UN inaugurates international sustainability reporting body

The United Nations has formally inaugurated its international sustainability reporting institution, the Global Reporting Initiative (GRI), which is intended to provide a global sustainability reporting standard.

The GRI was informally established in 1997 by the Coalition for Environmentally Responsible Economies (CERES) and the UN Environmental Programme, UNEP. The latest event marks its formal establishment as a permanent, independent global institution.

The GRI’s mission as an international standards body is to develop, promote and disseminate a generally acceptable framework for sustainability reporting – that is, reporting on the environmental, economic and social performance of organisations. Its aim is to make sustainability reporting as routine as financial reporting, and to achieve the highest standards of consistency and rigour.

Thousands of representatives of the business world, as well as accountants, investors, environmentalists, labour organisations and human rights bodies worked to design the initial common framework, known as the Sustainability Reporting Guidelines, and many are involved in the revision, due out this July.

Over 110 major corporations have already pioneered sustainability reporting using the guidelines, including BT, Canon, the Co-Op Bank, Ford, Nike, Nokia, and Shell. However, in the UK there has been less success with the voluntary approach despite Prime Minister Tony Blair’s challenge to the top 350 companies to instigate green reporting by the end of 2001.

The GRI launch was used by a group of NGOs in the UK – the CORE Coalition – to urge Blair to instigate a Corporate Reform Bill to force companies into sustainability reporting. The group pointed out that figures show businesses have largely ignored Mr Blair’s call in 2000 for more voluntary green reporting, with just 23% of the top 350 companies producing substantive environmental reports by his deadline (see related story).

However, those involved in the GRI are optimistic about its potential impact. In his opening remarks at the launch, UN Deputy Secretary-General Louise Fréchette said: “By offering guidelines that enable companies to report on their work to improve environmental and social conditions, the GRI has a unique contribution to make in fostering corporate transparency and accountability far beyond financial matters.”

“Let me praise the Global Reporting Initiative for successfully bringing together actors from all sectors of society in a coalition for change,” said Fréchette. “Yours is a wonderful example of what a partnership can achieve in the work for greater sustainability, respect for human rights and labour standards.”

Harry Kraemer, CEO of Baxter International, spoke at the inauguration on behalf of the companies that have used the guidelines. “The GRI Guidelines have encouraged us to take a more comprehensive look at our performance according to the triple bottom line of economic, environmental, and social responsibility,” he said. “Now through our sustainability report we are able to bring these together to show the synergies and interrelationships in defining our success and responding to diverse stakeholder interests.”

GRI’s new board of directors made their first public appearance at the event, and the chosen site for the Secretariat – Amsterdam – was formally announced. There are plans to have regional offices in the US, South America, Asia and Africa.

The launch also introduced the GRI Charter Group, a set of leading organisations that endorse the initiative’s mission and are committing strategic, financial and operational support to ensure its long-term success. The companies include Baxter, Ford, Nike and Shell, campaign groups including Amnesty International and Greenpeace International and global accounting organisations.

“Let us not underestimate the significance of the task or the opportunity,” Robert Kinloch Massie, CERES Executive Director and GRI Board Member told the meeting. “The GRI represents only one piece of what we must do to find our way to a healthy and sustainable future, but it is a necessary piece. Without it, we will never bring all the forms of capital-natural, human, and financial-into healthy alignment.”

However, the CORE Coalition in the UK has warned that the Government may use the launch of this voluntary system to avoid putting in place binding legislation, similar to that already in existence in France and Holland. “Until government shows signs of leadership it is unlikely companies will bother telling us all the impact of their practices,” said Deborah Doane, Chair of the Coalition and Head of Corporate Accountability at the New Economics Foundation. “Corporations are not choosing to make themselves accountable to society, but they must be. We need legislation to ensure that companies take social and environmental issues seriously.”

The Coalition is urging a bill to increase Directors’ duties, reporting of social, environmental and economic impacts, and the rights of ordinary people. The group is still working on the details of its bill, which will be announced soon. Friends of the Earth senior parliamentary campaigner Martyn Williams told edie that two MPs are signed up to the campaign, so it will definitely be introduced into Parliament, though the timescale is as yet uncertain.

He added that the Coalition welcomed the inauguration of the GRI. “Something like GRI had to happen – you have to have standards that are set, but we don’t believe the voluntary approach will lead to companies doing anything. We wouldn’t want to be seen as critical of the GRI – the standards are good – but we also need mandatory standards.”

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