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Sustainability Topics for Sectors: What do stakeholders want to know?

TRADING COMPANIES AND DISTRIBUTORS, AND COMMERCIAL SERVICES AND SUPPLIES

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This table shows a list of topics identified as relevant by different stakeholder groups. They can be considered as stakeholders’ suggestions or requests for topics to be monitored or disclosed by organizations.

Additional information about the project can be found at https://www.globalreporting.org/reporting/sector-guidance/Topics-Research/Pages/default.aspx

14 – Trading Companies and Distributors, and Commercial Services and Supplies

11 Topics

Trading companies and other distributors of industrial equipment and products. Companies providing commercial printing services. Includes

printers primarily serving the media industry. Companies providing environmental and facilities maintenance services. Includes waste

management, facilities management and pollution control services. Excludes large-scale water treatment systems classified under Water

Utilities. Providers of office services and office supplies and equipment not classified elsewhere. Companies primarily providing labor oriented

support services to businesses and governments. Includes commercial cleaning services, dining & catering services, equipment repair services,

industrial maintenance services, industrial auctioneers, storage & warehousing, transaction services, uniform rental services, and other business

support services. Companies providing security and protection services to business and governments. Includes companies providing services such

as correctional facilities, security & alarm services, armored transportation & guarding. Excludes companies providing security software and

home security services. Also excludes companies manufacturing security system equipment classified under Electronic Equipment & Instruments.

Sustainability Category

Topic Topic Specification (if available)

Explanation Reference(s)1 Constituency

Economic Financial assistance received from governments

Development and deployment of climate-friendly goods and technologies

Government funding to enhance the deployment and utilization of new climate friendly technologies and renewable energy is another type of economic incentive commonly used in climate change mitigation policies. Usually, incentive policies related to climate change may focus on three areas: (i) increased use of renewable and/or cleaner energy sources; (ii) development and

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deployment of energy efficient and/or low carbon content goods and technologies; and (iii) development and deployment of carbon sequestration technologies. International trading organizations have an effect on the environment in several countries. However access to financial mechanisms such as grants, financial aid or investments from the government can significantly increase the chances of an organization adopting measures to prevent climate change. Governmental funding policies to increase the development and deployment of renewable energy sources and of low-carbon goods and technologies may have an impact on the price and production of such goods. From an international trade perspective, such policies lower the costs for producers, leading to lower product prices. In turn, lower prices may reduce exporting countries’ access to the market of the subsidizing country or may increase the exports of the subsidizing country. http://www.wto.org/english/res_e/booksp_e/trade_climate_change_e.pdf

Financial implications due to climate change

Internalization of environmental costs of GHG emissions

Examples of price and market mechanisms to internalize environmental costs of GHG emissions are: Taxes on greenhouse gas emissions, and in particular “carbon taxes” or with Emission trading schemes. Through such efforts, a price signal on emissions is set and individuals and businesses are encouraged to switch away from high-carbon goods and services and to invest in low-carbon alternatives.

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These two mechanisms have two key environmental effects: (i) a “direct effect”, i.e. a reduction of greenhouse gas emissions, a stimulation of energy-efficient measures, the switching to low-carbon fuels and products, and changes in the economy’s production and consumption structures; and (ii) an “indirect effect”, through the “recycling” of the fiscal or auctioning revenues to fund, for instance, investment in more climate-friendly technologies, or to enhance emission-reducing changes in investment and consumption patterns.

Environmental Materials sourcing

Wood-based products from responsibly managed forests

Sourcing of wood based products (paper, furniture, etc) from responsibly managed forests. The following sections of the GRI reporting guidelines may be used by a reporter to mention FSC related activities, those are: - Profile - Commitments to External Initiatives: 4.12 externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses. - Environmental Impact: EN 26: Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. - Product: PR3: Type of product and service information required by procedures and percentage of significant products and services subject to such information requirements. The above indicators are mostly not quantitative and a

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reporter may find difficult to integrate FSC related information. Ideally there would be a quantitative indicator related to certification scheme or initiative regarding the supply and the final product within the GRI guideline. In order to ease the reporting of FSC related activities, we propose to include two indicators related to supply and final product content. The wording could follow the Food Processing Supplement and worded as follows: “Percentage of purchased material by volume and weight which is verified as being in accordance with credible, internationally recognized responsible production standards, broken down by standard”. This topic reflects significant impacts, risks and opportunities for an organization itself and its stakeholders as well as requires active management or engagement by the organization. By buying FSC certified products, companies provide incentives for responsible forestry and can enjoy their purchases knowing it has not contributed to the destruction of the world’s forest or even come from companies involved in human rights abuses. Almost everything made from wood and other forest products are available with the FSC label. Finding FSC products becomes easier everyday. Literally every day, more FSC products become available. This topic is relevant for all 52 business/industry activity



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groups. These simple steps can be followed by companies to find and buy FSC products: 1. Check the FSC marketplace at marketplace.fsc.org (in January 2013, the marketplace is still a beta version) Please note this database will currently only search for manufacturers and distributors, not retailers. There are only a few exceptions where retailers are also certified. To find products carried by your local retailer, please contact them directly. We are working on including other search options to this database in the future. 2. Ask your retailer Chances are, they will carry FSC certified products. If not, let them know you would be interested in certified products. Not all certification systems are equal and only FSC guarantees that the product has been made from environmentally and responsibly managed forests. By asking for FSC certified products, you show that there is a demand. This is an important and simple way how you can help FSC to make a difference.

Packaging materials

Materials and recycling

Type and source of packaging materials use; quantity of packaging materials use for trading and distributing purposes; recycling processes in place and use of recycled materials. The Sustainable Food Trade Association (SFTA) sustainability metrics highlights packaging materials as a core metric to measure the sustainability performance of an organization. They have implemented a joint

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'Responsible Packaging' project to encourage the use of sustainable packaging materials and celebrate those companies who do so.

Plastics use and management

Plastic, a valuable material, can generate significant positive, or negative, impacts on economy, environment and society. Plastic should be treated as a resource and managed judiciously. A disclosure on management approach for plastics, including governance, strategy, risks, opportunities, considering: opportunities for product redesign, increasing recycled content, implementing reclaim and/or reuse which could attract economies, brand loyalty, investment, employee goodwill, and; risks to the business, stakeholder health, environment and society (including reputational/social license to operate, regulatory, investor, insurer, and liability risks) for plastics that are directly harmful to stakeholders, or indirectly through plastics being wasted/littered. Performance indicators regarding the types and volumes of plastics being used, collected and/or distributed downstream; the portion that is made of post-consumer-recycled, bio-based, biodegradable, compostable, and/or oxobiodegradable material; the ratio of expected life-span of plastic products in contrast to the duration of their intended use; these volumes broken down by end of life disposition. Most of this disclosure can be captured through the existing GRI framework (e.g. GRI G3 EC9, EN1, EN2, EN22), but commentary is needed to ensure disclosers

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appreciate the materiality of plastic; these aspects of the G3.1 EO sector supplement (EO1, E22, E27, SO9, EO8, EO9, EO11) should be reused for Hotels, Restaurants, Leisure, Tourism and also for facilities/office/dining/catering management. Refer to the Plastic Disclosure Project (www.plasticdisclosure.org) for more details on the suggested questions. PDP will align its questions to GRI G4 to assist disclosers. Plastic can have significant positive, or negative, impacts on the economy, environment and society: Economics: There are significant cost savings available to organisations that treat plastic as a resource (e.g. through redesign, use of recycled content, reclaiming, etc.) and risks of increased direct costs (regulation, liability, cost of capital, insurance) to organisations that do not lead in this area as well as indirect economic costs to impacted industries (e.g. food production, tourism) Environment: Plastics that are wasted or littered become extremely harmful to the environment, which will have a material effect on biodiversity and the global food chain, both nearby and far outside the local area of operations Society: Some plastics are harmful to stakeholders during manufacture, use and/or disposal (e.g. due to phthalates, BPA), impact the wellbeing of society (e.g. effect of litter on community spirit and their interest in sustainability). While a valuable invention, which benefits society in



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many ways, the negative impacts associated with society's growing use of plastic are not fully recognised. Roughly 85% of plastic used in products and packaging is not recycled, and most plastic produced in the last 60 years still remains in the environment today. Approximately 70% of discarded plastic is from single-use food and beverage containers. Discarded plastics persist in the environment for dozens or hundreds of years, accumulating across the globe, often out of sight of the producers and users. The direct physical impacts of plastic are significant to the organisation in increased costs or missed opportunities, and related economies (e.g. over $1.2bn in annual damages to ocean-related industries in Asia-Pacific), the environment through harming habitats and species, and to stakeholders health when exposed to the chemical ingredients; and are magnified if fragmentation of the plastic occurs, making it available for ingestion to additional species, who adsorb the chemical ingredients and/or the toxins carried on the plastic. These negative impacts could be avoided and turned into positive impacts, if plastic was treated as a resource to be managed judiciously (e.g. the US economy lost $8.3bn worth of plastic packaging in 2010) - "It is not good business practice to throw away valuable resources".

Social Product packaging and labeling

Composition and product origin

Clear identification of products in terms of their composition (what made of) and where produced. Especially with regard to fair trade principles, the labelling of products is essential to enhance transparency

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and raise customer awareness. This is a practice that is common in the global 'north' but less common in the global 'south.' Fair trade organizations work to build this practice in the global 'south' to provide consumers with greater choice in their product selection and pressure companies to produce in line with fair trade principles

Level of compliance with packaging and labelling standards, if relevant. Relates to clear identification of quantity statements, use of machine readable bar codes and clear, legible product descriptions. Standards in this area mean that products can be identified, stored and transported successfully along the supply chain to the end user in good condition. BOSS provides a Packaging and Labelling Standard to help its members avoid problems associated with inadequate packaging and labelling by providing a comprehensive set of standard, simple guidelines for implementation.

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Anti-dumping investigations

Number of anti-dumping investigations in which organization has participated; participation as one filing the complaint or undergoing investigation due to outside complaint; type of complaint submitted (related to type of product imported, quality of product imported). In the EU, retailers and importers can file complaints as a means to persuade the Commission to initiate an anti-dumping investigation against imports of products from third countries that are competing against their own production, are causing injury to the Community and when it is in the interests of the Community to impose

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such measures. Retailers and importers who have registered as "interested parties" are permitted access to non-confidential versions of those complaints. However, the quality of the information in those complaints is often less than desirable and experts argue that access to such information could be greatly improved. Most criticisms related to the EU Anti-Dumping Regulation itself and the lack of precision that exists within. Challenges arise in relation to the following: the quality of non-confidential complaints (and access to those complaints); access to information concerning the progress of investigations; lack of announcements by the Commission concerning an investigation's progress; unnecessary delay by the Commission when terminating measures; lack of adequate notice of expiration of anti-dumping measures. Ultimately, the process leads to delay in production and trade capacities and acts to protect European industries that have been slow to adapt to the global marketplace.

Workplace bullying

Incidents of and processes to deal with cases of workplace bullying, including harassment, occupational violence, fatigue and work overload. Workplace bullying can have a profound effect on all aspects of a person's health, work and family life. Bullying behaviours can range from subtle behaviors that seek to exclude, isolate or marginalize, to extreme acts of physical violence resulting in death or serious injury. While workplace bullying can involve a range of different behaviors, the elements of most definitions include

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repetitious, unreasonable, or unfair and inappropriate behavior that attempts to undermine a worker or group of workers that creates a risk to health and safety.

Other Business strategy

Environmental and social impact assessments in investment decisions

Trading companies that acquire stakes in or operate large-scale projects such as exploration activities should control risks by integrating environmental and social impact assessments into their investment decisions and provide transparent reporting about such engagements

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Chemicals use in products

Adherence to chemical use regulations and/or agreements

Level of compliance with relevant regulations on the use of chemicals within products to ensure consumer protection. Examples of types of prohibited chemicals in the EU are biocides, phosphates in household detergents and cadmium in jewelry. Consumer protection is constantly gaining importance in Europe. Modifications of legislation with direct effect on the trade industry have recently been introduced. The European Commission implemented REACH (Registration, Evaluation, Authorization and Restriction of Chemical substances) was initiated in 2007 to ensure that such legislation was implemented and followed.

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Supplier screening

Environmental and human rights standards

Further, support services companies may risk transferring reputational risks onto their customers if their suppliers are found to be involved in any environmental or human rights abuses, and should therefore proactively engage their suppliers on such topics.

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1 All references can be found at https://www.globalreporting.org/reporting/sector-guidance/Topics-Research/Pages/default.aspx




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References

All references can be found at https://www.globalreporting.org/reporting/sector-guidance/Topics-Research/Pages/default.aspx

26 Australian Council of Trade Unions (ACTU), 2012. Submission To the House Standing Committee on Education & Employment, Inquiry into Workplace Bullying, Melbourne: Australian Council of Trade Unions (ACTU).

52 Boonman, M., Huisman, W., Sarrucco-Fedorovtsjev, E. & Sarrucco, T., 2010. A Success story for Producers and Consumers, Culemborg: The dutch association of Worldshops (daWs).

53 BOSS Federation, 'Packaging and Labelling Standard', 2012.

57 Brewer, T., 2012. International Technology Diffusion in a Sustainable Energy Trade Agreement (SETA), Geneva: International Centre for Trade and Sustainable Development.

182 Foreign Trade Association (FTA), 2010. Transparency and Predictability: Shortcomings in the EU anti-dumping system, Brussels: Foreign Trade Association (FTA).

183 Foreign Trade Association (FTA), 2012. 2011-2012 Annual Report, Brussels: Foreign Trade Association (FTA).

184 Foreign Trade Association, 2009. Position Paper - The EU Commissions Reform of TDI Two Years on: a reassessment, Brussels: Foreign Trade Association.

185 Forest Ethics, n.d. Model Forest Resources Policy. [Online] Available at: http://www.forestethics.org/model-forest-resources-policy [Accessed 27 March 2013].

353 Kershaw, P., Katsuhiko, S., Lee, S., Samseth, J., Woodring, D., & Smith, J., 2011. Plastic Debris in the Ocean. In United Nations Environment Programme (UNEP), UNEP Year Book 2011 (pp. 20-33). Nairobi: United Nations Early Warning and Assessment.

367 MacKerron, C., 2011. Unfinished Business: The Case for Extended Producer Responsibility for Post-Consumer Packaging, Oakland: As You Sow.

460 Robeco SAM, 2012. The Sustainability Yearbook 2012, Zurich: Robeco SAM.




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488 Sustainable Food Trade Association, 2011. Sustainable Food Trade Association Metrics, Portland: Sustainable Food Trade Association.

491 Tamiotti, L., Teh, R., Kulaçoğlu, V., Olhoff, A., Simmons, B., Abaza, H., 2009. Trade and Climate Change: A report by the United Nations Environment Programme and the World Trade Organization, Geneva: WTO Publications.

569 World Wide Fund for Nature (WWF), The WWF Guide to Buying Paper, 2010.

615 Wright, T., 2011. Responsible Packaging Project Webinar, s.l.: Responsible Packaging Guidelines.

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