Ensayo de germinación

2.4.1.1 The Institute of Social and Ethical Accountability (ISEA) AA1000AS The AA1000 Assurance Standard launched on 25 March 2003 is the world’s first assurance standard developed to ensure the credibility and quality of an organisation’s public reporting on social, environmental and economic performance (AA1000 Framework, 2003). The external audit process of a firm’s sustainability report is mainly based on the AA1000, GRI guidelines, ISAE3000, and/or Lloyd’s Register Quality Assurance. Assurance process involves stakeholder interviews, comparing reports, and reviewing documentation accuracy etc. For example,

“Evaluate the nature and extent of adherence to the AA1000AS principles of inclusivity, materiality and responsiveness and assure the behaviour of the organisation as reported.” – United Utilities 2010 corporate responsibility report: Assurance section

Following a comprehensive multi-stakeholder revision of the 2003 standard, the AA1000 Assurance Standard 2008 was developed. It provides a comprehensive method of holding an organisation to account for its management performance and reporting on sustainability issues by evaluating the adherence of an organisation to the AccountAbility Principles and the reliability of associated performance information. It requires the assurance providers to look at underlying management approaches, systems and processes and how stakeholders have participated. This enables them to evaluate the nature and extent to which an organisation adheres to the AccountAbility Principles. The assurance providers use the Principles as criteria when evaluating an organisation. It provides findings and conclusions on the current status of an organisation’s sustainability performance and provides recommendations to encourage continuous improvement.

2.4.1.2 The UN Global Compact (UNGC)

The UN Global Compact (UNGC) is a strategic policy initiative for firms that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti- corruption. The ten principles are listed as follows (UNGC homepage):

42 Human Rights

 Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and

 Principle 2: make sure that they are not complicit in human rights abuses.

Labour

 Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

 Principle 4: the elimination of all forms of forced and compulsory labour;

 Principle 5: the effective abolition of child labour; and

 Principle 6: the elimination of discrimination in respect of employment and occupation.

Environment

 Principle 7: Businesses should support a precautionary approach to environmental challenges;

 Principle 8: undertake initiatives to promote greater environmental responsibility; and

 Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption

 Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

The UNGC increased pressure on its signatories to report regularly on their ESG achievements, and removed 394 of approximately 3775 signatories for inadequate reporting (Ethical Performance, 2008). By complying with these principles, firms demonstrate their commitment to their stakeholder responsibility, and such firms are more likely to embrace environmental and social activities as an issue addressing their organisations.

The Principles for Responsible Investment are the result of an initiative brokered by the United Nations Environment Programme and the UN Global Compact. Asset owners, investment managers and professional service partners are invited to sign up to a set of six principles on environmental, social and governance issues. The Principles for Responsible Investment (PRI) provide impetus for investors to give greater consideration to ESG risks and provide better disclosure of ESG matters (Gifford, 2009).

2.4.1.3 Global Reporting Initiative’s Sustainability Reporting Guidelines The Global Reporting Initiative (GRI) was launched in 1997 to develop a globally accepted reporting framework (G3 guideline) and to enhance the

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quality of sustainability reporting. The key aim of GRI guidelines is to improve transparency, comparability and clarity. The GRI 2000 guidelines were revised in 2002 and 2006. The most recent one (2006 GRI G3 guidelines) includes three different types of disclosure guidance: strategy and profile; management approach; and performance indicators.

 Strategy and Profile: Disclosures that set the overall context for understanding organizational performance such as its strategy, profile and governance.

 Management Approach: Disclosures that cover how an organization addresses a given set of topics in order to provide context for understanding performance in a specific area.

 Performance Indicators: Indicators that elicit comparable information on the economic, environmental and social performance of the organization

(p.5).

Reporting firms are encouraged to follow this structure in compiling their reports, however, other formats may be chosen. According to Henriques (2010), GRI reporting guidelines have been developed by a multi-stakeholder process, which gives it a high degree of legitimacy, and set out the most highly regarded and widely used set of environmental and social indicators. Compliance with the GRI reporting guidelines is voluntary and these guidelines emphasise environmental, social and economic disclosures. Accordingly, by complying with these guidelines, firms demonstrate that they take their stakeholder responsibility seriously.

Most firms’ sustainability reports are disclosed in the form of GRI framework. According to a recent study by the Sustainable Investment Research Analyst Network (2009), more than 80% of S&P 100 companies provide information through sustainability websites; almost half produce a sustainability report; and more than one-third make use of the GRI guidelines, the international standard for environmental and social reporting. Worldwide, 77% of the world’s 250 largest firms use the GRI. Gifford (2009) states that GRI has pioneered the development of the world’s most widely used sustainability reporting framework and is committed to its continuous improvement and application worldwide. This framework sets out the principles and indicators that firms can use to measure and report their economic, environmental and social performance. Investors are increasingly asking their investee companies to use GRI as a reporting framework.

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Based on GRI guidelines, a firm’s sustainability report generally includes the following information;

 ‘About the report’ section briefly introduces the content of a firm’s sustainability report;

 CEO statement consists of business strategy, risks and opportunities information;

 Company information includes business services and products, culture, vision and value, governance and company structure;

 CR/sustainability strategy shows relevant CR strategy used or will be used in the following year;

 GRI G3 guidance - GRI table with key performance indicators including economic, social and environmental information respectively;

 Performance data contains past and/or future data with 5 years goals; and most of them are quantitative information;

 Stakeholder engagement and materiality sections;

 Assurance (GRI guidelines recommend the use of external assurance for sustainability reports in addition to any internal resources);

 ‘Contact us’ part provides information about a firm (e.g., media enquiry).

To sum up, AA1000AS, UN Global Compact and Global Reporting Initiatives reporting guidelines are voluntary policy guidelines at international level. According to Burchell (2008), in the UK, the Company Law Review and its subsequent output (the Government White Paper on Company Law), attempted to reach a compromise on the issue of non-financial reporting, by calling for firms of a certain size to report on social and environmental issues. That is, if it is 'material' to a firm's operations, then adequate pressure should be brought to bear on firms to fully disclose their impacts. In the UK, there are some regulatory requirements regarding environmental and social responsibility such as Companies Act 2006 and Pension Funds Amendment Act 2001 which are discussed in the following section.

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