Green shoots for corporate reporting
The general feeling on the outcomes of the Rio+20 Earth Summit at the end of last month was one of disappointment or even failure. With such high hopes and expectations (and more than a sprinkling of charged emotions) the outcomes of such events are often viewed this way. However as the dust settles there is some cause for optimism, particularly in relation to corporate reporting.
Before the event Alan McGill, a fellow PwC Partner, wrote a blog post highlighting the need for businesses to change the information set they use to run the business and went on to call for corporate reporting regulations and standards to level the playing field and accelerate action from business. And though we might not have got the commitment to a more integrated method of reporting including (mandatory) sustainability reporting that many were hoping for it did remain in the final text when so many areas disappeared.
The important paragraph is Paragraph 47 which 'encourages' companies to integrate sustainability information into their reporting cycles reads:
"We acknowledge the importance of corporate sustainability reporting and encourage companies, where appropriate, especially publicly listed and large companies, to consider integrating sustainability information into their reporting cycle. We encourage industry, interested governments as well as relevant stakeholders with the support of the UN system, as appropriate, to develop models for best practice and facilitate action for the integration of sustainability reporting, taking into account the experiences of already existing frameworks, and paying particular attention to the needs of developing countries, including for capacity building."
This paragraph is already getting much support - Brazil, Denmark, France and South Africa have formed a political group called 'Friends of Paragraph 47' to advocate corporate sustainability reporting. This sort of support is what is needed to turn paragraph 47 into regulations and standards that provide much needed certainty for business.
The UK government has gone one step further. Nick Clegg announced in Rio that from April 2013 all companies listed on the Main Market of the London Stock Exchange will be required to publicly report on their greenhouse gas emissions in their annual report - a long awaited decision I highlighted in my blog back in April.
Are we seeing the first green shoots of a shift in corporate reporting towards a more integrated model that helps solve the problems of the future?
Do please keep in touch - I really value your responses to this blog.