2003 j burg oecd
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
Improving Transparency and Improving Transparency and Communication of Corporate Communication of Corporate
Sustainable Development Sustainable Development PracticesPractices
Paul HOHNEN, Director, Strategic DevelopmentJohannesburg, 19 November 2003
The Roles of the OECD MNE and GRI The Roles of the OECD MNE and GRI Sustainability Reporting GuidelinesSustainability Reporting Guidelines
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
outlineoutline
why improve transparency & communication?
what is GRI?
how the OECD MNE and GRI guidelines can help.
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
transparency … an old concepttransparency … an old concept
"It is wise to disclose what cannot be concealed."
Friedrich von Schiller (1759-1805), German Dramatist
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
… …with new relevancewith new relevance
“ Transparency is on the rise, not just for legal or purely ethical reasons but increasingly because it makes economic sense. Firms that exhibit openness and candour have discovered that can better compete and profit”.
Tapscott and Ticoll, Wall Street Journal, 14 Oct 2003
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
Increased demandsIncreased demands
governments
institutional investors
shareholders
civil society organisations (CSOs)
employees & unions
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
Johannesburg 2002Johannesburg 2002
“ We agree that there is a need for private sector corporations to enforce corporate accountability, which should take place within a transparent and stable regulatory environment” (WSSD Declaration)
Governments agree to “encourage industry to improve social and environmental performance through voluntary initiatives … including public reporting on environmental and social issues …”. (WSSD Plan of Implementation)
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
Johannesburg 2003Johannesburg 2003
‘Transparency is both an integral part of effective public governance and a core feature of international investment policy rules.’
‘Participants recognise the key role of governments to :
promote transparency
enhance … accountability’
Draft Co-Chairs’ Statement, OECD Global Forum on International Investment, 18 November 2003
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
marketmarket Investors demanding more non-financial information
“ Investors cannot make judgments about the way business is managing sustainability and corporate responsibility issues unless companies disclose relevant information”. – Henderson’s Global Investors, 2003
Governance codes
Australian Standard 8000, King Commission, etc.
Stock exchanges
U.K. expanding the definition of “materiality” for financial reporting
Johannesburg Stock Exchange
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
investorsinvestors
Tangible assets
Share value
intangible assets
financial reporting
Brand
Reputation
Human capital
Licence to operate
Share value
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
the naked corporationthe naked corporation
level of activism
Level o
f in
form
atio
n ‘mushroom’
vanguard trust
danger
Tapscott & Ticoll, 2003
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
benefits?benefits?
“The amount of information companies provide in their annual reports is correlated to market risk and valuations.”
“Companies that distinguish themselves by disclosing more information lower their market risk and therefore lower their cost of capital.”
“Non-financial disclosure in annual reports needs improvement.”
““Transparency and Disclosure” study by Standard & Poor’sTransparency and Disclosure” study by Standard & Poor’s
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
corporate governancecorporate governance
“…companies no longer act independently from the societies and the environment in which they operate”.
“… social, ethical and environmental issues … can no longer be regarded as secondary to more conventional business imperatives
South Africa : King 2 Report on Corporate Governance, 2002
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
outlineoutline
why improve transparency & communication?
what is GRI?
how the OECD MNE and GRI guidelines can help.
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
sustainability dilemmassustainability dilemmas
what does ‘sustainable development’ mean in practice?
what should I communicate on?
who am I communicating with?
how do I know it is useful information?
what system do I use (industry, sector, national, international?)
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
GRI’s mission
a generally accepted global framework for sustainability
reporting
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
missionmission
to make sustainability reporting as routine & valuable as financial reporting
used by all organisations
based on a multi-stakeholder process for producing generally-accepted guidelines for voluntary use
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
what does it offer?what does it offer?
products
Guidelines
Sector Supplements
Protocols
Resource documents
process
multi-stakeholder framework
learning forum
continuous improvement
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
what does it offer ?what does it offer ?
consistency
one framework, worldwide
links local, national, global
links to international goals: MDGs, A21, etc.
potential for common software, etc.
credibility
developed by stakeholders
market leader
widely used and supported by business, government and stakeholders
comparability
analysts
investors
employees
tax-payers
suppliers
CSOs
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
GRI reporter uptakeGRI reporter uptake
0
100
200
300
400
500
600
700
1999 2000 2001 2002 2003 2004 2005
330+
2005 Target 600+
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
Global : GRI reporters (by countrylobal : GRI reporters (by country))
Austria , Denmark, Italy
3
Finland 9
Netherlands, Sweden 13
Germany 16
France 18
Spain 18
Japan 60
United States of America 40
Australia 20
South Africa 11
Canada 8
Switzerland 5
Brazil, New Zealand 4
Costa Rica, Thailand 3 Chile, China,
India, Hungary, Norway 2
United Kingdom 41
Argentina, Malaysia,
Mauritius 1
Belgium, Ireland 2
Portugal 1
Now 18!
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
official recognitionofficial recognition
governments agree to “encourage industry to improve social and environmental performance through voluntary initiatives … taking into account such initiatives as … the Global Reporting Initiative Guidelines on sustainability reporting…”.
UN WSSD Plan of Implementation, Sept. 2002
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
business recognitionbusiness recognition
“… the GRI and AA1000 are your best bets, not only for reporting, but for building structured models for transparency-driven stakeholder engagement.”
Don Tapscott and David Ticoll, The Naked Corporation – How the Age of Transparency Will Revolutionize Business, (2003)
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
“ Investors cannot make judgments about the way business is managing sustainability and corporate responsibility issues unless companies disclose relevant information. …
Overall, we view the GRI as setting the global benchmark for disclosure and encourage companies to produce reports which are in accordance with the GRI guidelines.”
SRI Annual Report, Henderson Global Investors, May 2003
market recognitionmarket recognition
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
outlineoutline
why improve transparency & communication?
what is GRI?
how the OECD MNE and GRI guidelines can help.
25
GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
“The European Parliament … highlights the importance, as stressed by the Commission, of building trust and consensus and support for internationally accepted principles such as the OECD Guidelines for Multinational Enterprises and the Global Reporting Initiative (GRI).”
European Parliament Report on Corporate Social Responsibility (Final A5-0133/2003), April 2003
GRI & OECD Guidelines : The SynergiesGRI & OECD Guidelines : The Synergies
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
OECD OECD MNEs MNEs
GuidelinesGuidelines
GRI GRI GuidelinesGuidelines
•all organisations
•for corporations
•government approved
•government-endorsed
•guidance on what to do
• guidance on what and how
to report
code of conduct
reporting framework
respective rolesrespective roles
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
OECD OECD MNEs MNEs
GuidelinesGuidelines
GRI GRI GuidelinesGuidelines
• voluntary
• economic, social and environmental
• global
• relevant to companies of all
sizes
• multi-stakeholder
common characteristicscommon characteristics
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
OECD OECD MNEs MNEs
GuidelinesGuidelines
GRI GRI GuidelinesGuidelines
economic
environment
employmentconsumers
bribery
science & technology
competition
taxation
human rights
governance
performance indicators
stakeholder engagement
management systems
reporting principles
common issue focuscommon issue focus
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
GRI/OECD MNE ‘User Guide’GRI/OECD MNE ‘User Guide’
developed by GRI as a contribution to highlighting & advancing the shared goals of OECD MNE and GRI Guidelines
to help organisations assess and, if they wish, communicate their use of the OECD Guidelines
a draft comparative table for free public use
designed to be improved through use and feedback
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
CSR : the road mapCSR : the road map
UN Summits
(e.g. 2002 Johannesburg, Rio 1992)
ILO Core Conventions Treaties
on human rights,
climate, biodiversity,POPs, etc.
OECD Anti-Bribery
Convention
Sustainable development
UN Millennium Development Goals
unsustainable development
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
CSR ‘initiative proliferation’CSR ‘initiative proliferation’
around 300 separate CSR codes, principles, performance standards, management standards, etc.
covering one or more of environmental, human rights, or labour sectors
national, regional, international scope
by company, by sector
developed by individual governments, industry associations, academics, etc.
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
CSR “initiative proliferation”CSR “initiative proliferation”
Benefits
encourages creativity
no ‘one size’ solution
multi-level engagement
underlines interest
Burdens
‘white noise’
market confusion
reduces use
limits learning
increases cost
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
a global CSR management toolkita global CSR management toolkit
high value features :
global
voluntary
triple-bottom line
multi-stakeholder
flexible
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
Global CSR Management : Chaos Global CSR Management : Chaos and Confusion?and Confusion?
Performance reporting
Codes,
Standards
Corp. governance standards
Management standards
Performance standards
Assurance
Standards
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
… … or an Emerging Global CSR or an Emerging Global CSR Management Framework?Management Framework?
OECD,UN GCCodes
OECD
Corp. Gov’t
Principles
GRIReporting
Framework
ISO Manag’t
Standards
SAI,etc
Perform. standards
AccountAbility
AA 1000 AS
Uptake =
Take-off
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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org
conclusionsconclusions
transparency a key element of sustainability
existing initiatives provide guidance on what to do
in ways that promote learning, partnerships
GRI invites you to :
a) use its Guidelines and provide feedback
b) propose and fund development of new tools
c) consider how it can be used to advance your goals.