Evaluating and measuring environmental impacts Flashcards
What is environmental/CR/sustainability reporting?
The practice of measuring, disclosing and being accountable to internal and external stakeholders for organisational performance towards the goal of sustainable development.
Why measure and report?
- Stakeholder pressures
- Legitimacy
- Media agenda setting affect
Stakeholder pressures?
- Relatively new concept
- Stakeholders may possess one or a combination of the following attributes: Power, Legitimacy, Urgency (Mitchel et al, 1997)
Legitimacy
• Corporate attempt to bridge legitimacy gaps
As Nasi et al. (1997: 301) state:
o ‘The potential body of information about the corporation that is unavailable to the public – the corporate shadow (Bowles, 1991) – stands as a constant potential threat to a corporation’s legitimacy. When part of the organisational shadow is revealed, either accidentally or through the activities of an activist group or a journalist, a legitimacy gap may be created.’
Media agenda setting affect
• Media shapes public awareness; the public needs the media to tell them how important an issue within the ‘real world’ is as, for many issues, individuals do not learn this from available real world cues.
Two issues: ‘Obtrusive’ and ‘Unobtrusive’.
• Inflation: ‘classic example’ of an obtrusive issue. The public would become aware of it every time they went to the store and they do not need the media to report the official statistics to realise that this issue affects their lives.
• Polluting activities undertaken at off-shore locations, or workplace practices in remote factories: Unobtrusive issues.
Islam and Deegan (2010)
Investigate the social and environmental disclosure of Nike, and H&M
Their results generally support a view that for those industry-related social and environmental issues attracting the greatest amount of negative media attention, these two corporations reacted by providing positive social and environmental disclosures.
Issues on Sustainability Reporting?
- Companies expected to move beyond just philanthropy to sustainability strategy and manage their overall sustainability impacts and performance;
- Financial report / balance sheet doesn’t provide answers on governance, strategy and sustainability – sustainability reporting emerges as complimentary to financial reporting.
- Financial reporting is heavily regulated, Social and enviro reporting is much more lax and less regulated
- Recent gov policies leave it to the market to regulate itself by avoiding negative externalities
- ‘Shareholder Primacy” – keeping shareholders happy is priority in today’s society
International reporting guidelines released by various organisations
- Global Environmental Management Initiatives (US)
- Global Reporting Initiative (GRI)
- Business in the Community (UK)
- Confederation of British Industry (UK)
Two major tools
- Global Reporting Initiative
2. UNDP and Global Compact
Global Reporting Initiative?
The Global Reporting Initiative (GRI) is an independent institution whose mission is to develop and disseminate globally applicable Sustainability Reporting Guidelines. \
Quite vague and common sense but considered progressive as asks for quantifiable data from companies.
The Guidelines are for voluntary use by organisations for reporting on the economic, environmental, and social dimensions of their activities, products, and services.
GRI 10 focuses?
Transparency: Full disclosure of the processes, procedures, and assumptions in report preparation are essential to its credibility.
Inclusiveness: The reporting organisation should systematically engage its stakeholders to help focus and continually enhance the quality of its reports.
Audibility: Reported data and information should be recorded, compiled, analysed, and disclosed in a way that would enable internal auditors or external assurance providers to attest to its reliability.
Completeness: All information that is material to users for assessing the reporting organisation’s economic, environmental, and social performance should appear in the report in a manner consistent with the declared boundaries and time period.
Sustainability Context: The reporting organisation should seek to place its performance in the larger context of ecological, social, or other limits or constraints, where such context adds significant meaning to the reported information.
Accuracy: The accuracy principle refers to achieving the degree of exactness and low margin of error in reported information necessary for users to make decisions with a high degree of confidence.
Neutrality: Reports should avoid bias in selection and presentation of information and should strive to provide a balanced account of the reporting organisation’s performance.
Comparability: The reporting organisation should maintain consistency in the boundary and scope of its reports, disclose any changes, and re-state previously reported information.
Clarity: The reporting organisation should remain cognisant of the diverse needs and backgrounds of its stakeholder groups and should make information available in a manner that is responsive to the maximum number of users while still maintaining a suitable level of detail.
Timeliness: Reports should provide information on a regular schedule that meets user needs and comports with the nature of the information itself.
UNDP and Global Compact?
The Global Compact is a purely voluntary initiative with two objectives: Mainstream the ten principles in business activities around the world & Catalyse actions in support of UN goals.
o Framework for continuous improvement
o This is even more vague and so is favoured more by organisations.
o Must address 10 principles in order to be affiliated with this.
o No guidelines of defined ways of going about committing to these principles.
- 10 principles address human rights, labour, environment and anti-corruption.
Environment Performance Indicators
Materials, Energy and Water Biodiversity Emissions, Effluents and Waste Products and Services Compliance Transport
Economic Performance Indicators
- Economic performance
- Market presence
- Indirect economic impacts
Social Performance Indicators
- labour practices
- product responsibility
- society
- human rights
