Organisations have a wide range of stakeholders that have an interest in the activities of the organization. Stakeholders want information on an organisation’s economic, environment and social performance. Further, as society’s awareness of the importance of sustainability issues has increased, especially around climate change, so too has the importance of reporting. There are various names given to such reporting - the most commonly used are sustainability reporting, non-financial reporting, corporate social responsibility (CSR) reporting and triple bottom line reporting.
And today, organizations also have to think about integrated reporting - which integrates financial and sustainability information into one report. The aim is to provide a single report telling stakeholders how the organization impacts on the environment and community in which it operates, and how the environment and community impact the organisation's business. The King Code on Governance recommends an integrated report. Listed companies will be obliged to produce an integrated report in terms of the JSE's listing requirements for their financial years starting on or after 1 March 2010.
SAICA's sustainability website www.sustainabilitysa.org has dedicated pages on Integrated Reporting that house research projects, commentary and has links to companies already doing integrated reports.
There are a number of international voluntary reporting codes and frameworks that organizations can use when preparing a sustainability report. The most widely used is the Global Reporting Initiative (GRI). Most of the biggest global companies use the GRI Guidelines. The Guidelines can be downloaded free of charge from the GRI website at www.globalreporting.org. The GRI sees sustainability reporting as the practice of measuring, disclosing, and being accountable to internal and external stakeholders for organisational performance towards the goal of sustainable development.
A KPMG international survey [1] published in 2008 shows that 77% of surveyed reporting companies use the GRI Guidelines. The survey analyses trends in CR reporting of the world's largest corporations, including the top 250 companies of the Fortune 500 (the global top 250 (G-250)), as well as the top 100 companies in 16 countries. It noted that over 80% of the G250 produce sustainability reports. On average, 45% of the top 100 companies in each of the surveyed countries produce sustainability reports - Japan and the United Kingdom lead the table at 93% and 91% respectively. South Africa is some way behind at 45%, but it is one of the leaders in integrating the sustainability report into the annual report.
While the GRI Guidelines are fast becoming the standard for sustainability reporting there are many other voluntary guides and in some countries, there are legal requirements for the disclosure of sustainability information. Further, some industries, such as forestry and chemical, have developed industry codes. On carbon emissions, the GHG Protocol is regarded as the standard for measuring and reporting. In South Africa, the guidelines include the King Code on Governance and legislation includes the Broad-based Black Economic Empowerment legislation. See www.sustainabilitysa.org for more information.
As with any published information the credibility of the information is enhanced if it has some form of supporting assurance. The 2008 KPMG Survey shows 70% of the G250 used accountancy firms to provide assurance.
Given the growing importance of sustainability reporting, SAICA has developed a sustainability reporting course, which has been certified by the GRI. The two-day course outlines the principles of sustainability reporting and teaches participants how to go about planning for and implementing the GRI processes to develop a sustainability report. See Sustainability Services on this site.
[1] International Survey of Corporate Social Responsibility - 2008.
For more on sustainability reporting go to www.sustainabilitysa.org