Once dismissed as an annoying public relations exercise and shunned because of perceived costs, sustainability reporting has become an important tenet of companies’ corporate social responsibility agendas. Now some companies are going an additional step and are taking on integrated reporting, the combination of the financial with environmental, social and environmental data. Clorox is an example of a leader in integrated reporting using the Global Reporting Initiative’s (GRI) framework, and governments including those in Brazil, Denmark, France and South Africa are seriously considering mandating integrated reporting.
But integrated reporting is also catching steam among other organizations. Academic institutions realize they have a huge impact within their communities; government agencies here in the U.S. have been subjected to more sustainability requirements under the Obama administration; and in an era of competitive donations and grants, stakeholders demand that non-profits are transparent. And while some may blanch at the thought of meeting more than one reporting standard or mandate, professionals with whom I spoke for this article say that undertaking such a report can boost a staff’s capacity, embed sustainability thinking within an organization and help achieve a level of transparency that stakeholders demand. Some of the trailblazing integrated reporting leaders may surprise you: they may not submit financial data to the Securities and Exchange Commission (SEC), but sustainability reporting and the GRI framework are meshing well with additional reporting standards to which these organizations comply.
“Don’t look at (integrated reporting) as an extra burden, but as an opportunity to embed sustainability within your organization.” – Richard G. Kidd IV, Deputy Assistant Secretary of the Army
The U.S. Army has focused on sustainability as far back as 2001 under the George W. Bush Administration. With energy costs on an overall upward trajectory, it is in the best interests of the Army to find smarter ways to use petroleum or even experiment with clean energy sources. And because of Executive Order (E.O.) 15314, the Army along with other government agencies must find ways to reduce toxins, minimize waste and procure more energy efficient electrical equipment.
But these shifts, outlined in the Army’s 2012 Sustainability Report, are not just feel-good measures. The Army has also found that the improved stewardship of land on their bases is necessary to reduce the degradation of its ranges and training facilities, which in the end, can affect the effectiveness of military exercises and therefore, the Army’s readiness. To that end, GRI ties in well with E.O. 15314 and additional reporting standards that the U.S. Army must follow. Of the 87 GRI indicators, the Army reports fully on 37 and partially on 25, an increase from its 2010 sustainability report.
So was the time and expense intertwining GRI’s framework within the Army’s other reporting requirements fruitful? According to Deputy Assistant Secretary Kidd, the entire experience compiling the data and writing the 157-page report was worthwhile. In a telephone interview, Kidd said the report was “really reflective of an organization embracing the tenets of sustainability and transparency.”
On the academic side, Ball State University recently completed its third sustainability report. Led by Professor Gwendolyn White, Ball State has cross-referenced GRI’s framework reporting with that of the Sustainability Tracking Assessment and Rating System, or STARS, a self-reporting framework academic institutions use to measure their sustainability performance. In a phone conversation I had with Dr. White, she explains how the university’s report becomes an experiential and immersive learning project for standout undergrad and graduate students.
Companies who flinch at the thought of writing a sustainability report, much less an integrated one, could take some lessons from Ball State. Dr. White selects top students from a variety of backgrounds, including her accounting department and others such as natural resource and environmental management. The interdisciplinary approach helps everyone form a more holistic view of the reporting process, and students also learn how the STARS and GRI frameworks complement each other. The entire process takes only a few months, as in an academic semester. A monthly environmental council meeting on campus becomes a stakeholder committee meeting where Dr. White’s team conducts a materiality assessment. Dr. White serves as the project manager: “You have to give up control and let them run with it” she said yesterday during our interview. The results speak for themselves, as the 65-page report touches upon a variety of issues to food consumed on campus to responsible procurement to environmental challenges and successes.
Leadership in integrated reporting is underway in additional sectors. The Cleveland Clinic’s most recent sustainability report weaves together GRI and the UN Global Compact reporting standards; the U.S. Postal Service, which is subject to Sarbanes-Oxley (SOX) reporting requirements as well as the U.S. government’s sustainability rules, is another example of what a self-funded organization can achieve on the integrated reporting front.
Watch for integrated reporting to catch on across all sectors; the organizations already adopting the practice will take satisfaction knowing that they set the standard for a movement that will become mainstream much sooner than later.
Leon Kaye, based in Fresno, California, is a sustainability consultant and the editor of GreenGoPost.com. He also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable Brands, Inhabitat and Earth911. You can follow Leon and ask him questions on Twitter or Instagram (greengopost). He will explore children’s health issues in India next month with the International Reporting Project.
[Image credit: U.S. Army]