Two recently published reports provide heartening evidence about the uptake and quality of sustainability reporting in Australia and New Zealand. They reveal that more companies are turning to the GRI Guidelines for guidance, a trend buoyed by investors who are requiring more accountability and transparency in reporting.
Corporate Reporting in Australia
, a research paper published by the Australian Council of Superannuation Investors (ACSI)
, documents that, while the number of ASX200 companies reporting has stayed the same over a six-year period, those that reference GRI’s Guidelines has doubled
– 44 reports were structured to GRI in 2014 compared to 21 in 2009. This is encouraging news for GRI, as it indicates that companies are realizing that sustainability reporting is worth more than a couple of paragraphs tucked away in an annual report.
Moreover, ASCI’s research shows an impressive shift in higher application levels (from C to A using the G3 or G3.1 Guidelines), another indication of the desire for more authoritative and structured sustainability reporting. Additional analysis of GRI reporting practices in the research shows that companies reporting in accordance with GRI tend to be larger companies, with 80% of these within the ASX100.
Growing investor interest
The push towards more meaningful reporting has been boosted by growth in the responsible investment sector in Australia and New Zealand. A report
published by RIAA (Responsible Investment Association Australia) says that, for the first time in a decade, there is “an increase in everyday public investors demanding to see their money invested responsibly.” More companies are responding to this intensified pressure, which is reflected in the growth of reporting in general.
The importance of identifying sustainability risk has already been validated by both the Australian government and ASX. In the third edition of its Corporate Governance Principles and Recommendations, the ASX Corporate Governance Council included a new recommendation under Principle 7: Recognize and manage risk: “A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages those risks.”
“This is all great news,” says Victoria Whitaker, head of GRI’s Focal Point in Australia. “The increase in reports using GRI Guidelines, plus the growing awareness by investors and market regulators of the need for more transparent reporting, can only point to a healthy future for sustainability reporting in our region.”