Leading Investors Urge CEO's to Adopt Standardized Sustainability Reporting
Thirty-nine leading financial investors, managing combined assets in excess of $140 billion, today urged the CEO's of the 500 largest US companies to undertake standardized sustainability reporting measures for Year 2000. Sustainability reporting, as defined by the Global Reporting Initiative (GRI), links the three aspects of sustainable business practices-economic, social and environmental-in a standardized format reflective of financial reporting standards that have been common practice for decades.
The investors seek to expand a growing corporate trend of reporting on critical corporate social and environmental practices. Indeed, a recent study by the Institute for Environmental Management and consultants at KPMG found that more than 35% of the world's largest companies are already voluntarily releasing environmental reports. The Global Reporting Initiative, convened by the Coalition for Environmentally Responsible Economies and the United Nations Environmental Programme, has incorporated the active participation of hundreds of business, accountancy, environmental, human rights, and labor organizations from around the world in designing voluntary reporting practices that seek to become the international corporate standard.
Thirty leading international corporations, including AT&T, Bristol-Myers Squibb, British Airways, General Motors, Kirin Brewing, NEC, Nokia, and Shell, have used GRI's Sustainability Reporting Guidelines. Coinciding with the opening of the 2nd International Symposium of the Global Reporting Initiative, taking place November 13-15 at George Washington University in Washington, DC, the thirty-nine investors are asking CEO's to heed international calls for greater transparency by adopting the GRI guidelines. . The symposium has attracted more than 450 delegates from thirty-eight countries, including representatives from multinational companies, the investment community, interest groups, universities, and government.
The letter's signatories are leading socially responsible investors, including Calvert Group and Domini Social Investments, and investment advisors for institutional pension funds for the City of New York, and the United Church of Christ. They manage investments for foundations, pension funds, religious institutions, organizations, and individuals. Frank Coleman of the Christian Brothers Investment Services stated that, "The reason so many investors are joining together at this time is our recognition that corporate social and environmental practices have profound impact on companies' bottom-lines. Companies that fail to provide investors and consumers with more comprehensive, accurate and reliable information will fall behind in the increasingly global economy."
The letter urges adoption of GRI's Sustainability Reporting Guidelines. The guidelines, a common framework for sustainability reporting developed through a long-term, multi-stakeholder, international undertaking can be found at www.globalreporting.org. The letter cited three benefits offered by this reporting process:
- Aligning economic, environmental and social policies and performance at the management level;
- Tracking and benchmarking organizational performance of operations, products and services; and,
- Communicating challenges and accomplishments to internal and external stakeholders.
The letter concludes with a call for action in the current year. Joan Bavaria of Trillium Asset Management stated, "The need for companies to embrace social and environmental reporting is immediate. The only way to address the increasing concerns of civil society about globalization is for companies to step forward and provide an open and honest forum for discussion and improvement. Consumers are calling for action, investors demand it.