January 2009
Want to greenwash? It’s not so easy anymore.
Ten years ago, a company could write pretty much anything it wanted about its environmental and social performance. Whether glowing PR or honest disclosure, whether aimed at critics or kudos, there was little verification or standardization of such reports.
That has changed. Today’s field of sustainability reporting and assurance is coming of age, in response to the needs of communities, investors, business partners, and employees to evaluate the comprehensive impacts of a company’s operations. In a world where intangible assets (brand, reputation, risk management systems) often represent more value than tangible property, it’s little surprise that stakeholders want to dig deeper than financials to really know what’s going on.
“Sustainability reporting adds a discipline which is necessary to do anything well,” says Susan Todd, Principal of Solstice Sustainability Works and a Canadian leader in the field of sustainability reporting. “It puts some systems and rigour behind what otherwise could be just a loosey-goosey kind of commitment.” Adding discipline, she points out, is what ultimately creates value.
In 1992, only 27 companies internationally provided sustainability reports. For 2008, more than 3,000 are expected. (BC businesses such as Vancity, Teck, MEC, Hydro and Telus are helping lead the way.) But where to start? Sustainability reporting is still new, and standards are evolving. So here are a few things to ponder as you consider the brave new world of sustainability performance – and disclosure.
Know your business case
Internally, sustainability tracking and reporting can help engage employees, mitigate risks, and spark innovation. Externally, being honest about the good and the bad in your performance can build community trust that supports your ability to operate. (Only true, however, if you commit to improvement and follow through.) Recognizing the value sustainability reporting can provide will help you make the case for adequate budget and time needed to do the job well.
Choose the right tool(s) for your needs
There’s a dizzying array of reporting standards if you include all the industry-specific codes, and they have different applications. But you won’t go wrong if you start with the G3 Guidelines released by the Global Reporting Initiative (www.globalreporting.org). These show what issues are currently being scrutinized in the broad realm of economic, social, and environmental accountability. For sustainability management systems, keep an eye on the emerging ISO 26000 standard (to be published next year). If public credibility is crucial, explore the AA1000 standard for third-party assurance of your report. Many companies combine several standards to link best practices for in-house systems with those for external reporting.
Start small
GRI’s G3 standard allows a company to produce a “C-level” report with just ten performance indicators. That’s enough at first, and will probably allow you to cover the issues that are most relevant to you and your stakeholders. Once you have internal systems in place, move up to A-level if you like.
Learn from others
Of all the practices your company might undertake, this is one of the most externally collaborative. Everyone’s on a learning curve, and there’s comfort in sharing challenges and experiences along the way. Seek a practitioner’s peer learning circle, or formal training. Susan Todd’s “The Accountability Project” is an example of an emerging (now five year old) training program, now offering a certified designation through an international body.
If you’re not convinced that this is territory your company needs to visit, make sure you’ve really got your eye on the horizon. Alan Knight, head of standards for AccountAbility (the body responsible for the AA1000 standard), says the AA1000 been licensed by the UK government to assess the performance of its thousands of suppliers. Adoption of sustainability reporting in North America currently lags behind the rest of the world – but it’s hard to believe it won’t catch up soon.
Nina Winham (nina@newclimate.ca) is principal of New Climate Strategies, specializing in helping clients build value through a shift to sustainability. www.newclimate.ca
