GRI Announces Its Goal of Required ESG Reporting From All Large & Medium Companies by 2015
The third GRI Global Conference on Sustainability and Transparency opened in front of 1200 attendees from 77 countries at the RAI Elicium in Amsterdam. Executives from Siemens and AkzoNobel spoke, and HRH Prince Charles from the UK delivered a videotaped address as well. But the guiding theme of these three days is GRI's Chief Executive Ernst Ligteringen's proposal that environmental, social, and governance (ESG) reporting become more encompassing and set the standard for more organizations over the next decade.
Mathis Wackernagel of the Global Footprint Network and Pavan Sukhdev of The Economics of Ecosystems and Biodiversity (TEEB) set the stage with their discussion on increasing consumption and its long-term effects on the globe. With those dire statistics in mind, Mr. Ligteringen asked the audience, "What can we do?" and how a standardized reporting network can address a growing global population with decreasing resources.
Mr. Ligteringen announced that GRI has three ambitious proposals:
1) By 2015, all medium and large sized companies, totaling 80,000 firms, will issue ESG reports--and if they do not, offer an explanation to their stakeholders and investors. True, this is in the best interests of business, markets, and society. But logistics are part of the story as well: firms like Thomson Reuters and Bloomberg process ESG reports, and a standard format is necessary for any professionals who wish to mine this data on desktops around the globe.
2) Before 2020, ESG and financial reporting will be integrated for all companies that publicly disclose their material information. The oil spill in the Gulf of Mexico is the prime case study for this idea: right now there is no acceptable standard measuring such an environmental disaster. Right now we can see the underwater plume, estimate the approximate amount of oil lost, but there is still disagreement on how to quantify the social and environmental costs. GRI has developed these standards, and it behooves companies to disclose this information in one document that is both compliant for regulatory authorities and lucid to its stakeholders.
3) The time for a GRI G4 has come. For a dozen years the Global Reporting Initiative has helped companies with their ESG disclosures, but a more robust and streamlined framework has arrived. For the 1500 companies across 60 countries who have adopted the GRI Reporting Framework, the disclosure has become more seamless, but with the challenges our world faces, Mr. Ligteringen has suggested the GRI 3 has become a stepping stone.
The ideas are already buzzing around the Elicium. You'll see several of them on Twitter: enter the hash-tag term #griconference.