As momentum for sustainability reporting picks up in Singapore and across the world, Global Reporting Initiative (GRI) has launched a new global Sustainability Reporting Standards to help companies assess their non-financial impacts.
Announced in October this year and launched on Monday earlier this week in Singapore, the Standards replace the current GRI G4 Guidelines, the most commonly used framework for sustainability reporting.
A sustainability report is a document published by a company or organisation disclosing the economic, environmental, and social impacts of its everyday activities.
Bastian Buck, director, standards at GRI, said at the launch that the Standards retain the key concepts and disclosures found in the G4 guidelines, making transitioning “straightforward” for experienced reporters.
The Standards also make first-time reporting easier and more accessible, he added. To further help companies, the Amsterdam-headquartered non-profit has also published a G4 to Standards mapping tool on its website.
Sustainability reporters have until July 1, 2018 to adopt the new Standards, after which the G4 Guidelines is no longer a valid reporting framework.
The launch in Singapore was the first of the five sessions that GRI and Fuji Xerox are holding in the Asia Pacific region to introduce the new Standards to the private sector and local stakeholders. The event was hosted by document management and communications giant Fuji Xerox with support from local sustainability consultancy Paia Consulting and energy monitoring system provider Entrak.
Janet Neo, head of corporate sustainability at Fuji Xerox Asia Pacific, told Eco-Business that the shift from guidelines to standards is a “signal that sustainability reporting is maturing, and is accepted as an international standard. The Standards provide common language among businesses to understand its non-financial impacts”.
“Global customers will inevitably ask their vendors at some point of the procurement process - how and where do you procure, and what are you doing to be a sustainable company?”
Janet Neo, head of corporate sustainability, Fuji Xerox Asia Pacific
Another significant change to the framework is the shift to a modular structure surrounding what needs to be disclosed. This allows GRI to update any aspect of the Standards in the future without having to issue a completely new document.
The content has also been restructured, language simplified, and the Standards offer more flexibility in terms of how a company chooses to report.
The launch is timely given the Singapore Exchange’s (SGX) introduction of regulation in June this year, which makes it obligatory for listed companies to report on their environment, social and governance performance.
Neo said that while Fuji Xerox is not a listed company and is not obligated to report, the company has been reporting since 2003 following GRI guidelines because it values and prioritises customers’ satisfaction, and it also serves as a way to differentiate itself against its competitors. “Global customers will inevitably ask their vendors at some point of the procurement process - how and where do you procure, and what are you doing to be a sustainable company?”
She added that the company chooses to report because it sees the “value, urgency, and importance” of doing so. Through the process of assessing what is material to it, the company reviews issues from a long-term aspect and is challenged to think about what will happen in the value chain in future, she explained.
The Standards’ stepped-up focus on materiality will enable Fuji Xerox to narrow down the number of areas where the company can have the most impact and focus on delivering the maximum benefit, she added.
Attending the launch was Colin Seng, senior manager, Nippon Life Global Investors Singapore Limited, who said the Standards would help investors in their evaluation of non-financial factors as companies begin to report.
“Value, urgency, and importance of reporting”
A panel discussion - themed “Sustainability Standards and Non-Financial Information: Improving Business Decisions” - was also held on Monday in conjunction with the launch of the GRI Standards.
Sustainability reporting is one way for companies to future-proof themselves and make smarter decisions, said panellists who were from the private, civic and public sectors.
Yvonne Chan, director corporate development, Maritime and Port Authority (MPA), who also oversees the port authority’s sustainability efforts, said sustainability is about preparing for the future.
The MPA asked staff at various levels of the company what mattered to them and to the company as part of its materiality exercise and was “surprised that there were things people on the ground had thought about that management hadn’t, and vice versa”.
The assessment held up a mirror to the MPA’s strategies and the guiding principles developed from it eventually wound up as its sustainability report.
Another panellist, UN Global Compact Singapore’s executive director Wilson Ang, added that disclosure could be regarded as a pre-emptive measure today, especially with more consumers demanding accountability and transparency from companies, such that any perceived dishonesty can come back to bite it.
“You may do business-to-business transactions mainly, but your business partner could be doing business-to-consumer, and (backlash from consumers) will eventually come back to you,” he said.
Speaking separately to the audience, SGX special advisor Yeo Lian Sim said that reporting on environmental, social and governance factors “adds to and makes for more comprehensive analyses” of investment opportunities for investors.
Shareholders are more likely to stay with a company - as are partners and suppliers - when they are reassured and know what the company is doing and saying through reporting, she explained.
“CSR is corporate management”
Fuji Xerox’s commitment to sustainability reporting stems from its belief that sustainability is responsible business management, summarised in its mantra “Corporate social responsibility (CSR) is corporate management”, said Neo.
This boils down to the value chain approach that Fuji Xerox takes which ensures that each stage of the value chain is sustainable. Neo explained that having done a life cycle assessment for the entire value chain, Fuji Xerox realised that it was creating the most environmental impact not in the production of its machines, but on the side of the consumer, whose actions the company is unable to manage directly.
“So we took the responsibility back into our value chain and redesigned the entire product so it can be 100 per cent recycled and remanufactured,” she said, adding that the company has thus transitioned from a linear production model to a circular economy one.
Since 2004, Fuji Xerox has established an integrated recycling system across Asia Pacific, owning and operating centres where its used products are collected from customers, sorted by parts into a maximum of 88 categories, and recycled into new products or reused. This includes materials such as glass and rubber, which traditionally have had low recycling rates. Through this system, Fuji Xerox minimises the use of new resources and achieves zero waste production.
Fuji Xerox now has eco-manufacturing centres in China, Thailand, Taiwan, Australia and South Korea.
It also takes care to conduct an annual survey and on-site inspection for suppliers for its paper selling business in order to ensure that sustainability guides every step of its business.
The group is one of the few companies in Asia to ask for sustainability reporting at the corporate level as well as at its overseas companies, and produced its first sustainability report in 2003, said Neo.
It has also become a Gold member within the GRI community, which Neo said gives her company access to international best practices and capacity-building that will help take Fuji Xerox’s sustainable practices “to the next level”.
But most importantly, sustainability reporting helps to unite the company behind the common goal of more responsible business.
Neo said that each department has its own materiality issues but with reporting, the issues are reviewed and prioritised.
“It’s more than the report itself – the entire process guides the way the company runs and reinforces our concept of being a ‘strong, kind and interesting’ company,” she commented.