December is an important month for the Rio+20 process – a series of events and meetings are being held around the world in the run up to the main event. The global UN Conference for Sustainable Development will be held in Rio on 20 – 22 June 2012. The outcome of the events in the run up to the Conference will be vital to its success, determining whether it has an impact on creating a sustainable future for the world.
A meeting held in Geneva on 1 and 2 December was part of this preparatory process, and attracted hundreds of delegates from governments, international governmental organizations, business and civil society organizations. GRI presented a proposal for the Rio+20 Conference to adopt a policy framework on sustainability reporting in the formal roundtable on the Green Economy.
The proposal suggests a framework based on the report or explain approach to sustainability reporting: All organizations should report their sustainability performance or explain why not. This proposal was also discussed during a side event on 2 December, ‘Report or Explain - A policy proposal for sustainability reporting to be adopted as a common practice for the advancement of a Green Economy’.
At the side event, Ernst Ligteringen, Chief Executive of GRI was joined on the panel by Steven Stone, Chief, Economics and Trade Branch, UNEP, Oliver Greenfield, Convener, Green Economy Coalition, and Stephanie Maier, Corporate Responsibility Manager, Aviva Investors. Along with four respondents (Greenpeace, Rio+20 Preparatory Committee, Stakeholder Forum and UNGC), the group of 30 delegates debated the issue of transparency and sustainability disclosure, convening on the need of a decision on sustainability reporting at the Rio+20 Conference.
GRI advocates a report or explain approach to sustainability reporting policy: Companies should report their sustainability performance or explain why if they don’t. GRI submitted a policy proposal to the Rio+20 Conference Preparatory Process in November, calling on Member States to “develop a global policy framework requiring all listed and large private companies to consider sustainability issues and to integrate material sustainability information within the reporting cycle, in their Annual Report and Accounts – or explain why if they do not.”
This call is also made by the Aviva Investors-led Corporate Sustainability Reporting Coalition, which GRI is part of. Paul Abberley, Chief Executive of Aviva Investors London, commented on the coalition:
“We are proud to be working so closely alongside the Global Reporting Initiative and partnering with you on Rio+20. Progressive companies around the world have come to understand that long-term value is enhanced by embedding long-term sustainability into their business strategy and by fully disclosing their progress to investors. As a long-term investor we also recognise the positive impact that embedding long-term sustainability into a business strategy can have on shareholder value.
“We believe that all corporate boards should be required to consider the future sustainability of the firm they govern. This should not only enhance long-term profitability and returns to investors, but also improve the quality of stock markets, increase macro financial stability and make a material contribution to the lives of those impacted by corporate activity. This is why we are calling on the United Nations member states to commit to develop policy on Corporate Sustainability Reporting. Markets are driven by information. If the information they receive is short term and thin then these characteristics will define our markets.”
GRI is also part of the Green Economy Coalition
, which was set up specifically in preparation of Rio+20, to accelerate the transition to a Green Economy. The Coalition held a global meeting in London in November where leading economists, business representatives and political figures debated the Green Economy Coalition’s vision for a Green Economy, and its proposals for Rio+20. As part of its submission, the Green Economy Coalition calls for the same as the Corporate Sustainability Reporting Coalition – a policy framework based on three principles: report or explain, transparency and accountability.
This policy proposal is echoed by many other players, resulting in several calls to the Rio+20 Conference to make a decision about sustainability reporting – the Brazilian, Norwegian and Swiss Government, the European Union, UN Global Compact (UNGC), UN Environment Programme (UNEP), Aviva Investors and the Corporate Sustainability Reporting Coalition, many Civil Society Organizations including the Green Economy Coalition, Earth Charter, Ethos Institute and Stakeholder Forum are among those who put forward policy proposals on sustainability reporting in their contribution to the Preparatory Process.
The Brazilian government proposes an initiative
designed to expand the practice of sustainability reporting, “whereby state-run companies, development banks, sponsors of private pension funds, open capital companies and large corporations could publish complete, timely and objective reports on their activities,” including sustainability performance information. This, they suggest, “would make a significant contribution to getting these issues firmly included on the strategic agendas of major organizations and, thus, help to foster an inclusive green economy.”
The Norwegian government
points to the “Consolidation of existing business reporting systems, such as Global Reporting Initiative, Extractive Industries Transparency Initiative and country-by-country” as a key deliverable of the Rio+20 Conference, and the Swiss government
supports the idea of market transparency, proposing that information on environmental impacts of products should be available to market actors.
UNEP Calls on the Conference
to “further consider… requiring a ‘comply or explain’ approach to sustainability reporting and the application of standardized environmental, social and governance criteria in financial decision-making.”
puts forward that “Governments are asked to develop a global policy framework for business to disclose sustainability information following uniform parameters in their annual financial reports or other reports – or explain why they do not.”
The next step in the process toward Rio+20 will be a meeting taking place in New York on 15 and 16 December 2011, which GRI’s Pietro Bertazzi, Policy & Advocacy Manager, will attend. After that, in January the Rio+20 Secretariat will present a compilation document – the ‘zero-draft’ – based on inputs received from Member States and all stakeholders. This document will represent the basis of negotiations of the Conference outcome document.