The three-day Global Reporting Initiative’s Conference on Sustainability and Transparency ended in Amsterdam yesterday, with 1100 professionals from 77 countries buzzing over the future possibility of integrated financial and ESG (environmental, social, and governance–the European term for “CSR”) reporting.
One session that several hundred people attended was Thursday morning’s session on the information needs of a sustainable economy. GRI panelists and attendees were often united in their voice that greater transparency was needed in order to provide more robust and honest ESG reporting.
One country that will emerge as a leader in greater ESG reporting is Brazil. Sonia Favaretto of BM&F BOVESPA, the Sâo Paulo stock exchange that is the largest in Brazil and fourth largest in the Americas. Ms. Favaretto noted that Brazilian companies are understanding that there is a future for integrated reporting, and in fact, it would be easier to meet mandated disclosure requirements if companies could issue one report to one agency.
Hans Rademaker of the Robeco/SAM group emphasized that a high quality of data is needed. One issue with ESG reporting is that there is no standardization. GRI has been a leader in standardizing information, allowing companies like Bloomberg to aggregate this information for its clients. Company stakeholders, investors, and customers must understand what all this new information means, or future ESG reports will suffer the fate of most CSR (corporate social responsibility) reports: sitting on a shelf or buried in a laptop’s hard drive, only to be read by academics and the occasional analyst or activist.
So who will be behind the push to demand more integrated corporate reporting? The panelists’ views diverged, but a general agreement was that investors, regulators, and to an extent, rating agencies will be involved if integrated reporting will accelerate over the coming decade. The trick for regulators and companies, however, will be how well they can partner together. As Frank Mantero of General Electric pointed out, if the results end up being another bureaucratic exercise in checking boxes and meeting calendar deadlines, any benefits of improved ESG disclosure will be lost. The trick is to use ESG as a tool to engage employees and stakeholders, making them understand that sustainability has a direct connection to competitiveness in the marketplace. The Brazilians are getting it: they swept the awards given at the biennial conference’s Thursday evening ceremony!
Ed Note: Be sure to have a look at our upcoming GRI Certification course to be held this July in Berkeley. For information about the course, please click here. Feel free to pass it on to people you think may be interested!