2003 j burg oecd

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org Improving Transparency and Improving Transparency and Communication of Corporate Communication of Corporate Sustainable Development Sustainable Development Practices Practices Paul HOHNEN, Director, Strategic Development Johannesburg, 19 November 2003 The Roles of the OECD MNE and GRI The Roles of the OECD MNE and GRI Sustainability Reporting Guidelines Sustainability Reporting Guidelines

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Page 1: 2003 j burg oecd

GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

Improving Transparency and Improving Transparency and Communication of Corporate Communication of Corporate

Sustainable Development Sustainable Development PracticesPractices

Paul HOHNEN, Director, Strategic DevelopmentJohannesburg, 19 November 2003

The Roles of the OECD MNE and GRI The Roles of the OECD MNE and GRI Sustainability Reporting GuidelinesSustainability Reporting Guidelines

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

outlineoutline

why improve transparency & communication?

what is GRI?

how the OECD MNE and GRI guidelines can help.

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

transparency … an old concepttransparency … an old concept

"It is wise to disclose what cannot be concealed."

Friedrich von Schiller (1759-1805), German Dramatist

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

… …with new relevancewith new relevance

“ Transparency is on the rise, not just for legal or purely ethical reasons but increasingly because it makes economic sense. Firms that exhibit openness and candour have discovered that can better compete and profit”.

Tapscott and Ticoll, Wall Street Journal, 14 Oct 2003

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

Increased demandsIncreased demands

governments

institutional investors

shareholders

civil society organisations (CSOs)

employees & unions

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

Johannesburg 2002Johannesburg 2002

“ We agree that there is a need for private sector corporations to enforce corporate accountability, which should take place within a transparent and stable regulatory environment” (WSSD Declaration)

Governments agree to “encourage industry to improve social and environmental performance through voluntary initiatives … including public reporting on environmental and social issues …”. (WSSD Plan of Implementation)

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

Johannesburg 2003Johannesburg 2003

‘Transparency is both an integral part of effective public governance and a core feature of international investment policy rules.’

‘Participants recognise the key role of governments to :

promote transparency

enhance … accountability’

Draft Co-Chairs’ Statement, OECD Global Forum on International Investment, 18 November 2003

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

marketmarket Investors demanding more non-financial information

“ Investors cannot make judgments about the way business is managing sustainability and corporate responsibility issues unless companies disclose relevant information”. – Henderson’s Global Investors, 2003

Governance codes

Australian Standard 8000, King Commission, etc.

Stock exchanges

U.K. expanding the definition of “materiality” for financial reporting

Johannesburg Stock Exchange

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

investorsinvestors

Tangible assets

Share value

intangible assets

financial reporting

Brand

Reputation

Human capital

Licence to operate

Share value

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

the naked corporationthe naked corporation

level of activism

Level o

f in

form

atio

n ‘mushroom’

vanguard trust

danger

Tapscott & Ticoll, 2003

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

benefits?benefits?

“The amount of information companies provide in their annual reports is correlated to market risk and valuations.”

“Companies that distinguish themselves by disclosing more information lower their market risk and therefore lower their cost of capital.”

“Non-financial disclosure in annual reports needs improvement.”

““Transparency and Disclosure” study by Standard & Poor’sTransparency and Disclosure” study by Standard & Poor’s

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

corporate governancecorporate governance

“…companies no longer act independently from the societies and the environment in which they operate”.

“… social, ethical and environmental issues … can no longer be regarded as secondary to more conventional business imperatives

South Africa : King 2 Report on Corporate Governance, 2002

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

outlineoutline

why improve transparency & communication?

what is GRI?

how the OECD MNE and GRI guidelines can help.

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

sustainability dilemmassustainability dilemmas

what does ‘sustainable development’ mean in practice?

what should I communicate on?

who am I communicating with?

how do I know it is useful information?

what system do I use (industry, sector, national, international?)

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

GRI’s mission

a generally accepted global framework for sustainability

reporting

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

missionmission

to make sustainability reporting as routine & valuable as financial reporting

used by all organisations

based on a multi-stakeholder process for producing generally-accepted guidelines for voluntary use

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

what does it offer?what does it offer?

products

Guidelines

Sector Supplements

Protocols

Resource documents

process

multi-stakeholder framework

learning forum

continuous improvement

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

what does it offer ?what does it offer ?

consistency

one framework, worldwide

links local, national, global

links to international goals: MDGs, A21, etc.

potential for common software, etc.

credibility

developed by stakeholders

market leader

widely used and supported by business, government and stakeholders

comparability

analysts

investors

employees

tax-payers

suppliers

CSOs

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

GRI reporter uptakeGRI reporter uptake

0

100

200

300

400

500

600

700

1999 2000 2001 2002 2003 2004 2005

330+

2005 Target 600+

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

Global : GRI reporters (by countrylobal : GRI reporters (by country))

Austria , Denmark, Italy

3

Finland 9

Netherlands, Sweden 13

Germany 16

France 18

Spain 18

Japan 60

United States of America 40

Australia 20

South Africa 11

Canada 8

Switzerland 5

Brazil, New Zealand 4

Costa Rica, Thailand 3 Chile, China,

India, Hungary, Norway 2

United Kingdom 41

Argentina, Malaysia,

Mauritius 1

Belgium, Ireland 2

Portugal 1

Now 18!

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

official recognitionofficial recognition

governments agree to “encourage industry to improve social and environmental performance through voluntary initiatives … taking into account such initiatives as … the Global Reporting Initiative Guidelines on sustainability reporting…”.

UN WSSD Plan of Implementation, Sept. 2002

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

business recognitionbusiness recognition

“… the GRI and AA1000 are your best bets, not only for reporting, but for building structured models for transparency-driven stakeholder engagement.”

Don Tapscott and David Ticoll, The Naked Corporation – How the Age of Transparency Will Revolutionize Business, (2003)

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

“ Investors cannot make judgments about the way business is managing sustainability and corporate responsibility issues unless companies disclose relevant information. …

Overall, we view the GRI as setting the global benchmark for disclosure and encourage companies to produce reports which are in accordance with the GRI guidelines.”

SRI Annual Report, Henderson Global Investors, May 2003

market recognitionmarket recognition

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

outlineoutline

why improve transparency & communication?

what is GRI?

how the OECD MNE and GRI guidelines can help.

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

“The European Parliament … highlights the importance, as stressed by the Commission, of building trust and consensus and support for internationally accepted principles such as the OECD Guidelines for Multinational Enterprises and the Global Reporting Initiative (GRI).” 

European Parliament Report on Corporate Social Responsibility (Final A5-0133/2003), April 2003

GRI & OECD Guidelines : The SynergiesGRI & OECD Guidelines : The Synergies

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

OECD OECD MNEs MNEs

GuidelinesGuidelines

GRI GRI GuidelinesGuidelines

•all organisations

•for corporations

•government approved

•government-endorsed

•guidance on what to do

• guidance on what and how

to report

code of conduct

reporting framework

respective rolesrespective roles

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

OECD OECD MNEs MNEs

GuidelinesGuidelines

GRI GRI GuidelinesGuidelines

• voluntary

• economic, social and environmental

• global

• relevant to companies of all

sizes

• multi-stakeholder

common characteristicscommon characteristics

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

OECD OECD MNEs MNEs

GuidelinesGuidelines

GRI GRI GuidelinesGuidelines

economic

environment

employmentconsumers

bribery

science & technology

competition

taxation

human rights

governance

performance indicators

stakeholder engagement

management systems

reporting principles

common issue focuscommon issue focus

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

GRI/OECD MNE ‘User Guide’GRI/OECD MNE ‘User Guide’

developed by GRI as a contribution to highlighting & advancing the shared goals of OECD MNE and GRI Guidelines

to help organisations assess and, if they wish, communicate their use of the OECD Guidelines

a draft comparative table for free public use

designed to be improved through use and feedback

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

CSR : the road mapCSR : the road map

UN Summits

(e.g. 2002 Johannesburg, Rio 1992)

ILO Core Conventions Treaties

on human rights,

climate, biodiversity,POPs, etc.

OECD Anti-Bribery

Convention

Sustainable development

UN Millennium Development Goals

unsustainable development

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

CSR ‘initiative proliferation’CSR ‘initiative proliferation’

around 300 separate CSR codes, principles, performance standards, management standards, etc.

covering one or more of environmental, human rights, or labour sectors

national, regional, international scope

by company, by sector

developed by individual governments, industry associations, academics, etc.

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

CSR “initiative proliferation”CSR “initiative proliferation”

Benefits

encourages creativity

no ‘one size’ solution

multi-level engagement

underlines interest

Burdens

‘white noise’

market confusion

reduces use

limits learning

increases cost

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

a global CSR management toolkita global CSR management toolkit

high value features :

global

voluntary

triple-bottom line

multi-stakeholder

flexible

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

Global CSR Management : Chaos Global CSR Management : Chaos and Confusion?and Confusion?

Performance reporting

Codes,

Standards

Corp. governance standards

Management standards

Performance standards

Assurance

Standards

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

… … or an Emerging Global CSR or an Emerging Global CSR Management Framework?Management Framework?

OECD,UN GCCodes

OECD

Corp. Gov’t

Principles

GRIReporting

Framework

ISO Manag’t

Standards

SAI,etc

Perform. standards

AccountAbility

AA 1000 AS

Uptake =

Take-off

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GRI is a collaborating centre of the United Nations Environment Programme www.globalreporting.org

conclusionsconclusions

transparency a key element of sustainability

existing initiatives provide guidance on what to do

in ways that promote learning, partnerships

GRI invites you to :

a) use its Guidelines and provide feedback

b) propose and fund development of new tools

c) consider how it can be used to advance your goals.