sustainability reporting: green is the new black
DESCRIPTION
A high level overview of the issues, challenges and frameworks/standards for sustainability reporting. Includes a focus on XBRL.TRANSCRIPT
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GREENGREENBLACKis theGREENGREENBLACKnew
Brad Monterio, Managing DirectorColcomgroup and CMH Partners LLC
19th XBRL International ConferenceParis, France June 25, 2009
© Colcomgroup 2009
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Pros and Cons�Sustainability
�Non-Financial
Reporting Types
�Stakeholders
�Value Proposition
�Frameworks & �Frameworks &
Standards
�Challenges
�Opportunities
�Final Thoughts
© Colcomgroup 2009
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Frameworks
Issues
Needs
Pros and ConsGreen is the
new Black?
�“Green Reporting”: 37
Million
�“Environmental �“Environmental
Reporting”: 56 Million
�“Sustainability
Reporting”: 85 Million
© Colcomgroup 2009
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Frameworks
Issues
Needs
Pros and ConsGreen is the
new Black?
�Dynamic shift in
public opinion
�Market permission to
be green AND
profitable
�Looking at the entire
supply chainsupply chain
�Not just a fad or short
lived trend
© Colcomgroup 2009
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Pros and ConsSUSTAINABILITY
The ability to meet the
needs of the present
without compromising the
ability of future
generations to meet their generations to meet their
own needs.
World Commission on Environment and
Development (The Bruntland Report)
© Colcomgroup 2009
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Pros and Cons�Sustainability Reporting
or Environmental
Reporting
�Corporate Social
Responsibility Reporting
�ESG Reporting
�Enhanced Business �Enhanced Business
Reporting
�KPIs
�Others (e.g., risk
reporting, business
excellence)
© Colcomgroup 2009
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ShareholdersPartners and
Suppliers
Employees Customers
STAKEHOLDERSGovt. &
RegulatorsNGOs
Local
CommunitiesMedia
STAKEHOLDERS
© Colcomgroup 2009
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Pros and Cons� Improves transparency
�Helps manage entire supply chain
�Yields cost savings in short term (e.g., waste reduction)
�Builds long term value (e.g., brand loyalty)
�Enhances brand
�Encourages innovation (e.g., renewable energy)
© Colcomgroup 2009
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Pros and Cons�Attracts capital (e.g., CleanTech funds)
�Impacts share price (e.g., Coca Cola, Nike, Sunoco)
�Gives competitive �Gives competitive advantage (vs. peer group)
�Helps manage risk (e.g., reputation risk)
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Frameworks
Issues
Needs
Pros and ConsFRAMEWORKS
& STANDARDS
�WICI/EBRC
�ESG Framework from DVFA/EFFAS
�G3 Framework from Global Reporting Initiative
�UN Global Compact 10 Principles (Environment, Principles (Environment, Labor etc.)
�OCEG (Open Compliance and Ethics Group) Governance Risk & Compliance Framework
�Prince of Wales Accounting for Sustainability© Colcomgroup 2009
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Frameworks
Issues
Needs
Pros and ConsFRAMEWORKS
& STANDARDS
�Int’l Union for Conservation of Nature (IUCN)
�SustainAbility with UNEP
�Carbon Disclosure Project
�CERES Principles
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Frameworks
Issues
Needs
Pros and Cons
“Sustainability is here to stay as a central business issue, yet many corporations do not have the right resources or organization to comply with organization to comply with the new demands efficiently or, more importantly, to turn them to business advantage.”
-Bob Lurie, Monitor Group
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Pros and Cons�Emerging area – not
understood by
companies or
stakeholders
�Usually not in the
business plan
No universal �No universal
standard… yet
�Often championed
by Marketing or PR,
not C-Suite
�Can’t measure© Colcomgroup 2009
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Pros and Cons�Current reports:
�Not well
understood
�Unusable by many
�Non-comparable
�Lack independent �Lack independent
assurance
�Missing link with
financial
performance
© Colcomgroup 2009
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Pros and ConsOPPORTUNITIES
�Collaborate on a global standard (wiki approach)�Link to financial performance�Elevate to CFO responsibilityresponsibility�Integrate w/business planning�Utilize XBRL as underlying framework to ensure interoperability with XBRL tagged financial information
© Colcomgroup 2009
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Pros and ConsOPPORTUNITIES
�Satisfy investor & analyst demand for sustainability information�Increase importance of non-financial reporting to internal and external internal and external stakeholders�Leverage mass collaboration model to develop a framework and reporting standard that better matches company and user needs
© Colcomgroup 2009
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Pros and ConsFINAL THOUGHTS
Isn’t this just ‘reporting’?
Will ‘being green’ become all about just ‘being’?
Without sustainable Without sustainable business models, good environmental practices are meaningless
Without a global standard, are reports meaningless?
© Colcomgroup 2009