What does Sustainability Reporting mean for Emerging Economies?

While the world grapples with economic crisis, major emerging markets like India, Brazil, China and South Africa face the challenge of mainstreaming sustainability reporting and identifying the value it brings to an organization. To discuss these issues, the 3rd Global Reporting Initiative Conference on Sustainability and Transparency organized a session with business leaders from the emerging economy markets.

The twin challenges faced by the business sector in an emerging economy are globalization and balancing it with the national concerns relating to inclusive growth. It is often seen that in emerging markets, the CSR concept emanates from the challenges of local inclusive growth requirement. In such a scenario, the role of the governments is not only to nudge the business sector gently into sustainable behavior but also simultaneous capacity building giving a competitive edge to the companies in the global market. The government in such cases have an important role to play in mandating minimum standards of behavior in emerging markets.

Narina Mnatsakanian from Principles of Responsible Investment (PRI) identified the importance of an investor to look at environmental social governance practices and plan strategically for a long term before investing in projects. The investors have a key role to play by demanding sustainability reporting disclosures
from the companies they invest in. Stimulating demand of information from this end is bound to result in companies seeing added value in generating sustainability reports.

Seema Arora, Confederation of Indian Industries raised an important concern of what exactly does sustainability mean for different players and whether a universal language or definition is needed. In light of the often interchangeably used concepts of CSR and sustainability, it is important to have a basic framework as well.

Karin Ireton, member of the GRI Stakeholder Council and Standard Bank Group, expressed concern over the skewed understanding of the ranking A+ in the sustainability reporting scheme, but also stressed that this should not be a hindrance for companies to avoid reporting.

Ramnath Makhija, heading one of the largest Indian Engineering and Construction company, Larsen and Toubro, spoke about the need for the sensitization of the small and medium sized enterprises in the supply chain and capacity building to enable these enterprises to take on the sustainable path.

Making sustainability reporting mandatory in emerging markets might not work favorably and would remain only a check box exercise, instead an integration of the different reporting regulating authorities is required. It is important to understand that reporting is an ongoing process and instead of seeing it as a burden, companies should see it as an opportunity to distinguish themselves and get an edge in the competitive space.