The Australian Focal Point of the Global Reporting Initiative is mirroring work at the international level to have language put into the Rio+20 outcomes documents calling for listed and large private companies around the world to put sustainability information into their reporting documentation.
GRI has joined the Corporate Sustainability Reporting Coalition and the Green Economy Coalition, which are working to include a paragraph on sustainability disclosures into the outcomes document The Future We Want that will be the result of the United Nations Conference on Sustainable Development – otherwise known as Rio+20. The Rio+20 conference will take place from 20-22 June.
The proposed paragraph reads “We call for a global policy framework requiring all listed and large private companies to consider sustainability issues and to integrate sustainability information within the reporting cycle.”
The Australian GRI Focal Point is working with local investors and groups to raise this issue in Australia as well, said Victoria Whitaker, network manager, Focal Point Australia, Global Reporting Initiative.
“Globally, we have identified three different ways of implementing this – one is to regulate it, such as to mandate it as part of the Corporations Act,” Whitaker said. “Another is through a listing requirement, which the Johannesburg Stock Exchange has done. The other way is through a soft regulation – an ‘if not why not’ approach. It allows companies to choose not to report and explain why not, and allows companies to choose the framework to report against, which gives a lot of flexibility to companies.”
Whitaker noted that there are about 88,000 multinational companies globally, and that only around 5,000 are disclosing sustainability information.
“We keep on talking about mainstreaming sustainability reporting, but we’re not there yet,” she said.”
The coalitions that GRI has joined include Aviva Investors and Colonial First State Global Asset Management. Locally, other groups are looking into the issue as well.
Nathan Fabian, CEO of the Investor Group on Climate Change, said that while the issue of “comply or explain” is of interest, there are limitations to the proposal and that IGCC does not have an official position.
“There are some limitations with the current arrangements relative to the Rio proposal and that is that comply or explain only covers the locally listed companies, not unlisted companies or those listed offshore – both of which are important,” he said. “Secondly, the Principle 7 guideline doesn’t have sufficient guidance on climate change issues and so there are a few key limitations that would warrant support from investors for the Rio proposal.”