress on urban sustainability, this agenda is only beginning to enter mainstream business thinking, and overall city-business collaboration remains underdeveloped in aggregate and challenging in practice.

The last comment strikes me as quite interesting, “…this agenda is only beginning to enter mainstream business thinking, and overall city-business collaboration remains underdeveloped in aggregate and challenging in practice.”

What can be done to bring this along?

Cities need to publish sustainability reports. By doing so they would be better able to communicate their sustainability strategy, risks, and opportunities. Cities need to be transparent so businesses can decide whether to engage in a private public partnership or to relocate to the city.

Businesses analyze a variety of information to make decisions. A city sustainability report would be an important piece of the analysis. If a business is interested in building a new plant in a city, it may have concerns about the environmental health of the city.  A sustainability report would provide  information about a city’s greenhouse gas emissions, waste management, water quality, effluents, and transportation. The environmental health of a city would have impacts on its workers or its production processes. For example, water availability and quality may be essential to a company’s production processes or delivery of services. In the hospitality industry, water for cleaning, bathing, and cooking is a key part of providing services. City water sources and quality are important to the hospitality industry. Companies may think twice about building a hotel that would require their own large capital investments to insure sufficient water quantity and quality.

In addition, a sustainability report would provide information about the economic health of a city. Information about economic resources generated and disbursed by a city can indicate major economic issues facing a city. For example, a trend of decreasing tax revenues may affect how a city seeks to fund its services. Other sources of revenues such as public private partnerships may be on the rise. The disclosure of successful partnerships may encourage more. Without a sustainability report that discloses relevant economic metrics, a city may miss opportunities.

Cities can also help themselves be more efficient and effective by reporting. For example, reporting energy, water, and fuel usage enables a city to provide benchmarks. Targets can then be established to reduce future usage and costs. Reporting on the quality of services delivered through customer satisfaction feedback can provide information about a city’s effectiveness. Customer satisfaction would be a metric under products and services in the social category of a sustainability report. Cities can identify areas that need improvement. A well-run city can communicate its progress and effectiveness by disclosing relevant metrics in a sustainability report.

How can we convince cities how important sustainability report is to their future? Let me know what you think.

Will Accountants Save the World?

 

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NASA/Goddard/Arizona State University

As an accountant, I was thrilled to read that Peter Bakker, President of World Business Council for Sustainable Development , said, “Accountants would save the world.” This should make any accountant smile. The realist in me knows that it will take a big “village” to save the world, but accountants can play an important role.

At an experts panel discussion in Amsterdam, Marjolein Baghuis stated, “… the conclusion was that accountants can certainly play a role in making companies more sustainable, but the profession is not quite ready to deliver on this promise without further education.” I agree!

Accountants have a long history of providing information to decision makers. They have been in the business of providing information since the 15th century. Really! If you want to read a great book, I recommend The Reckoning: Financial Accountability and the Rise and Fall of Nations by Jacob Soll.  Accountants are big players in the fortunes of companies and nations. With their experience in providing information for decision-making, accountants can provide important sustainability information to companies, governments, and the public.

Sustainability reporting is unfortunately not currently recognized as an important topic in accounting education in the United States. In a curriculum crowded with courses in tax, auditing, financial accounting, and management accounting, training in sustainability reporting is viewed as nice but not necessary.

Why is this?

There are several reasons.

  1. It is not covered on the major certification exams such as the Certified Public Accountants (CPA) exam and the Certified Management Accountant exam.
  2. There is no demand for sustainability reporting skills in accounting public practice because there is no legal requirement to do it in the United States.
  3. Inside companies, accountants are not usually tasked with sustainability accounting and reporting.
  4. Accountants in small to medium sized public practices do not traditionally offer sustainability services.
  5. Most small to medium sized accounting firms do not know how to make the business case for sustainability reporting for their own firm or for their clients.

Over the years there have been attempts to include sustainability reporting as part of accountants’ education but with little progress. Other traditional accounting topics take precedence. Without the demand, change will be slow.

Once in practice, however, accountants who desire to learn about sustainability reporting can look to several professional organizations. The American Institute of Certified Public Accountants promotes the benefits of sustainability services and provides information to its members. The International Federation of Accountants (IFAC) offers information and resources. IFAC is actively engaged with  the Prince of Wales’ Accounting for Sustainability Project, the International Integrated Reporting Council, the Climate Disclosure Standards Board, and the Global Reporting Initiative (GRI). Accountants can attend GRI certified sustainability reporting training courses offered by GRI Training Partners such as the ISOS Group.

How will demand for sustainability reporting be created? Here are some possibilities.

Mandatory reporting – Nothings creates a demand for services like a legal requirement. Examples abound – auditing, tax, Sarbanes-Oxley Act compliance.

Demand by financial institutions – As part of the evaluation of companies, lending institutions could require a sustainability report. This report would enable banks to do an expanded risk assessment. This would include a company’s environmental and social risks, which are directly tied to their economic risks.

Demand by local governments – Local governments might consider requiring sustainability reports from companies within the city limits. This would be beneficial to cities in assessing a company’s economic, environmental, and social risks. By complying, organizations would be demonstrating their good citizenship and assessing their own risks.

What do you think?