How can compliance be tracked: GRI?
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Tuesday, 26 June 2007 |
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The Global Reporting Initiative is the best known and most accepted corporate reporting standard. Currently, G3
is the most up to date standard and it attempts to balance the benefit
and costs of a universal standard. The more universal standard, the
easier it is to compare and track a corporations performance versus
other corporations. However, a one-size-fits-all approach becomes
ridiculous when you are trying to compare a bank and an oil company.
There are inherent industry , product, regional and other differences
that will set certain baselines for best industrial practices.
G3 serves at least two important roles: it creates momentum for CSR or
sustainability reporting, and it ensures that corporations will receive
reputational benefits for reporting and complying with CSR standards.
Issues with the Global Reporting Initiative:
- there is still room for education of corporations and especially institutional investors and consumers.
- even
if every corporation reported on its CSR practices how would an
investor or consumer be able to deal with the massive amount of data?
- who will do the actual monitoring to ensure that the reporting is correct?
- who will pay for this monitoring?
- will excessive requirements for disclosure lead to economic inefficiency without actually transforming behaviour?
Ways forward
- partnerships between corporations and ngos or for-profit
independent monitoring groups will go a long way towards ensuring that
the data is used efficiently and that its accuracy is ensured.
- there will still be a role for critical voices from NGOs and
journalists to monitor compliance. Their interests are to identify "bad
actors" so that they can further their own agendas. They are a more
difficult group to coopt.
Keys to effective partnerships:
- Cost and time efficiency in monitoring, this will include local
monitoring and trust building between corporations and local NGOs (For
example, if a local indigenous NGO reports water pollutio, the
corporation has to at a minimum acknowledge the complaint and work to
deal with the complaint.)
- Cooption is a risk, especially for profit-driven monitoring
groups - these groups do have an interest in ensuring their reputations
for impartiality but realistically they have to compete for clients.
For more information see our project about how to create fair standards.
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