Wednesday, May 11, 2011

Интервью с экспертом по отчетам по устойчивому развитию Элейн Кохен

I was recently interviewed by the Center for CSR Development in Kyiv, Ukraine, following my visit there to speak at a conference on CSR for HR.

For those of you who speak Russian, here goes:

Элейн Кохен, международный эксперт по отчетности по устойчивому развитию и комментатор по отчетам по устойчивому развитию для CSR Wire предоставила Центру «Развитие КСО» эксклюзивное интервью по нефинансовой отчетности и отчетности по устойчивому развитию.

CSR Review: По-Вашему, какая ситуация сложилась с нефинансовой отчетностью в мире?

Э.К.: Я считаю, что сегодня нефинансовая отчетность находится в состоянии постоянного изменения. Хотя отчеты об устойчивом развитии стали привычной практикой среди компаний-лидеров и все большее количество отчетов ежегодно публикуется по всему миру, всего их делают только около 6 тыс. компаний. Впереди еще долгий путь к тому моменту, когда нефинансовая отчетность приобретет поистине массовый характер. Существуют некоторые факторы для увеличения количества нефинансовых отчетов: повышенное внимание законодательной власти или фондовых бирж к разглашению компаниями нефинансовой деятельности, инициатива «Сделай отчет или объясни» (Report or Explain) и движение по направлению к Интегрированной Отчетности (Integrated Reporting), которую многие компании ошибочно рассматривают как сокращенный вариант полноценных отчетов по устойчивому развитию.............. and as for the rest .... click here

Want the English version ? Click here or read on.

Here it is:

CSR Review: In your opinion, what is the global situation with non-financial reporting?

E.C.: I believe that non-financial reporting is in an interesting state of flux today. While sustainability reporting has become common practice among leading companies, and increasing numbers of reports are published globally each year, there are still only around 6,000 companies who report despite over hundreds of thousands which are prime potential for reporting. There is still a long way to go before non-financial reporting is truly mainstream. There are some drivers for increasing non-financial reporting which are gaining ground today – the heightened focus by legislative or stock exchange authorities to see more non-financial disclosures with “Report or Explain” initiatives now gaining ground, and the move towards Integrated Reporting which many companies might, mistakenly, see as a short-cut to full sustainability reporting. Overall, these elements will create more pressure for more companies to report.

Around the globe we are seeing different levels of non-financial reporting uptake with the UK, US and Japan leading in terms of numbers of reports, though emerging economies such as China and India are starting to gain ground. Eastern Europe, Middle East and many African countries are still lagging.

CSR Review: What are the perspectives of sustainability reporting in 5 years?

E.C.: Five years is not a long time, but as mentioned, the move towards greater integrated reporting will be tangible, I believe, though the results will not yet be entirely satisfactory. There will continue to be incremental increases in the number of companies disclosing non-financial data, with companies in countries where legislation is adopted gaining a significant lead. The format of reporting will change from paper-based to web-based, as it has been doing now for some time, and the leading companies will probably use their websites to host social and environmental data which is updated more frequently than once per year, thereby reducing the need to rush to produce an annual publication by a certain deadline. My hope would be to see more local country reporting by multinational companies, more sustainability reporting of events and more reporting by brands, as well as a much larger pool of companies of all sizes deciding to embrace sustainability reporting as a core element of their business communications. In terms of the quality of reporting, we should expect to see more focus on stakeholder engagement which is starting to be understood as a critical basis for sustainable performance, as well as more emphasis on impacts and outcomes rather than inputs. The Global Reporting Initiative upgrade to G4 should help to drive these changes.

CSR Review: In your opinion, isn’t the GRI Reporting Framework too complex for companies and readers?

E.C.: No, I believe the GRI Framework is accessible and workable for all companies. At the lowest level of transparency, the C reporting level, a company is required to disclose mainly policies and processes, without too much detailed information about actual performance, so that is a viable start-point for companies which have not yet embedded practices for more comprehensive reporting. Use of the framework at the highest transparency level, Level A, certainly requires much more detailed work, but if the company is good at sustainability performance, the reporting framework will be an advantage and not a hindrance.

The writing of a sustainability report does not need to be rigidly aligned to the GRI framework and it can be as creative or original as a company would like, as long as the performance data is in there somewhere, in line with the selected report transparency level. I use the GRI Framework for almost all GRI reports I write for clients, even small SME businesses, and the challenge is never the GRI framework, it is the company’s ability to define a strategy, measure progress and disclose data.

Reading a GRI based report is almost always much easier for the reader than a non-GRI report as there is a logical flow to the narrative defined through the progression of disclosures that the GRI Framework requires.

CSR Review: What is your perception of the beginning of the G4 process development?

E.C.: I believe the G4 is getting off to a promising start and has the right objectives. The GRI Framework, excellent as it is, is not perfect and there are several elements which should be addressed to improve the scope and usefulness of the Framework and align it to new directions in the field of sustainability. I hope the process will be successful in delivering its objectives.

CSR Review: What country, according to your experience, is the leader in the non-financial reporting?

E.C.: It depends what you mean by leader. Objectively, statistics show that the UK and the USA lead in numbers of reports, but when comparing numbers of reports to country GDP, the picture is a little different. South Africa, Finland, Chile and Portugal feature highly on this list (2009 analysis). If you look at legislation, then Denmark has to be out in front with their “Report or Explain” legislation which “encouraged” most of the top 1,100 Danish companies to practice sustainability reporting. If you look at report assurance, then the USA and South Africa appear to have the highest rate of external verification. In terms of report quality, then it is hard to make a generalization. There are many cultural factors which influence local country reports and it is hard to compare.

CSR Review: Should the NGOs and universities make non-financial reports?

E.C.: Yes, of course. In fact, any organization which has stakeholders should use sustainability reporting as a platform for dialog and engagement. Sustainability reporting is a highly useful tool for all organizations, not just those which are traded on the stock exchange. There is a growing pool of NGOs, academic institutions and also Trade Associations and local government authorities which are now reporting on sustainability and I believe this will grow.

CSR Review: In your opinion, what company has done the best non-financial report ever?

E.C.: There are several companies who report outstandingly well and it is hard to single one report as “the best ever!”. However, if I am pressed, I always come back to Vodafone and their “we said, we have, we will” reporting theme which was introduced, I think, in 2004, and which set a new kind of standard in accountability in sustainability reporting and communication. Vodafone has produced consistently good reports over the years, both at global level and at individual country level.

CSR Review: How can companies be stimulated to prepare non-financial reports?

E.C.: The CEO needs to get it. The CEO needs to understand that reporting is a business process which contributes to delivering improved business performance. However, sustainability reporting is the outcome of sustainability strategy and first, CEO’s need to embrace sustainability as a new way of doing business. If they do, reporting becomes a necessary part of this. External “stimulation” for enlightening CEOs is becoming more pronounced these days with increasing regulation, shareholder pressure, competitive pressure and customer demands, but there are still many CEO’s who resist. Sooner or later, however, they will realize that they will have no viable alternative than to be transparent about their sustainability practices.

CSR Review: What are the ways to popularize the non-financial reporting as now not many people read them?

E.C.: Someone said that sustainability reports deliver value the day they are printed, whether or not anyone actually reads them! This is because the process of developing the report is just as valuable as the report itself. We shouldn’t expect people to read reports as they read bestseller novels. More realistically, we should expect people to “use” reports rather than read them end-to-end, in order to understand more about a company’s specific performance so as to make informed decisions as stakeholders of that company. As an investor, a potential employee, a customer or even a competitor, I can use the sustainability report to check out a company’s position on issues which I feel strongly about. As far as “popularizing” reports is concerned, I feel this is the wrong objective. What companies should be doing is “popularizing” the dialog and the interaction with stakeholders. Companies should use the information contained in sustainability reports to provide different opportunities to engage with different stakeholder groups on matters of relevance to them. The report serves as the platform and a successful dialog may take place without actually “forcing” stakeholders to read the entire report. But it is important to remember that meaningful dialog cannot begin unless the company has first committed to a process of collating, measuring, analyzing and publicly communicating its sustainability performance.

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via  on Twitter or via my business website  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

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