Ed note: Curious about GRI and external assurance? Consider a training course in a city near you (or one you’d like to visit)!
By Lynnette McIntire, Sustainability Communications, UPS
I admit I may be delirious from all the number crunching, prose dissecting, and painful proofreading. But in these waning days before our next sustainability report is published, I confess that I enjoy the assurance process.
It’s not the general attitude. After all, a bunch of accountants come into your world for a rigorous review of your numbers. They require (gasp) documentation to prove your “facts.” They find those discrepancies between last year and this year. They challenge your subject matter experts on the methodology of their charts and graphs. And to be honest, they take a lot of glee in your mistakes.
So why am I a fan of this torture? Because it brings accountability to the internal process. The dozens of people who provide data to the report are now held responsible for the quality of the numbers, the supporting documentation, and the context of the data. Now I leave the nagging and challenging to those pesky accountants.
Every claim, goal, and forecast is scrutinized against the international reporting standards of the Global Reporting Initiative (GRI), the Green House Gas Protocol and the American Institute of Certified Public Accountants.
Sure, it’s expensive. But gone are the days when carpooling and lighting upgrade stories and smiling volunteer photos made the grade. Now, credible companies talk about such contentious topics as human rights, climate change, racial diversity, sexual orientation and product responsibility.
Your numbers have to be rock solid. Your stories have to be credible, authentic and honest. Transparency is the clarion call of investors and activists alike.
That’s why the 2011 UPS Sustainability Report states: “We believe that independent outside assurance is vital to the credibility and transparency of sustainability reporting and performance, and an important step in helping companies promote the cause of sustainability more widely.”
Today, sustainability reports are the basis of dozens of scores and rankings that can make or break a company’s reputation as a responsible corporate citizen. “Greenwashing,” the vacuous claims that are presented without valid data, can kill any goodwill generated by sincere efforts at community volunteerism and charitable giving.
Even so, just a few U.S. companies have submitted their reports to independent accountancy “assurance.” Even fewer have the combination of external assurance and review by the GRI. The most elite are those that have met both requirements and have had their reports earn an “A+”, which denotes the highest levels of transparency. Of the 2,798 reports registered with GRI in 2011, only 472 of these reports were an “A+” (17%). Of those 472 “A+” reports, only four were from U.S. companies. UPS, for the first time this year, has an “A+”, assured by Deloitte and Touche LLP.
Part of the predominance of European countries who are A+, of course, is that mandatory social reporting is more of the norm there. Also, there is an outcry for sustainability reporting to be embedded into financial reporting. Those trends have not yet reached our shores but are being discussed.
Regardless of the external pressures, there are internal benefits worth noting. Assurance can lead to awareness and internal change.
Accountability extends not just to the quality and integrity of the numbers. It also forces the company and its leaders to review the data against the past. The spotlight is on both successes and failures. In some cases, the process highlights areas and topics that the company has not yet put on the corporate agenda. Human rights, climate change and sexual orientation aren’t necessarily a priority for companies if there hasn’t been a problem. With the GRI Index that requires disclosure on those issues, they can’t be ignored.
So I give tribute to the nitpicky number crunchers that have made auditing their life’s work. They made my report and my company better.
Lynnette is editor of UPS’s Sustainability Report, which was published July 31 at www.ups.com/sustainability.
image: Trang Nguyen via Flickr cc (some rights reserved)
This post originally appeared on the Boston College Center for Corporate Citizenship blog