One year after the launch of the Sustainable Development Goals (SDGs, or Global Goals), the World Business Council for Sustainable Development (WBCSD) proudly announced that nearly a third of its members are communicating on the SDGs, just as United Nations (UN) officials called for more integration of the Goals into corporate sustainability reporting at an annual meeting in Geneva.
The private sector has a significant role to play in meeting the Global Goals, but incorporating social and environmental factors into global corporate accounting remains a sizeable challenge, said Mukhisa Kituyi, the Secretary-General of the United Nations Conference on Trade and Development (UNCTAD). The organization is hosting a meeting of accountancy experts that runs October 4 to 6, where the Secretary General and others encouraged more businesses to engage in corporate sustainability reporting and integrate the Goals into their reporting.
“Corporate sustainability reporting can be a powerful tool to measure the contribution of business towards the SDGs,” Kituyi said on Tuesday. He also welcomed collaboration between the international development and accounting communities and acknowledged the challenges of going from single-issue financial reporting to reporting with social, environmental and other sustainability factors.
Kituyi noted four main tasks:
- To adopt a “multi-stakeholder” approach that reaches beyond the accounting community and include players from policy communities at national, sub-national and international levels
- To ensure coherence between financial, economic, social and environmental policies
- To harmonize standards and indicators with an integrated framework
- To provide a worldwide structure that will help small and medium enterprises to comply with standards and indicators
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“It is not easy to set these standards, but it is more difficult to implement them, especially in developing countries,” Kituyi said. “Many countries lack the knowledge and institutions to cope with implementation.”
UNCTAD further recommended that governments should seize the opportunity presented by voluntary standard schemes (VSS), such as those of the Marine Stewardship Council (MSC), the Rainforest Alliance, and the Better Cotton Initiative. The 2nd flagship report by the UN Forum on Sustainability Standards (UNFSS), released last week, notes that in some regions of the world, voluntary standards have become a must-have for brands that wish to build trust with consumers. The UN asserts that VSS aim to make production and consumption more sustainable for the environment, society, health, and the economy, but that their proliferation means that producers can find compliance complex and costly. The organization suggests that governments have an important role to play to ensure that the schemes remain accountable.
Not only are many of the world’s leading companies ahead on the adoption of VSS, but they are also well on their way with reporting on the SDGs.
The WBCSD and consultants Radley Yeldar released the 2016 edition of Reporting matters on Tuesday, which found that the Global Reporting Initiative (GRI) guidelines are still the most widely used among WBCSD members, with 80 percent of reporters using the G4 guidelines, and that nearly a third are communicating on the SDGs. Ten companies are using the SDG Compass to take action on the Global Goals.
The publication showcases inspirational examples of good practice that can be shared among members and provides insights into how progressive companies including BT, Enel and SABMiller have started communicating on the SDGs and integrating the Goals into their respective strategies.
Reporting matters 2016 is the outcome of the fourth review of WBCSD members' sustainability and integrated reports, and demonstrates continuous improvement in sustainability reporting by leading private sector entities. Since the first edition in 2013, 76 percent of companies have improved their overall reporting and 40 percent of companies have improved their materiality disclosures.
“Mainstream non-financial reporting continues to gain momentum, and businesses that address sustainability challenges in their daily operations will be rewarded in the long run,” said WBCSD CEO and president Peter Bakker. “Simply put, more sustainable companies will be more successful.”