www.globalreporting.org Mark A. Cohen Mark A. Cohen Senior Associate Dean Senior Associate Dean Justin Potter Professor of American Competitive Business Justin Potter Professor of American Competitive Business Owen Graduate School of Management Owen Graduate School of Management Vanderbilt University Vanderbilt University Sustainability Reporting and Sustainability Reporting and the Global Reporting the Global Reporting Initiative Initiative
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Www.globalreporting.org Mark A. Cohen Senior Associate Dean Justin Potter Professor of American Competitive Business Owen Graduate School of Management.
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www.globalreporting.org
Mark A. CohenMark A. Cohen
Senior Associate DeanSenior Associate Dean
Justin Potter Professor of American Competitive BusinessJustin Potter Professor of American Competitive Business
Owen Graduate School of ManagementOwen Graduate School of Management
Vanderbilt UniversityVanderbilt University
Sustainability Reporting and the Sustainability Reporting and the Global Reporting InitiativeGlobal Reporting Initiative
www.globalreporting.orgwww.globalreporting.org 22
Outline of Talk…Outline of Talk…
History of Sustainability ReportingHistory of Sustainability Reporting Important drivers of reportingImportant drivers of reporting GRI’s MissionGRI’s Mission History & Organizational Structure of GRIHistory & Organizational Structure of GRI ““Products” available on GRI websiteProducts” available on GRI website Growing acceptance of GRIGrowing acceptance of GRI Value to Librarians…Value to Librarians… Questions?Questions?
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Origins of Sustainability Reporting…Origins of Sustainability Reporting…
• Toxic Release Inventory (TRI)Toxic Release Inventory (TRI) Effect of TRI on Stock Price of FirmsEffect of TRI on Stock Price of Firms
• Responsible Care/Chemical IndustryResponsible Care/Chemical Industry• Coalition for Environmentally Coalition for Environmentally
Responsible Economies (CERES)Responsible Economies (CERES)• Investor Responsibility Research Center Investor Responsibility Research Center
(IRRC)(IRRC) Emissions Efficiency Index (S&P 500)Emissions Efficiency Index (S&P 500) Collected Government Penalty Data, etc. Collected Government Penalty Data, etc.
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Growth in reporting…Growth in reporting…
1988 first US report (Polaroid)1988 first US report (Polaroid)
• By 1994 => over 100 in USBy 1994 => over 100 in US
• By 2004 => hundreds…around worldBy 2004 => hundreds…around world
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Growth in demand…Growth in demand…
Growth in demandGrowth in demand
• NGOsNGOs
• GovernmentGovernment
• Financial Community (esp. SRI)Financial Community (esp. SRI)
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Need for standardization…Need for standardization…
Financial Data Financial Data • GAAP Accounting standardsGAAP Accounting standards• Securities and Exchange CommissionSecurities and Exchange Commission
Sustainability DataSustainability Data• Difficult if not impossible for average Difficult if not impossible for average
investor to decipher & compare.investor to decipher & compare.• Difficult for companies & NGOs to Difficult for companies & NGOs to
benchmarkbenchmark
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Investor demand for CSR data…Investor demand for CSR data…
aacross 5 regions:cross 5 regions:• Africa Africa • Asia/PacificAsia/Pacific• West AsiaWest Asia• Europe/North AmericaEurope/North America• Latin America/CaribbeanLatin America/Caribbean
Total sales by marketTotal sales by market Goods, services purchased by Goods, services purchased by
countrycountry Total payroll & benefits by country Total payroll & benefits by country Taxes paid by countryTaxes paid by country Infrastructure spending (e.g. schools, Infrastructure spending (e.g. schools,
Examples of Environmental Examples of Environmental Performance indicatorsPerformance indicators
Material usageMaterial usage Waste by type and destinationWaste by type and destination Energy consumptionEnergy consumption Renewable energy sources usedRenewable energy sources used Water usageWater usage Biodiversity indicatorsBiodiversity indicators Greenhouse gas emissionsGreenhouse gas emissions Discharges to waterDischarges to water Significant spills of chemical, oilSignificant spills of chemical, oil Penalties paidPenalties paid
Examples of Social Examples of Social Performance indicatorsPerformance indicators
Workforce by country, type of employmentWorkforce by country, type of employment Employment creation & turnoverEmployment creation & turnover Percent union representationPercent union representation Layoff notification policiesLayoff notification policies Health & Safety recordHealth & Safety record Hours training & education for employeesHours training & education for employees EEO policiesEEO policies Child labor practicesChild labor practices Policies to evaluate suppliers/contractorsPolicies to evaluate suppliers/contractors Political contributionsPolitical contributions Customer safety & healthCustomer safety & health
“… “… the GRI and AA1000 are your best the GRI and AA1000 are your best bets, not only for reporting, but for bets, not only for reporting, but for building structured models for building structured models for transparency-driven stakeholder transparency-driven stakeholder engagement.” engagement.”
Don Tapscott and David Ticoll, The Naked Corporation – How the Don Tapscott and David Ticoll, The Naked Corporation – How the Age of Transparency Will Revolutionize Business, (2003)Age of Transparency Will Revolutionize Business, (2003)
official recognition by governmentofficial recognition by government
““The European Parliament … highlights The European Parliament … highlights the importance, as stressed by the the importance, as stressed by the Commission, of building trust and Commission, of building trust and consensus and support for internationally consensus and support for internationally accepted principles such as the OECD accepted principles such as the OECD Guidelines for Multinational Enterprises Guidelines for Multinational Enterprises and the Global Reporting Initiative (GRI).” and the Global Reporting Initiative (GRI).”
European Parliament Report on Corporate Social European Parliament Report on Corporate Social Responsibility (Final A5-0133/2003Responsibility (Final A5-0133/2003), April 2003), April 2003
“ “ Investors cannot make judgments about Investors cannot make judgments about the way business is managing the way business is managing sustainability and corporate responsibility sustainability and corporate responsibility issues unless companies disclose relevant issues unless companies disclose relevant information. … information. …
Overall, we view the GRI as setting the Overall, we view the GRI as setting the global benchmark for disclosure and global benchmark for disclosure and encourage companies to produce reports encourage companies to produce reports which are in accordance with the GRI which are in accordance with the GRI guidelines.”guidelines.”
SRI Annual Report, Henderson Global Investors, May 2003SRI Annual Report, Henderson Global Investors, May 2003
Reporters who use GRI GuidelinesReporters who use GRI Guidelines• 380380
Reporters who are “In Accordance Reporters who are “In Accordance With GRI Guidelines”With GRI Guidelines”• Approx 80Approx 80• Must report or “explain” all key Must report or “explain” all key
Tour operatorsTour operators Financial servicesFinancial services TelecommunicationsTelecommunications Automotive (draft)Automotive (draft) Others in various stagesOthers in various stages
Corporate Corporate • Benchmarking of competitionBenchmarking of competition• Design of corporate reportsDesign of corporate reports• Screening of suppliersScreening of suppliers
Business School Business School • Classes in marketing, corporate social Classes in marketing, corporate social
responsibility, regulation/lawresponsibility, regulation/law Other ?Other ?