Those who demonstrate specific leadership traits.
By Marjella Alma
The KPMG Survey of Corporate Responsibility Reporting 2013 boldly states that “the debate on ‘whether or not to report’ is over. Reporting on non-financial or ESG issues is no longer an indicator of leadership; it is the new baseline. Moving forward, how and what you report will determine credibility and ownership.”
How can we identify sustainability leadership in 2014?
More now than ever, investors will demand a clear understanding of who has been involved in the sustainability management and reporting process—this is happening already. Leaders will involve their Board of Directors, senior management, and key external stakeholders to embed sustainability, i.e., long-term profitability and viability, into strategy: They will make stakeholder engagement a priority. Corporate governance should not be seen as a separate discussion from sustainability management, and, leaders will demonstrate these linkages to their stakeholders.
Leaders will apply a focused approach to identifying key, material, relevant, priority or top-level issues—issues that go beyond the mere bottom line. These key issues will be integrated into a company’s core business strategy and the rationale for focusing on certain issues will be clearly explained in the report. Having no access to meaningful data is no reason for not addressing an impact—it is about the gravity of the sustainability impact. And managing these impacts will make the company viable and profitable in the long run. (A bit like the story of the turtle and the rabbit.)
Intermezzo: 1. Strategy -> 2. Management -> 3. Data
Leaders will team up with peers to tackle sustainability impacts that require a joint response. Leaders will use industry groups and collaborative networks to identify opportunities, facilitate understanding, and accelerate mutual goals. Their companies’ reports will clearly identify where (i.e. head office operations, upstream, downstream) the sustainability impacts occur and which stakeholders are affected by those impacts.
When it comes to the quality of a sustainability report, leaders will utilize channels—internal audit, external assurance, and stakeholder engagement—to improve their systems and their data over time.
As sustainability involves the engagement of multiple parties inside the company (government relations, legal, financial reporting, communications, etc.) and outside of the company (suppliers, investors, clients, consumers, etc.), reporting will materialize in various formats. Leaders will know the difference between ”reporting” and ”communications” and package their key issues in a way that most effectively speaks to different audiences. Tip: The GRI index is a nice and simple tool to keep it all together—and it’s now available for G4.
Apart from the launch of GRI’s G4 Guidelines, 2013 has seen many highlights for the Global Reporting Initiative and its global partners. The support of the U.S. network has been instrumental in realizing these achievements—and will be pivotal in advancing our shared pursuit of a sustainable global economy in 2014.
GRI looks forward to a new year of new pursuits. This year, there is strong potential that the sustainability movement will accelerate in many ways—and we are excited to be a part of it.
Marjella Alma is Interim Head Focal Point USA and Canada at the Global Reporting Initiative (GRI).