GRI recently released a report on why sustainability reporting is important for listed companies. At a recent event hosted by the Shangai Stock Exchange, they observed that all State Owned Enterprises in China must produce reports. As a result, China has seen a huge increasing in reporting in the private sector as well. The Shangai Stock Exchange recommends sustainability reporting to all listed companies and China's economic plans continue to focus on environmental sustainability and disclosure.
There are over 100 stock exchanges in the world and GRI reckons that when major stock exchanges start paying attention to sustainability standards, more regulators will follow. It has always been known that there are many reasons for a company to start reporting, but now in order to get listed many exchanges demand a sustainability report. Both NYSE and NASDAQ in the US are acknowledging sustainability information.
Vice President and Head of CSR at NYSE, Michelle Greene commented on this trend saying: "Hopefully we're heading toward a tipping point, where companies that don't report have some explaining to do, rather than those that do being the exception."
In several other countries like Brazil, sustainability forms an important part of their national stock exchanges. They have developed a framework based on GRI for their sustainability reporting. German exchange Deutsche Börse also considers sustainability to be an important factor for listed companies. They have also released guidelines for investors to factor in sustainability performances. Singapore is taking the lead in Asia and the Singapore Stock Exchange encourages listed companies to start reporting their sustainability performance. In 2010, they issued their own guidelines that companies may use as a framework. The stock exchange of Thailand is now following suit with its own guidelines for listed companies.
Other major stock exchanges are looking into integrated reporting as an option. Integrated reporting incorporates sustainability performance into financial data. The Johannesburg Stock Exchange in South Africa has a 'comply or explain' policy for integrated reporting.
Stock exchanges can work with GRI by becoming Organizational Stakeholders. NYSE is one of the most notable stock exchange to do this. They can also get involved in development of new GRI guidelines as well as encourage listed companies to report through their own guidelines.
The insistence of sustainability standards by stock exchanges is a move that will increase the profile of CSR. It also indicates that non-financial risk reporting is fast gaining traction as a method of measuring financial success. This could spell a great future not only for sustainability but also for social entrepreneurs and investors.
Akhila is the Founding Director of GreenDen Consultancy which is dedicated to offering business analysis, reporting and marketing solutions powered by sustainability and social responsibility. Based in the US, Europe, and India, the GreenDen's consultants share the best practices and innovation from around the globe to achieve real results. She has previously written about CSR and ethical consumption for Justmeans and hopes to put a fresh spin on things for this column. As an IEMA certified CSR practitioner, she hopes to highlight a new way of doing business. She believes that consumers have the immense power to change 'business as usual' through their choices. She is a Graduate in Molecular Biology from the University of Glasgow, UK and in Environmental Management and Law. In her free-time she is a voracious reader and enjoys photography, yoga, travelling and the great outdoors. She can be contacted via Twitter @aksvi and also http://www.thegreenden.net