By Andrew White
Nov. 3, 2011
Sustainability is a major buzzword flying through America’s corporations and it seems everyone is “going green” to gain attention, attract new customers, reduce operating costs and ultimately improve the bottom-line. So, how can a responsible corporation get the most out of its sustainability initiatives? Measure, monitor and report.
The role of sustainability reporting in corporations looking to improve environmental, social and financial bottom lines is a role that may be new and not completely clear to the executives that need to make the efforts happen. Sustainability reporting is a complex process and requires some level of expertise. Top executives are a crucial part of this process because of their high-level knowledge of their corporations and their ability to effect change across the organization. One of the best ways to undertake a sustainability reporting initiative is through an established framework and with the assistance of qualified sustainability professionals.
Understanding The Framework
Global Reporting Initiative (GRI) is an organization that has developed an internationally recognized, widely used framework for sustainability reporting. The framework is made up of principles, performance indicators and reporting guidelines, created to assist corporations (and many other entities) in measuring, monitoring and reporting their impact on the environment. GRI provides corporations with a set of guidelines for measuring sustainability efforts across a number of facets. GRI-trained professionals provide interested corporations with the necessary guidance and expertise to complete a successful reporting process and move forward in their sustainability initiatives.
Performance indicators within the GRI sustainability reporting framework include Economic, Environmental and Social markers. Specific markers are chosen early in the process to develop a complete report that reflects the mission and intentions of each individual corporation. GRI successfully ties these three aspects together into a framework that is adaptable to any corporation - executives can choose to focus on the components that are most important to their company and its stakeholders. A corporation must, however, choose indicators from all three aspects, guaranteeing a well-rounded, comprehensive study.
Choosing Performance Indicators
A critical early step in the sustainability reporting process through the GRI framework is choosing the performance indicators that your corporation will measure, monitor, and report. When choosing the report content, the corporation’s team of executives should consider the materiality and boundaries of the performance indicators. Materiality is the threshold of importance that determines when an indicator requires reporting. Determining materiality requires consideration of both internal and external factors including organization mission and strategy, and stakeholder concerns, along with greater social expectations. Priority should be given to items for which there is some level of control or influence and where there is a significant economic, environmental or social impact.
Deciding to report on certain performance indicators will create the boundaries of the report content. When first implanting a GRI report, executives may choose to adopt only a portion of the report and expand the framework over time. The GRI guidelines offer significant freedom to determine what to report, how it is communicated, and the amount of detail. However, the expected outcomes can guide the indicator selection process but the chosen indicators must not be based on the exclusion of potential negative results.
To customize an organization’s GRI report even further, Sector Supplements are available for some industries, such as financial services, electric utilities and food processing. A number of other Sector Supplements are currently under development by the GRI.
An initial reporting effort can serve as a baseline for future sustainability initiatives. Even if the corporation hasn’t taken those first green steps, the report can be an enlightening experience to determine where the opportunities are the greatest, and provide a way to measure future successes. Developing a baseline study will allow an organization to set goals and benchmarks for sustainability initiatives. After implementing future initiatives, these benchmarks can show how far the corporation has come in reaching its goals. Additionally, the GRI can enlighten a corporation to aspects of the company that would benefit from sustainability initiatives that may not have been visible prior to the reporting process.
Bring In An Expert
Bringing a GRI-certified consultant into the reporting process allows the corporation to navigate the GRI with the assistance of trained experts. You know your company and your consultant knows the GRI. Together, your knowledge, expertise, and motivation will lead to the development of a successful, meaningful, and relevant report.
As a top executive, you can bring your company to a more sustainable, profitable place by understanding the synthesis of the three components of the GRI within your corporation. A high-level look at the entire corporation through the lens of sustainability will offer new insight into opportunities for growth, savings, and publicity. Measuring, monitoring, and reporting, is the best way for a top executive to get the most out of sustainability reporting, and in turn, give the most back to the corporation and the environment.
Andrew White is an Environmental and Safety Specialist at EBI Consulting (www.ebiconsulting.com), a privately owned company that provides environmental sustainability, due diligence, technical and management consulting services to a diverse base of real estate, telecom, life sciences, finance, health care, academic/laboratory and manufacturing clients, including many “Fortune 50” companies. He can be reached at [email protected].