Measuring Global impacts and governance
I believe that the issue of measurement of environmental and social impacts at the micro economic i.e level of the organisation is a very important step in our society and that Government needs to see themselves as assisting the process in a regulatory manner ( mandatory or otherwise as it is happening workd wide as trend) .
It is also important in my view to ensure that government agencies ie bureaucracies also lead by exampke as they are often caught up in the issues of governace at the finacial management reporting ( political imperatives of the structure where money is public and funding accountability) but often neglect to report the impacts that they themselves have on the social and environmental front as organisations, participants and stakeholders of the larger concept called Society .
The sum of the micro parts is the macro level where good policies and governance can guide the bigger picture and allocate resources , mitigate losses and ensure sustainability.
My current work with GRI is a part of my bigger concern over years about social and environmental impacts and the way forward with better waste policies ( at Government level as Director of Waste Services) .
Reasons for working in this topic, project or business:
Because I love it
I love the passionate feeling of being involved in something that is contributing in a small way towards a better civil society where we are conscious ( geting there) of the risks and opportunity and mitigare or encourage to get there . I am a social scientist and to me thinking and engaging in these issues is part of my own social responsibility
Root causes of the problems in this field and main barriers:
Lack of awareness of the risks and opportunities
What is needed to overcome barriers to implement solutions:
How Stock Exchanges Help
Making Sustainability Reporting Standard Practice
for the Advancement of a Green Economy
The upcoming United Nations Conference on Sustainable Development (Rio+20) in June 2012 will
highlight once again the importance of speeding up action to tackle pressing issues like climate
change, pollution, energy and water scarcity, and human rights and the need for a solid institutional,
international framework that helps advancing green economies worldwide. Integrating the
consideration of environmental, social and governance issues into spheres that are traditionally
informed by merely financial information is one of the crucial steps needed in addressing the
pressing issues of the current century. Stock exchanges can have a big impact on the evolution from
unsustainable to green economies in helping to make Sustainability Reporting standard practice.
Around the world initiatives driven by stock exchanges that encourage companies to disclose
corporate social responsibility (CSR) information have increased. The various types of initiatives
i. Sustainability Indices (being so far the most popular one) over
ii. CSR labeling,
iii. the right to delist companies violating certain ethical norms (e.g. in Sweden) to
iv. stock exchanges either recommending or
v. even requiring, on a “comply or explain” basis, CSR information to be disclosed by
companies that wish to be listed.
Taking a closer look at the latter two types of how CSR or sustainability reporting can be encouraged
by stock exchanges or - in some countries - by their regulatory organization, the picture of a
changing landscape becomes apparent.
Interestingly, stock exchanges in Middle Income Countries of the global South and East have taken
the lead in terms of implementing binding sustainability reporting rules and other measures that
enhance and increase corporate sustainability reporting of listed companies.
Linking Listing Requirements with Sustainability Disclosure: Practical
Examples of how it can it be done
The Johannesburg Stock Exchange (JSE) of South Africa, the BM&FBOVESPA of Brazil and the Bursa
Malaysia can be found at the advanced end of the spectrum of hundreds of stock exchanges
worldwide. These exchange entities are among those that recently stepped in front adopting a
forward-thinking “comply or explain”- approach to CSR information disclosure either as a guiding
principle or a listing requirement for companies. In all three countries there has been a clear
business and market case for the action taken: Sustainability Reports increase a company’s
transparency and accountability to a great extent and offer investors the possibility to assess
companies on a broader base than only financial performance. Indirectly, the information deriving
from sustainability reports has thus the potential for stock exchanges to increase revenues,
safeguard reputation, mitigate operational risks and maximize international competitiveness.
With the emergence of Extensible Business Reporting Language (XBRL) that can be used to tag data
from both financial and sustainability reports
1 to make it computer readable, all those who collect
business data, including stock exchanges, regulatory bodies, rating agencies, governments,
economic agencies, and all those who produce or use it, including accountants, auditors, company
managers, financial analysts, investors and creditors are even given the possibility to quickly find and
assess or compare the specific information they are looking for in sustainability reports. Therefore
sustainability reporting does not rank behind the already mandatory financial reporting from a
technical point of view, not to mention its general importance in the current context of global
financial, environmental and social challenges.
Bursa Malaysia issued already in 2006 a set of guidelines for Malaysian public, listed companies
who wish to practice CSR. Building on this voluntary guidance, the exchange has then required public
listed companies and their subsidiaries to disclose CSR activities or practices undertaken and if there
are none provide a statement to that effect starting from the year 2008.
In 2010, the
Johannesburg Stock Exchange (JSE) of South Africa made Integrated Reporting –
meaning the production of report that combines financial and non-financial information - a listing
requirement based on the three subsequent government-mandated King codes on corporate
governance which recommend that organizations produce annual Integrated Reports. Again, the
flexible “report or explain”-approach is applied so that companies that do not provide an Integrated
Report have to make the reason behind this decision explicit.
In adopting a report-or-explain recommendation, the Brazilian stock exchange
recently (January 2012) joined the growing number of stock exchanges in developing countries that
address CSR. BM&FBOVESPA recommends that listed companies provide information on whether
they publish a regular sustainability report, or explain why if they do not.
Thanks to the XBRL taxonomy format for tagging data in Sustainability Reports that was launched by the Global Reporting
Initiative (GRI) on 8 March 2012, data on the sustainability performance of companies – including carbon emissions, water
use and human rights infringements – can now be easily revealed. More information is available on the GRI website under:
The table below sums up other important examples.
XCHANGE ENTITY INITIATIVE
Australia HIC, very high HDI Australian
Since 2010 companies listed on ASX must disclose if they have
developed a code of conduct on environmental risks and controls
China Upper MIC,
Since 2006 listed companies are encouraged to establish a social
responsibility mechanism & regularly prepare social responsibility
India Lower MIC,
Exchange Board of
In 2011 SEBI mandated listed companies to submit Business
Responsibility Reports describing measures taken along key
principles enunciated in the 2011 "National Voluntary Guidelines on
Social, Environmental and Economic Responsibilities of Business”
Pakistan Lower MIC, low
Since 2009 a General Order requires all public companies to
annually provide descriptive & monetary disclosures of CSR
Singapore HIC OECD
Category II, very
Singapore Exchange In 2011 Singapore Exchange adopted a Policy Statement & Guide to
Sustainability Reporting which describes sustainability reporting &
sets out broad principles to guide listed companies in formulating
their sustainability reporting frameworks
* HIC= High Income Country, MIC= Middle Income Country both according to OECD classification March 2012, HDI= Human
Development Index (classification according to UN Statistics Division March 2012)
It can be hoped that the mentioned examples of linking stock exchange listing to sustainability
disclosure will trigger more attention to this issue and eventually spill over to other emerging market
economies and the big stock exchanges in high income countries. Since the great majority of stock
exchanges has still not recognized the momentum, a sort of dual regulatory approach combining
government policies with stock exchange rules based on the “Report or Explain” principle can be a
suitable solution for other markets striving for higher competitiveness.
The need for a Global Policy Framework and the Case for a Report or
Stock exchanges and/or their regulatory bodies have the power to confront a large number of
companies with the topic of CSR in one move. However, as mentioned in the March 2012
“Sustainable Stock Exchanges”
2 progress report “for-profit exchanges need to have an added
incentive for them to act on this issue. As in the case of markets failures generally, where there is no
direct monetary case, the push may need to be regulatory
The very same report based on a study covering 27 large exchanges notes that three quarter of the
surveyed exchange entities are convinced of their responsibility to encourage CSR disclosure which is
also reflected in the recent transition of voluntary disclosure requirements to the stricter comply or
explain approach. Yet over half of the respondents that identified discouraging factors for
undertaking sustainability initiatives highlighted a lack of regulatory support.
In particular companies operating on a cross-border level can have a huge impact on all three pillars
of global sustainability, namely the economy, the society and the environment. But in today’s
globalized world also small and medium sized organizations should not be exempt from general
principles like transparency and accountability and publish information on their CSR performance.
Along the credo that global problems require global solutions, international law should set the rules
or level playing field for sustainability disclosure.
Setting a global policy framework for sustainability reporting based on the Report or Explain
Approach as advocated by the Global Reporting Initiative (GRI) would not only be a tangible example
of political commitment to sustainability per se and a concrete outcome of the United Nations
Conference on Sustainable Development twenty years of the Summit in Rio de Janeiro, but it would
also constitute a measure flexible enough to leave each government the choice of adopting the own
policy approach to the local context which ideally could then be connected to stock exchange listing
Stock exchanges should meanwhile follow the excellent seminal initiatives taken by the Bursa
Malaysia, JSE, BM&FBOVESPA and others that encourage the reporting of CSR information with a
Report or Explain approach.
Join the Report or Explain Campaign Forum:
Further information on Report or Explain
The Report or Explain Campaign Forum is a convening space for everyone who wants to drive environmental,
social and governance disclosure as a mainstream management and accountability tool. The Forum is open to
all who believe that sustainability reporting is necessary and beneficial – that companies should reveal their
performance or the reasons why they don’t.
The Report or Explain Campaign Forum tracks initiatives that are advancing towards the goal of mainstreaming
environmental, social and governance disclosure. The Forum features the latest news about how
Specific needs and/or support requests:
The need to connect and share a common vision for a better planet, drawing on a multidisciplinary approach to the problems .
It is a combination of human vision , talent and commitment to a course of action to improve and further the aims of the suatainbale and civil society.
Suggested best local solution for this topic:
Yes many via business and civil society as well as government involvement and advocacy.
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