The role of governments in mainstreaming sustainability reporting
14 December 2011

​As GRI works towards bringing sustainability reporting to discussions at Rio+20, the role of governments is becoming increasingly important. Several new initiatives highlight the significance of sustainability reporting for governments worldwide; governments are recognizing that widespread sustainability reporting practices can help markets function more efficiently, by providing important non-financial information, and also help drive progress by all organizations toward government-agreed sustainable development goals.
The government of Finland adopted a resolution on 3 November asking non-listed state-owned companies and state majority-owned companies to report their sustainability performance. The resolution builds on the continuation of the State’s active, market-based ownership policy, and follows many other governments, including Sweden, Spain, China and India, that ask their state-owned companies to report on non-financial information.

Last month, Denmark released its second impact assessment study of the legal requirements in the Danish Financial Statements Act for reporting on corporate social responsibility. The overall outcome is very positive: Most of the companies comply with reporting requirements. Due to the legal requirement, the quantity of sustainability reports has increased significantly. There is room for improvement with regards to quality of reports. However, the study shows that Danish businesses are now reporting on more topics, and more companies report on their policies, how these policies are translated into actions and the results achieved.

In October 2011, the European Commission (EC) released a new European strategy on corporate social responsibility, which marked further increases in government activity and an important point in the history of EU corporate social responsibility (CSR) policy. One of the eight fields of its agenda for action includes focuses on how to improve company disclosure of social and environmental information. The strategy also encourages public authorities to take steps to improve disclosure of their own social and environmental performance.

Other initiatives complementing government actions also contribute to the mainstreaming of sustainability reporting. For example, the German Council on Sustainable Development adopted the German Sustainability Code in October 2011, which features 20 indicators of sustainability performance, aligned with the GRI Guidelines.

Last month, the seventh GRI Governmental Advisory Group meeting took place in Johannesburg, South Africa. It was hosted by the South African government’s Department of Environmental Affairs and was attended by key representatives from OECD and non-OECD countries. Topics of discussion included how best to mainstream sustainability reporting, the road to Rio+20 and the fourth generation of GRI’s Reporting Guidelines, G4.

The role of governments in the mainstreaming of sustainability reporting is multifaceted. As both regulators and role models, governments are expected to lead by example and address the pressing need for companies to report on their sustainability performance.