This past January, the U.S. Securities and Exchange Commission (SEC) released guidelines to support publicly traded corporations in disclosing their climate change risks to shareholders.  According to SEC Commissioner Eisse Walter, the decision was “designed to improve the quality of disclosures filed by U.S. public companies for the benefit of investors.”

Now member organizations of the Social Investment Forum (SIF) are encouraging the SEC to take the corporate reporting requirements further and define mandatory ESG (environmental social governance) reporting according to Global Reporting Initiative (GRI) reporting guidelines. 

The GRI is the world’s most widely-used sustainability reporting framework and is “a comprehensive, uniform set of sustainability indicators comprised of both universally applicable and industry-specific components,” according to the SIF.

In March of 2009, the GRI called on governments to introduce, “policy requiring companies to report on ESG factors or publicly explain why they have not done so,” as was adopted in Europe in 2003.  The European Sustainable Investment Forum (Eurosif) believes that the “comply or explain” approach has not produced consistent results that could help investors, and that “European institutions should make reporting on ESG data no longer an option subject to interpretation but a requirement.”

Eurosif, along with its partner organizations in the European Combined Reporting Alliance for ESG, maintain that mandatory ESG reporting will enable investors and others to more accurately assess the value of a company and its contributions to the achievement of a more sustainable economy and society.

Aside from the benefits to investors, sustainability reporting – especially through the use of the GRI framework – helps companies engage stakeholders, set goals and measure progress towards meeting social, environmental and financial targets.  All of which boost a company’s financial prosperity.

Want to learn more about how to use the GRI sustainability reporting framework?  See our training opportunities at www.brownflynnlearning.com.