VOLUME 6 NUMBER 5 - MAY 15, 2001

Accountability and the New World Order

The church is accountable to God. The company is accountable to the shareholders. The employee is accountable to the employer. The politician is accountable to the voter and on and on it goes, at least that was the way things were. A new accountability is on the horizon. Local and national governments, business, civic organizations, faith based organizations, and eventually individuals will be accountable to the new order. Accountability in this case refers to more than the bottom line. Sustainable development includes social, environment and economic for all entities on mother earth.

A new effort underway at the United Nations will create a reporting depository. This infant governmental body has dubbed itself the Global Reporting Initiative. Why would the United Nations want this detailed information? "Timely, credible, and consistent information on an organization's economic, environmental, and social performance is a key element in building sustainable societies." "Sustainable societies" is the goal/outcome the United Nations has established. How we get there (in the beginning) will be left up to us.

"The Global Reporting Initiative (GRI) was established in late 1997 with the mission of developing globally applicable guidelines for reporting on the economic, environmental, and social performance, initially for corporations and eventually for any business, governmental, or non-governmental organisation (NGO). Convened by the Coalition for Environmentally Responsible Economies (CERES) in partnership with the United Nations Environment Programme (UNEP), the GRI incorporates the active participation of corporations, NGOs, accountancy organisations, business associations, and other stakeholders from around the world." (http://www.globalreporting.org/AboutGRI.htm)

Watching a tree grow in the forest of government is a difficult task. In this case, the planters of the tree proudly acknowledge their sapling:

"By 2002, the GRI will be established as a permanent, independent, international body with a multi-stakeholder governance structure."
"Specifically, the GRI's goals are to:

Elevate sustainability reporting practices worldwide to a level equivalent to financial reporting;
Design, disseminate, and promote standardized reporting practices, core measurements, and customized, sector-specific measurements;
Ensure a permanent and effective institutional host to support such reporting practices worldwide." (http://www.globalreporting.org/AboutGRI.htm)

"Improved disclosure of sustainability information is an essential ingredient in the mix of approaches needed to meet the governance challenges in the globalising economy. Today, at least 2,000 companies around the world voluntarily report information on their economic, environmental, and social policies, practices, and performance. Yet, this information is generally inconsistent, incomplete, and unverified. Measurement and reporting practices vary widely according to industry, location, and regulatory requirements." (http://www.globalreporting.org/AboutGRI.htm)

Who is funding this new governmental entity?

"....the United Nations Foundation awarded a $3 million partnership grant to CERES (Coalition for Environmentally Responsible Economies) and UNEP (United Nations Environment Program 'to support GRI activities.' With additional funding from:

Ford Foundation
John D. and Catherine T. MacArthur Foundation
Charles Stewart Mott Foundation
Spencer T. and Ann W. Olin Foundation
United States Environmental Protection Agency

(http://www.globalreporting.org/AboutGRI.htm)

The United Nations Global Report Initiative has published its guidelines in a booklet entitled: Sustainability Reporting Guidelines on Economic, Environmental, and Social Performance June 2000. The booklet is available on the GRI web site. The following quotes should provide some idea of what will be expected in the beginning.

Part B: Reporting Principles and Practices

4 Ratio Indicators

Reporters are encouraged to express information as ratios (as well as to provide absolute values) where such ratios will make the information easier to interpret and understand. Where appropriate, ratio indicators should use factors from Section 2 of "Report Content".

For example, in order to illuminate the relationship between financial performance and environmental performance, an organization may wish to use eco-efficiency indicators. One way to express eco-efficiency is as the ratio of unit of product or service value per unit of environmental influence. Unit of value can be expressed by monetary indicators such as net sales or value added, by unit of activity level such as mass or number of products sold, or by the functional value a product finally delivers to its user such as personal mobility, hygiene, or security. Unit of environmental influence, such as energy use, material consumption, or air or water pollution, may be derived from information reported in the performance section of a GRI report (see Section 6 of "Report Content").in future releases of the Guidelines. (Page 19 )

Each report to the United Nations from business - financial/manufacturing, churches (they hold papers of incorporation), governmental entity, civic organizations will have a "Statement of the CEO, or equivalent senior management person, describing key elements of the report." (p23) This "....sets the tone of the report and establishes credibility with internal and external users."

Preachers are in essence the CEO of their organization, therefore the following advice would be directed at the CEO/(preacher).

"While the GRI does not specify the content of the CEO statement, it believes such statements are most valuable when they explicitly refer to the key elements of the report, particularly to the mission and vision sections, and to the organizations recent and future challenges in relation to sustainability."

Recommended elements include the following:
• highlights of report content and commitment to targets;
• declaration of commitment to economic, environmental, and social goals by the organizations leadership;
• acknowledgment of successes and failures;
• performance against benchmarks, previous years' performance, targets, and industry sector norms; and
• major challenges for the organization and its business sector in integrating responsibilities for financial performance with those for economic, environmental, and social performance, along with the implications of this on future business strategy.

Next the United Nations GRI recommends to the CEO/(preacher):

3 Executive Summary and Key Indicators

An executive summary is a succinct overview of the GRI report. Two principles guide the content specified below: (1) the need for a reporter to communicate most effectively with its stakeholders and (2) the need for users of reports to assess the performance of an organization both over time and in comparison with other organizations.

The executive summary is a key component of a GRI report. An effective executive summary provides the user with a balanced overview of the reports contents. Because each report differs in what is important to the users, the GRI does not specify detailed contents for the executive summary. However, a credible executive summary provides, at a minimum, a summary of key information, presented in an easily accessible format (e.g., graphically or in a table). Such information derives directly from the remainder of the report and includes, at a minimum:

• the specified generally applicable environmental performance indicators;

• selected organization-specific environmental performance indicators;

• selected economic performance indicators;

• selected social performance indicators; and

• selected integrated performance indicators.

Where applicable, this summary information should include information for the current reporting period, historical trends for at least the previous two reporting periods, and a target period.

The United Nations will likely frown on CEOs/(preachers) who include in their vision statement that there is only one way to God the Father.

4 Vision and Strategy

The reporting organization is asked to set out its vision and discuss how that vision integrates economic, environmental, and social performance.

The reporting organization is asked to present its vision for the future, particularly with regard to managing the challenges associated with economic (including, but not limited to, financial), environmental, and social performance. This may involve a discussion of how economic, environmental, and social goals and values intersect and are balanced in the organization, and how such linkages and balancing shape the organizations decision-making processes.

Reporters should use maximum flexibility and creativity in preparing this section, although it is suggested that any discussion be informed by a consideration of the reporting organizations key direct and indirect economic, environmental, and social issues and impacts. Reporters are encouraged to draw directly from economic, environmental, and social information, as well as any integrated indicators, presented elsewhere in the report. An organization may also choose to use this section to articulate its long-term vision of sustainability and to discuss any challenges or obstacles it might face as it moves in this direction. See www.globalreporting.org for supporting documents on this section.

GRI's home web site is:
(http://www.globalreporting.org/index.htm)

This is just the beginning.

For those who may say "this is going to happen, but not in my life time", there may be some disturbing news. The GRI has a time line. The time line is taken from their report "Options for the Design and Establishment of a Permanent GRI"

Next Steps - Transitional Planning

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