What is paramount in reporting in 2017
It is given that significant developments in any field are driven by past decisions and advancements. For year 2017, the developments in CSR and sustainability reporting are considerably connected with environment. The end of 2015 was marked by COP 21, resulting in Paris Agreement – strong statement on the environmental course we wish to take globally. Though the obligations connected to it are generally self-imposed, it was a disheartening development when in June the US government made the decision to withdraw from the Agreement. However, it was equally uplifting to see over a thousand mayors, businesses, investor and academic institutions to declare themselves by signing an open letter, proclaiming their intent to adhere to the Agreement. This is not simply an external requirement they follow, but a clear sign of real change in perception and priorities, a commitment to taking environmental changes and sustainable development as an inherent part of our everyday life. It is therefore expected that companies will continue in these endeavours regardless of the political changes, which marks one of the major trends in CSR reporting in 2017.
The year 2015 also delivered a new platform in the form of UN’s Sustainable Development Goals for 2030. These are widely featured in media and supported by leaders in the field of sustainability. Some companies were fast enough to implement these goals into their strategies last year, but larger implementation is expected. Companies' integrating the SDGs in their strategies, targets and action plans is another major trend in CSR reporting in 2017.
Although the US government lapsed in their willingness to acknowledge the situation, the European governments picked up the slack. The new EU sustainability reporting directive, which came into effect this January and will produce first results in 2018, requires disclosure related to environmental, social, human rights, anticorruption, board diversity policies, outcomes, risks and other information.
While the general CSR and sustainability engagement continues to strengthen, the reporting itself, its form in particular, is a source of continued dissatisfaction. It seems that companies continue to produce reports that are boring, bland and fail to convey the intended message. The often mentioned problem is reports that not sufficiently targeted at their stakeholders and blindly following standards of reporting instead of focusing on their own particular issues. With the various guidelines themselves evolving and specializing, there is a need for consolidation and clarification. It seems inevitable that with growing emphasis on transparency, stakeholders will gain access to more information. However, to ensure that they do not lose interest and become overwhelmed by the sheer amount of data, companies should strive to find ways to engage their stakeholders with targeted reports.
The CSR and sustainability reporting frameworks and methodologies might differ, but almost everyone should know Global Reporting Initiative (GRI), which is still the most widely used one. It has only been few years since GRI started using their G4 guidelines and companies were attempting to adapt to it. Now, we are once again converting to a different system. Fortunately, GRI provides a guide for this change between the old G4 and the new GRI Standards. In effect, as of January 1st 2018. GRI is multi-stakeholder in its approach, maybe partly explaining its popularity, but is not the only one. Other, often mentioned frameworks are the International Integrated Reporting Council (IIRC) and Sustainability Accounting Standards Board (SASB). SASB framework being the youngest of the three, it is still in need of refining, but is used in an increasing number of reports. The IIRC’s framework then finds its increasing popularity in financial reports.
As someone who is tasked with searching for information on CSR and sustainability activities of companies, we would like to see a greater promotion by the companies themselves. It is counterintuitive that finding out about socially responsible and sustainable programs and policies regularly presents a serious challenge. Consumers and employees, being the most CSR and sustainability relevant stakeholders, need easily-accessible and intelligible source of informations, should companies hope for their activities to have real impact and attract more of both groups. That is something that businesses are still lacking.
Authors: Tatiana Čaplová, Karel Doleček / Pontis Foundation