Sustainability disclosure is a best practice employed by companies worldwide. The reasons to report environmental, social, and economic impacts are significant, as are the benefits: enhanced reputation, meeting employee expectations, improved access to capital, and increased efficiency and waste reduction.
At a workshop sponsored by the Institute of the Environment and Sustainability’s Corporate Partners Program, a panel of experts examined existing and emerging standards of responsible reporting. Event speakers included Magali Delmas, a professor of management with the IoES and UCLA Anderson School, Brad Sparks, director of KPMG International Global Citizenship, Mike Wallace, director of Global Reporting Initiative’s (GRI) Focal Point USA and Canada, Katie Schmitz Eulitt, director of stakeholder engagement and advisory council chair, Sustainability Accounting Standards Board (SASB), and John Kim, manager of insights and integration at Disney Citizenship.
Professor Delmas explained sustainability reporting as a method to internalize and improve an organization’s commitment to sustainable development in a way that can be demonstrated to both internal and external partners. She described how communicating this information helps investors, customers, employees, and the community make choices based on environmental and social criteria. View her presentation here.
Brad Sparks noted that 95% of the largest companies in the world issue corporate responsibility reports. A practice that is still maturing, Sparks revealed data quality continues to be a critical issue among companies publishing sustainability reports, with 33% of the largest 250 global companies releasing a restatement. He stated that 2013 was a milestone year with advanced reporting requirements, an integrated framework, expanded guidelines, and natural capital accounting. See his presentation here.
Panelist Mike Wallace of GRI (the most widely used sustainability reporting framework in the world) illustrated how GRI provides guidance and support to organizations in managing their economic, environmental, social, and governance performance and impacts responsibly and report transparently. He discussed principles and reporting elements, how data is acquired and an ecological footprint calculated. GRI content indexes with profile disclosures, disclosures on management approach, and performance indicators were shared. The presentation showed that investor demand for this information is up and how sustainability reporting is becoming mandatory in many countries. Wallace also mentioned the challenges of acquiring reliable data and survey fatigue.
In the presentation Wallace elaborated on the development process: multi-year activities involving working groups that attend meetings and webinars, workshops, and public consultation periods that generate written feedback (which is analyzed manually and digitally and published), and additional sessions with stakeholders. He also outlined sustainability reporting objectives, focuses, and areas that have been profoundly revised such as supply chain and greenhouse gas emissions. Review his full presentation here.
Katie Schmitz Eulitt observed that the existing legal framework governing public companies requires disclosure of “material” information that a reasonable person would want to know when deciding whether to invest in a company. Increasingly investors want to know about a company’s sustainability performance when deciding to invest. The SASB is developing industry-specific standards that will be cost-effective, auditable, and relevant. The nature of future disclosures will be more focused and comparable rather than greater in quantity.
John Kim talked about how the Walt Disney Company prioritizes, monitors, and responds to sustainability rankings and ratings. Disney Citizenship’s reports include a summary table, data, GRI index, and infographics. Kim said sustainability reports should use performance-data driven, reflect strategy and disclosure priorities and focus resources, improve internal and external transparency, and communicate citizenship priorities to key stakeholders. Kim emphasized integrating and documenting what is considered important and to make the process easy and expected for internal partners.
The workshop concluded with a Q & A with the point reiterated that understanding and measuring sustainable performance is an important, evolving paradigm for businesses around the world.
To learn more about the Institute’s Corporate Partners Program please visit, http://www.environment.ucla.edu/support/corporate-partners.asp.
To view pictures from the event check click here.