New Guidelines For Corporate Ethics Reports

The Global Reporting Initiative, whose standards are used by Microsoft and Nike, will introduce updated guidelines during its Oct. 4 conference.

A conference of the Global Reporting Initiative (GRI) that starts Oct. 4 in Amsterdam is to present new guidelines for groups that publish annual ethical reports in addition to their annual financial reports. With environmental and social issues becoming more and more important in public opinion, many businesses issue annual reports focused on those questions, along with other ethical issues faced by the company. The reports include, for example, information on gender equality in the work place, pollution levels or the impact that companies have on the labor market.

GRI bills itself as a framework for sustainability reporting and establishes guidelines used by nearly 1,000 organizations including global giants like Microsoft and Nike. "Sustainability reporting is a relatively new field that started only ten years ago," explained Ernst Ligteringen, chief executive of the Amsterdam-based GRI. "Now over 2,000 companies and organizations are publishing sustainability reports, according to a KPMG study, and around 1,000 are using the GRI guidelines which makes us the de-facto standard."

At its three-day conference, the GRI will introduce updated guidelines agreed upon after a three-year consulting process with business and non-governmental organizations (NGO's).

The main differences with the 2002 guidelines are that it will no longer be enough just to state company policy on issues like discrimination, businesses will now also have to present the figures behind their policies. "Before you could just state your company policy, now you actually have to report for instance how many disabled people work for you. There is much more reporting on what you are actually doing," explained Sandrijn Weites, the senior vice president of ABN Amro bank's sustainability report.

Critics say the GRI is a nice initiative but note that adherence remains voluntary and that reporting according to GRI guidelines did not mean a company actually scored well on ethical issues, just that it was being honest. "You can have the highest GRI standard (A+) report even if you fail on all aspects of the GRI. It does not say anything about your adherence," Ligteringen said. Voluntary reporting also has disadvantages for some companies. "One of the problems is that companies which are more transparent get more criticism from NGO's than companies that keep silent," Weites said.

Using the ethics reports, NGO's can easily identify where companies need to make progress, but when the latter provide little information on social, environmental and ethical issues it is much harder to pinpoint problems. Some companies have called for regulation from the EU or the U.S. government to ensure that all businesses use the same guidelines in their reports to come up with comparable results. Another question to be taken up at the GRI conference, Ligteringen said, was that of government regulation for corporate ethics reports versus self-regulation.

Copyright Agence France-Presse, 2006

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