GRI: Sustainability reporting may be easier than you think

Following programs in Australia, China, India and Brazil, the Global Reporting Initiative hopes to convince more U.S. businesses to disclose sustainability information.
Written by Heather Clancy, Contributor

U.S. companies lag their counterparts from other nations in producing reports about their sustainability performance, anything from energy, water and waste management consumption practices to human rights policies. But the Global Reporting Initiative (GRI) is hoping to change that with the launch of its GRI Focal Point USA this week.

GRI is one of the foremost organizations helping to define standard reporting practices for corporate social, economic and environmental performance. As of today, the GRI is taking up office space in New York through a pro-bono arrangement with the Conference Board, the well-known business association.

Mike Wallace, director of GRI's U.S. Focal Point, estimates that roughly half of the companies reporting sustainability measures today use the GRI framework to do so. The United States has the lowest percentage of businesses reporting to GRI, he says.

Globally speaking only 30 percent of the Forbes Global 2000 actually divulge sustainability information, compared with about 80 percent of the Global Fortune 250. The 100 largest companies in the United States HAVE stepped up to the plate with environmental, social and governance reports. "We are perplexed about where the rest of them are," Wallace says. "This information is meant to be there for the public good."

This is all the weirder when you consider that Wallace figures roughly 80 percent of the information requested as part of the GRI framework is actually already measured in some way, shape or form within these organizations. "Whether or not you discuss it in this way now, there is enough data there to show the way," Wallace says.

The reasons that U.S. businesses need to get on the ball are myriad and range from the good-will effect that consumers might have when knowing you pay attention to this stuff to the more brutal reality that your most important supply chain partner or customer may now require this information in the course of doing business. There's also the little matter of the Securities and Exchange Commission now treating certain environmental factors as risks that need to be disclosed in financial reporting.

One of the companies quoted in the press release about the initiative, Baxter Healthcare, says it has been using the GRI framework since 1999 to provide relevant information for management and improvement. Says Art Gibson, Baxter's vice president of environment, health and safety: "This consistency provides relevant measures to help stakeholders evaluate our progress in a holistic manner, and helps us benchmark and measure our sustainability performance and refine our strategy as we continuously improve our programs."

Kind of sounds like financial reporting, doesn't it?

Which makes sense, considering that the GRI's presence in the United States over the next two years is being sponsored by the "Big Four" accounting and professional services firms: Deloitte, Ernst & Young LLP, KPMG and PwC U.S. Comments from all four of these companies in the press release underscore the notion that sustainability will become expected over time. Indeed, some companies are even integrating it more closely into their financial reporting.

Are you?

This post was originally published on Smartplanet.com

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