To develop this project, GRI invited a group of experts and information users
to form an Advisory Committee, which will support the project and provide technical advice. This month, GRI spoke to three of the contributors, SAM Sustainable Asset Management AG
, Thomson Reuters
and S&P Dow Jones Indices
, to ask why it’s important to have sector-level sustainability topics, and why they have chosen to work with GRI on the project.
“SAM believes that sustainability is a company’s capacity to prosper in a competitive and changing global business environment by anticipating and managing current and future economic, environmental and social opportunities and risks,” says Head of Research and Member of SAM’s Executive Committee, Dr. Daniel Wild. “Companies that address these factors through innovation, quality and productivity enhance their ability to generate long-term shareholder value.
“In order to make better informed investment decisions through integrating Environmental, Social and Governance factors into the investment process, SAM looks for the financially material, intangible ESG factors. Many of these factors differ from sector to sector, because they address specific sustainability challenges and opportunities related to the industry. Our continuous dialogue with almost 800 companies participating in our annual assessment confirms the importance of such tailored criteria.”
Wild also explains SAM’s motivation for working with GRI on this project. “It is our mission to drive sustainability thinking. We use financial markets as the most powerful transmission mechanism to promote sustainable business practices. Companies and investors alike are in favor of standardized and comparable ESG reporting – that is why we back GRI.”
The Advisory Committee oversees all aspects of the project. Its main role is to offer advice on difficult questions like how to define what is material for each sector, and the advantages and disadvantages of using an internationally-accepted sector categorization system.
Tamara Hardegger, Product Manager ESG - ASSET4 at Thomson Reuters, says: “Without becoming more specific about what matters at the minimum on a sector level, neither reporting nor its analysis can progress. Sustainability reporting seems to have reached a plateau. We have got the leading companies disclosing but is it relevant information? The question of materiality demands that GRI and anyone asking for reporting start prioritizing the list of issues, and this list cannot possibly be the same for all companies.
“GRI is by far the most widely adopted CSR/ESG reporting framework. As such it needs to be strengthened further. We hope that GRI will continue to play an important role in greater harmonization of sustainability reporting.”
Julia Kochetygova, Senior Director at S&P Dow Jones Indices, believes that sector-specific disclosure is vital for comparability and meeting stakeholders’ needs. “It is important to be contextual in discussing companies’ performance in the area of sustainability. Any company disclosures that are too general can lead stakeholders away from understanding the essence of a company’s degree of sustainability in its individual business context, and can make comparisons between companies impossible. As index providers, our decision making is based on such comparisons.
“We see GRI as a global leader in the process of driving the disclosure of important ESG information. One of the ways to do that is to set standards for such disclosure for companies, and for various stakeholders to use in search of the information they are interested in. Because we develop the ESG Index family at S&P Dow Jones Indices, we want to make sure that the indicators we are looking at and those recommended for disclosure by GRI are sufficiently similar.”
Once the call for topics closes on 14 December, GRI will analyze the proposals and work with the Advisory Committee to define the list of material topics per sector. The results will be compiled into a publication to be released in May 2013.
The deadline to provide suggested topics for sectors, and supporting documentation, is 14 December. For more information, visit the Material Topics Research pages
GRI looks forward to receiving your proposals.