the cima student

Many companies now see addressing the triple bottom line (economic, environmental and social factors) as core to their organisation strategies. Sustainability and Corporate Social Responsibility are topics high of the agenda of all large businesses and corporations.

By employing a successful corporate social responsibility and sustainability programmes businesses will reap the rewards of improved relationships with external stakeholders but in turn also sustain and improve profits by working in this manner.

Moreover, the positive effect it will have on the environment and social factors cannot be under estimated!!

But how do companies report on this? 

Well, the GRI: Global Reporting Initiatives are an independent organisation that was setup in the late 1990’s and have pioneered sustainability reporting. Previously, reporting in this area was seen as a niche area but now around 92% of the worlds largest 250 corporations report on their sustainability performance.

What is Sustainability Reporting?

Ultimately, sustainability reporting allows a company to consider the impacts of their operations on the environment and socially, so they can understand the risks involved and also the opportunities they face. It’s a transparent way of a company reporting these factors to all external stakeholders.

It’s a report published, positive or negative, by the company that demonstrates their impact on the environmental and social factors mentioned above. It also allows the company to present their values and governance models that can show close links between sustainability, CSR and their corporate strategy.

Moreover, it can also have an intrinsic element of integrated reporting; which is a more recent development that combines financial and non-financial reporting data.

Sustainability Report – Santander Group

Here is an example of a sustainability report produced from the banking giant – Santander Group. It’s a massive document that contains over 96 pages but the first paragraph in the message from the executive chairman  is telling:

“My view of the role businesses should play in society is very simple: every business must have a social purpose as well as a commercial one.”

And this sustainability report is the way of communicating how they are performing in this area. You can read the whole report here.

Alongside this report, Santander state on their website that are aware of the increasing interest from investors and analysts in the features of sustainability and non-financial reporting.

GRI is also mentioned in terms on HOW they report:

For its elaboration, Santander has relied on internationally recognised standards such as the Global Reporting Initiative (GRI) in its G4 version, assessing itself as Comprehensive under the requirements of the standard.

With this in mind, let’s go back to GRI (Global Reporting Initiatives) and understand how they set their standards for companies to report.

GRI: Standard Setting

The sustainability reporting standards set by GRI are done with the following ideas and elements in mind.

Multi Stakeholder Input: GRI uses multi stakeholders to combine the best technical expertise and diversity of practical experience to address the issues required in report writing and setting.

A Record of Use and Endorsement: As mentioned, 92% of the worlds largest 250 companies report using the GRI standards and this number is set to grow as their is a greater call from analysts and investors on companies to be more transparent in the non-financial reporting.

Governmental References and Activities: The GRI has long standing relationships with over 20 international organisations such as UNGC and OECD which is key considering companies in over 35 different countries use GRI for their sustainability polices.

Independence: The creation of the global sustainability standards board two years ago has given a greater degree of independence of the standards aspect of their work. Funding, meanwhile, is secured from diverse sources ensuring there isn’t a strong influence exerted by one key investor.

GRI and CIMA

You maybe wondering what this has to do with CIMA? Well, CSR and sustainability of key areas of the syllabus on ALL levels. And a key understanding of this area will go some way in helping you pass your CIMA exams.

For further reading I would suggest the following links.

Sustainability in emerging markets: a CIMA global document that looks at how sustainability is driving growth in emerging markets.

The GRI website: packed full of information on the how Global Reporting Inititaves operate.

Sustainability report examples: taken from the ICAS website, it provides a link to several report examples for some large MNE such as Coca-cola and Johnson and Johnson.