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Sustainability reporting gives local SMEs the chance to go big

Demand from global value chains for local companies that supply sustainably-sourced materials and utilise fair labour is on the upswing. Here's how a sustainability reporting programme is helping SMEs in developing countries bring their products to the global market.

Small and medium-sized enterprises (SMEs) in six developing countries will get a better chance at bringing their products to the global market as a result of participating in a sustainability reporting programme.

The Global Reporting Initiative (GRI) and the Swiss State Secretariat for Economic Affairs (SECO) announced on September 5 the start of the second phase of the Corporate Sustainability and Reporting for Competitive Business (CSRCB). The programme seeks to help local businesses in developing countries gain better access to global value chains by integrating transparency and sustainability reporting into their processes.

As more international companies seek to source products from local businesses that report their environment, social and government (ESG) impacts transparently, there has been a demand from local businesses to align with this in order to compete globally, observed GRI.

GRI also believes that entering global value chains could create more jobs and income opportunities for people, while upholding fair labour practices and sustainable use of natural resources. 

Businesses of all sizes can reap myriad benefits from sustainability reporting.

Eric Hespenheide, interim chief executive, Global Reporting Initiative

The second phase of the programme is being implemented in Colombia, Ghana, Indonesia, Peru, South Africa and Vietnam and will run until 2020. SECO is investing more than 5 million euros into the programme while GRI will provide sustainability reporting training. The target is to train up to 2,900 SMEs.

“We are excited to begin this second phase of our multi-year collaboration with the Swiss government and to build on the successes of Phase 1. GRI and SECO are united in the belief that businesses of all sizes can reap myriad benefits from sustainability reporting,” said GRI’s interim Chief Executive Eric Hespenheide.

For Phase 2, GRI will train local businesses to:

1. Increase reporting capacity, by encouraging more reporting by SMEs and giving them the tools and knowledge they need to prepare reports that are focused, transparent and responsive to all of their stakeholders

2. Create a conducive reporting environment, by enabling smart sustainability policies

3. Foster demand for sustainability data, by empowering stakeholder groups, such as investors, civil society, governments and the media, to use reported information to hold businesses accountable for their sustainability impacts

Phase 2 of the programme builds upon Phase 1, which saw an increased awareness of the need for sustainable business practices and for companies to report their ESG impacts.

Phase 1 was launched at the United Nations Conference on Sustainable Development – Rio+20 on June 16 2012, in collaboration with the UN Global Compact, a UN initiative that encourages businesses worldwide to adopt sustainable and socially-responsible policies, and to report on their implementation.

SECO and GRI chose the countries to participate in Phase 2 of the programme based on the growing number of local businesses reporting their sustainability performance. SECO and GRI also identified an urgent need to hasten the growth of local businesses participating in sustainability reporting in these countries.

GRI utilises a robust and comprehensive framework called the GRI Standards in preparing sustainability reports.

Under the programme, GRI will adapt the application of GRI Standards for SMEs across different sectors, combining GRI’s longstanding multi-stakeholder approach — which seeks inputs from globally, diverse set of stakeholder groups — and local context.

GRI deputy chief executive Teresa Fogelberg said sustainability reporting gives businesses the information they need to take action to improve the lives of the people affected by operations. “When companies come to grips with these impacts, they are fulfilling both a fiduciary and a moral duty,” she said.

Fogelberg said Phase 2 will also support the demand side of sustainability reporting by supporting report users, including investors and civil society organisations, and promoting to them the importance of requiring transparency and sustainability from companies they do business with.

“We are hopeful that our new approach in Phase 2 of the CSRCB programme will bring about many more success stories in the near future,” she said. 

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