The GRI framework is used by 74% of the 250 largest corporations. So what does this have to do with cities? As the most widely used framework, it is known by a variety of investors, governments, and NGOs. Many of the same investors, governments, and NGOs are scrutinizing city reports. If the city reports were prepared with a widely used standard, the reports would likely be better understood and more usable for decision making.
Cities have economic, environmental, and social impacts that should be measured in a systematic approach in order to be managed. The GRI Standards provide such an approach and encompass the triple-bottom-line by focusing on an organization’s economic, environmental, and social dimensions. All three are necessary to measure a city’s progress toward sustainable development. The GRI Standards state that organizations need to report only what is important to that city and to be transparent about its determination process.
What are some of the benefits? They are adaptable because they can be applied to any organization of any size and in any location. Cities can compare their progress from period to period. Does using the GRI framework allow for direct comparisons across cities? No two cities are directly comparable but by using the same standards sharing lessons learned would be easier. Cities can assess their economic, environmental, and social risks in addition to engaging their stakeholders about what impacts are important.
The GRI Standards provide metrics that could be used for input into an integrated report under the International Integrated Reporting Council Integrated Reporting <IR> Framework. The <IR> Framework allows organizations to demonstrate how they create value in the short, medium, and long terms. This is especially relevant for cities as they plan for the long term. For example, if a city invests in electric buses powered with cheaper renewable energy, this investment creates value for the city in many ways. The city’s assets have increased because it purchased the buses. It now has a fleet of electric buses. Value is created each year because fuel and maintenance costs are reduced. The reduction in carbon emissions improves air quality, which results in the improved health of citizens. As a result, health care costs are reduced.
Cities are getting a lot of attention for taking action on climate change. This action is born out of necessity. Cities have over 50 percent of the planet’s population. It is not surprising that they create 75 percent of greenhouse gas emissions.
By 2050, cities are estimated to have 70 percent of the planet’s population. With this expectation, cities are compelled to respond to increases in waste, effluents, water demand, traffic congestion, and air pollution, just to name a few challenges. One of the ways they are responding is by sharing lessons learned with other cities. Many are joining networks such as C40, ICLEI, and ANSI Network on Smart and Sustainable Cities.
Cities are taking the current and coming challenges seriously. Many cities are preparing sustainability plans, which state goals and targets for carbon emissions, economic initiatives, and waste management. Over time, the plans are assessed using periodic progress reports comparing actual results to targets. In most instances, cities use whatever reporting format they want. These reports are great for presenting what is working and what is not. But is a non-standardized reporting approach optimal for better management, transparency, and communication?
If you are using the GRI Sustainability Reporting Standards, you may want to include Sustainable Development Goals in your reporting. How can you align the two frameworks? There are new trainings being offered by ISOS Group to help you do that.
Sustainable Development Goals Module: This workshop is designed to support the alignment between GRI Guidelines and Sustainable Development Goals (SDGs). Since many organizations have yet to set targets for minimizing impacts to the international agreements on greenhouse gasses and beyond, using the SDGs can be a great way to cast a net toward larger objectives and develop actionable strategies for implementation. Instructors will work to demonstrate actionable steps that can be taken to institute specific SDGs. Upon course completion, participants will receive a certificate directly from GRI.
1.1 By 2030, eradicate extreme poverty for all people everywhere, currently measured as people living on less than $1.25 a day
1.2 By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions
1.3 Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the
1.4 By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance
1.5 By 2030, build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social and environmental shocks and disasters
1.a Ensure significant mobilization of resources from a variety of sources, including through enhanced development cooperation, in order to provide adequate and predictable means for developing countries, in particular least developed countries, to implement programmes and policies to end poverty in all its dimensions
1.b Create sound policy frameworks at the national, regional and international levels, based on pro-poor and gender-sensitive development strategies, to support
accelerated investment in poverty eradication actions
These targets are ambitious, and businesses have an important role to play in achieving them! Many businesses are already doing so, and there are many examples.
So your next questions are why and how would my business get involved?
…we must invest in people – in education, skills development, health care. This will help equip people for decent jobs and incomes. It will boost purchasing power. The virtuous cycle between human capital, jobs and income is central to building healthy local markets and a healthy world economy. It is good for people and good for business.
Evaluating your entire value chain (i.e., the full lifecycle of your products and services) can help identify areas that can reduce your negative impacts and improve your business simultaneously. Your business decisions about things such as employee wages, working conditions, product pricing, or raw material sources have impacts on people in poverty.
You can measure your direct impacts on the local economy. What proportion of your spending is on local suppliers at significant locations of operations? To illustrate how UPS affects the local economy, here is an excerpt from its 2015 sustainability report.
In 2015, UPS spent approximately US$943 million in procurement with small and diverse businesses in the United States.
A third-party study on the economic impact of our spending with small businesses, as well as minority-, women-, veteran-owned, and other diverse suppliers in 2015, found that UPS contributed more than US$2.3 billion to the U.S. economy (U.S. GDP) and sustained more than 14,200 jobs in the supply chain and local communities. A breakdown of that US$2.3 billion includes US$941 million in direct economic benefit from suppliers’ operations and activities; US$639 million in indirect impact from the economic benefit and employment supported in the suppliers’ respective supply chains from procuring goods and services; and US$743 million in community impact from the wider economic benefits that arise when the suppliers’ employees and those in their supply chains spend their earnings. Overall, for every million dollars that UPS spends with small and diverse suppliers, 15 jobs are created with those companies in their local communities.
If supply chains are a significant part of your business, evaluating them not only on economic criteria but also on social criteria can be an effective risk management tool. Do you have policies to screen for suppliers that adhere to international and your company-specific human rights and labor standards? You can have a positive influence by demanding adherence to these standards. This is a proactive approach that is much less costly than a reactive one.
How you are investing in the economic well being of your employees has a direct economic impact on poverty alleviation. Lower incomes reduce access to adequate housing, quality education, social networks, and social status among others. Evaluating the wages paid along with how they compare to the minimum wages in the local area puts a focus on a company’s economic impact on workers. For example, Abengoa, a Spanish company that applies technological solutions in the energy and environment sectors, disclosed in its 2015 sustainability report the percentage paid to its workers above the local minimum wage.
How does your company change the productivity of organizations, sectors, or the whole economy?
Is your company involved in economic development in areas of high poverty?
Does your company’s economic impact in a particular location improve or deteriorate social or environmental conditions?
What is the availability of your products and services for those on low incomes?
What should you do with your answers to these questions and your evaluation of your business? You can incorporate these issues into your business strategy. You can set targets for improvement. You can publish a sustainability report to measure your progress.
Baxter International is an example of a company that has set targets and reported them its sustainability reports. In its 2015 report, Baxter pledged to increase it spending with diverse suppliers by 50%, from 4% of relevant spending in 2015 to 6% in 2020. These published targets are public commitments that reveal the company’s sustainability strategy and implementation plans.
To be a part of the solution to end poverty, your business can be involved; it can measure its impacts, set targets, and report its progress in a sustainability report.
The next blog will examine how your business can help achieve SDG Goal 2 Zero Hunger.
It was a great training with the ISOS Group in Chicago, August 17-18. The training was interactive and provided insights from the trainers and the participants who were from the transportation sector, NGOs, and consultancy firms. If you missed this opportunity, there are more coming. Two new offerings include a GRI Practitioners Specialty Module and Transition from GRI G4 to GRI Standards. Take a look at the upcoming schedule for San Francisco, New York City, and Boulder, Colorado. Hope to see you there!