Does Rio need a new corporate report card?
One of the issues for most businesses is that they are trying to solve problems of the future using models of how we do business that we came up with last century. That’s going to have to change says Alan McGill, a specialist in corporate reporting, in the Rio+20 team.
Businesses exist because they have information that tells them what to do. At the moment, a lot of that information, historically, has been financially driven and therefore businesses haven’t paid much attention to the environment, or social issues that they might create through their business operations. Some could argue they’ve been to some degree, blind to the issues.
Because of the increasing emphasis on transparency, businesses are becoming much more aware of the consequences of their actions. Stakeholders and interest groups are beginning to look at them in a very different way. They can access more information on companies and the speed at which they can share that information, not just locally but globally, and mobilise people on the issues has changed beyond recognition.
Individuals too are beginning to take a more holistic view of an organisation, and as a result decisions will be made in different ways. So how you vote every day with the pound, dollar, yen or euro in your pocket, who you give it to for goods and services, will start to change fundamentally. The impact will be felt in the way in which not just businesses operate but how they engage with the public in this regard.
New sources of information - measures, reporting - are absolutely paramount, as is a better understanding of how that information can inform decision making in business and critically, within governments, about how and where they spend their money.”
Here in Rio we hope to see more organisations starting the push for mandating of reporting by business. There have been recent calls by Aviva and the World Business Council for Sustainable Development that sustainability information is mandated in mainstream annual reports so that investors and other key stakeholders have access to this information.
Reporting regulations and standards level the playing field, and where national regulation is enacted, it will accelerate action from business, and change the business dynamic on corporate reporting. I’m hopeful we can see that come through from Rio+20.