Progress Towards Integrated Financial and Sustainability Reporting

A few weeks ago in June 2012, thousands of diplomats, world leaders, executives of corporations, institutional investors as well as social and environmental activists gathered in Rio de Janeiro for the U.N. Conference on Sustainable Development, a.k.a. Rio +20 Earth Summit.  Among the agenda items discussed was corporate sustainability disclosures - and although a global agreement was not reached on this topic, there was some progress made here. 


While over 2000 organizations already have registered sustainability reports with the Global Reporting Initiative (GRI), and more than 3000 organizations have submitted their environmental information to the Carbon Disclosure Project (CDP), investors are pushing for more consistency and global standards in environmental and sustainability reporting and standards are being defined for integrating sustainability reporting with financial reporting. 


Towards this goal, the Nasdaq OMX Group Inc. joined stock exchanges in Sao Paulo, Johannesburg, Istanbul and Cairo in an effort to require listed companies to report material information about environmental, social and governance risks.  


Also at the conference, UK deputy prime minister Nick Clegg revealed a government mandate that will force companies listed on the London Stock Exchange’s main market to publish the full details of their greenhouse gas emissions.  What this means is that all LSE-listed businesses will have to report total greenhouse gas emissions for the year beginning April 2013. The regulations will be reviewed in 2015, before ministers decide whether to extend the approach to all large companies starting in 2016.


By encouraging companies to take social and environment dimensions into consideration, and by helping investors to make socially responsible decisions, the exchanges are hoping to enhance transparency of information in capital markets and help create more aware investors.


These exchanges agreed to urge their more than 4,600 listed companies to measure and report on environmental and governance issues such as greenhouse gas emissions, water usage and gender equality, or explain why they won’t. They are also asking more exchanges to join the effort.


So again, while a global standard was not agreed upon at the conference, some progress was made in getting additional stock exchanges to require or encourage listed companies to provide more disclosures to investors and other stakeholders about the environmental and social impacts of their organizations, in addition to their financial results.  These initiatives are positive steps towards the adoption of “integrated reporting”, or the alignment of sustainability reporting with financial reporting which I covered in a prior article on this blog.  See link here:


https://blogs.oracle.com/epm/entry/integrating_sustainability_reporting_with_financial


For more information about the Rio 20+ Earth Summit and announcements made there, see the links below:


http://www.environmentalleader.com/2012/06/20/firms-on-london-stock-exchange-will-be-forced-to-report-co2-data/


http://www.businessweek.com/news/2012-06-19/nasdaq-joins-four-exchanges-in-sustainability-effort


http://www.forbes.com/sites/mindylubber/2012/06/19/a-tipping-point-on-sustainability-disclosure-in-rio/


For more information about Oracle’s solutions for environmental and sustainability reporting, check out the following resources:


Press Release - http://www.oracle.com/us/corporate/press/513393


Sustainability Reporting page on O.com – http://www.oracle.com/us/products/applications/green/risk-performance-management-304575.html#sustainabilityreporting


Feel free to contact me if you have any questions or need additional information:  john.orourke@oracle.com

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