If you want to learn about the Global Reporting Initiative (GRI) framework for sustainability or corporate social responsibility (CSR) reporting, I will be teaching a two-day training event in Chicago, August 27-28, 2015. To register, visit http://www.isoscsr.org/trainings/gri-training-chicago. We should have a great time in a great city!
I have been away for a few weeks finishing the second edition of my book, Sustainability Reporting: Getting Started, to be published soon by Business Expert Press. The second edition is up-to-date with discussions about the GRI G4 guidelines, Integrated Reporting <IR> framework, and Sustainability Accounting Standards Board (SASB) guidelines. When the new edition is available, I will let you know.
In the past few weeks, I have read a lot of published GRI G4 sustainability reports. A whole lot! It was exciting to see so many organizations reporting. The people who wrote them ranged from novice to experienced reporters. Some were great reports with seemingly transparent details about their environmental and social impacts. Some were not as forthcoming.
For example, one of the GRI human rights indicators, (G4-HR12), requires reporting the “number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms.” While a few of the companies disclosed that there were mechanisms to deal with human rights violations, they then reported that the number discovered was confidential. Why is the number confidential? Why did they bother to report this indicator at all? It does their stakeholders no good to say there were problems, but that they have chosen not to disclose them. Let’s hope their stakeholders demand answers to such questions.
I felt much better about the transparency of companies that did report how many grievances were filed and how many were resolved. But should I feel better just because they published the numbers? Are these numbers accurate and how would a reader know? As external stakeholders, how would we know if anything in the report is trustworthy? Getting companies to publish sustainability reports is progress, but the next push in sustainability reporting is assurance of report content by independent, third parties.
Stay tuned for my next blog posts when I talk more about assurance.
Corporate stakeholders (i.e., employees, customers, investors, and others) have increased their demands on companies for transparency and accountability. In response to this, more and more companies have issued sustainability reports.
What should be expected from a report? Should it be complete to the last detail? Or can we accept something less? When a company commits to the reporting process, stakeholders have understandably high expectations. Some readers can be very skeptical of a report’s truthfulness. Many stakeholders may view them as mere “greenwash” with difficult topics having been suppressed, while others see them as providing valuable information about a company’s long-term prospects. Who is right? It depends.
It is certainly good to be skeptical about information that organizations publish, but it is also possible to be too skeptical. What do we expect from these organizations and their sustainability reports?
As someone who likes to read sustainability reports and has been involved with preparing reports, I can tell you that there are multiple sides to the sustainability reporting story. The organization that prepares the report wants it to be a good story and also a positive story. When you think about it in personal terms, it makes sense. We all want to portray our best side. Of course, the key to a good report from the reader’s perspective is portraying an accurate story, including both good and bad events, strengths and weaknesses. Yet to report an accurate story, you have to have the information available. Although one has every right to question whether information has been suppressed, many times it may simply not be available.
An organization’s sustainability development should evolve over time, as should its ability to report about its progress. One period’s report should not be viewed out of context. When reading a report, consider the organization’s sustainability history and any previous reports it may have made. If an organization is publishing its first report, maybe we should cut it some slack. Preparing and publishing a report is a big achievement requiring a significant commitment of resources. A large organization will need many months to produce a first report. Later reports can be produced more quickly because the mechanisms for data collection have been put in place. The question the reader needs to raise is, are the data contained in the reports getting more thorough, more comprehensive, and more revealing? Or are the photos getting prettier?
Reading sustainability reports takes time and effort. It is essential to do so using the context of an organization’s history, industry peers, and sustainability maturity.