Communicating Sustainability: Philippine company reporters and the Australia GRI Sustainability Conference


Sustainable development is a term that was popularized in 1987 after the publication of Our Common Future by the World Commission on Economic Development (WCED). Together with globalisation, the sustainable development agenda has become intricately linked into all human activities, challenging the notion that environmental and social integrity are not compatible with economic prosperity. The challenge is felt more in the business sector where firms have been urged to adopt the tenets of good social and environmental practices while pursuing profit-seeking activities. One interesting result of this challenge is the burgeoning utilisation of corporate reporting, particularly sustainability reporting, as a communication strategy aimed at engaging multiple stakeholders vis-à-vis business performance in the wider social context.

It was John Elkington who first coined the term triple bottom line reporting to promulgate the so-called three-pronged business strategy. Triple bottom line is an explicit scorecard describing the firm’s financial, environmental and social performance. It was the large multinational corporations that started practicing triple bottom line reporting, producing feel-good reports as they began to align the three sustainability principles with their internal and external activities. In what seemed to be an alignment of business and the sustainable development agenda, corporations began committing to a new paradigm of measuring corporate performance. The way that non-financial information is disclosed has changed considerably, and with it, the propensity to publicise such reports on a regular basis.

This new paradigm has prompted the evolution of annual corporate reports from the traditional reporting of financial statements to the more humanised accounts of its philanthropic and altruistic initiatives.  As consumer activism grew, the clamor for a more truthful disclosure reverberated even louder, challenging corporations to go beyond lip service and disclose realistic information about the social and environmental impacts of their activities. In response to this pressure, firms have become creative and innovative by employing a more stakeholder-oriented approach in their reporting. Upon researching in the Corporate Registry, the biggest website to host corporate reports, one could see a variety of titles and formats like corporate social responsibility (CSR) report, corporate citizenship report, corporate environmental reports (CER) and integrated sustainability report. The latter has become a catchall term that subsumed CSR, citizenship and environmental stakeholder and environmental performance reporting.

The Global Reporting Initiative (GRI), the Amsterdam-based propagator of the widely used sustainability reporting framework defines sustainability reporting as:

“…the practice of measuring, disclosing, and being accountable to internal and external stakeholders for organisational performance towards the goal of sustainable development.”

Today, these reports are not only mere recitation of a firm’s performance in terms of profit gains and revenue streams. They have become indispensable tools to convey what was achieved not only in terms of economic contribution but also in terms of what are currently being undertaken to demonstrate that product development and service delivery are executed with due regard for the well-being of the consumer and the physical environment where the firms operate. In some instances, the report has been used as a platform to promulgate the firm’s long-term strategies for business viability. For instance, energy giants Shell and Chevron have been using both their sustainability and corporate social responsibility reports, respectively to inform shareholders and stakeholders alike about strategic long-term goals and the platforms that will be used to achieve them (Royal Dutch Shell, 2010; Chevron, 2010). General Electric (GE) has found effective use of its website to broadcast its Imagination at Work sustainability initiatives. GE has an extensive cache of information in its website with specific details on its sustainable technology applications. Whatever title or medium firms use, the underlying reasons go back to the sustainable development agenda, which is most often translated by business firms as corporate social responsibility.

In the Philippines, the first GRI-based sustainability report was published in 2005 (Manila Water Corporation Sustainability Report, 2005). Since then only 13 other local companies have started producing similar reports. These reports were self-declared and have not undergone GRI check or third-party validation. In 2011 only two reporters, Energy Development Corporation and Petron Corporation, obtained the ‘GRI +’ application level, which means that these companies were reviewed by a third-party assurance. The other reporters chose to publish their reports at self-declared application level. This means that they meet the minimum requirements of using the GRI framework but did not subject their performance report to external review.

GRI-based sustainability reporting is a phenomenon that is obviously a normative practice among large corporations. But what has been said about the local companies? Do they also practice sustainability reporting? What are the driving forces that influence them to report? If so, what is the corporate story being communicated and who dictates this storytelling strategy?  Is their report comparable to those of multinational corporations’? Most importantly, how does an organisation make sense out of the external pressures and what particular action is it going to take to address the challenge of sustainability reporting? What strategic role would corporate communications assume, if any?

In July 2011, two local energy companies released their respective sustainability reports. It is interesting to know that these companies were former subsidiaries of the same mother company. It is even more interesting to observe the so-called sustainability paths that each one took after both were privatised. One remained in the oil refinery business while the other pursued renewable energy.

For the past 3 months, I have been involved in the third reporting cycle of EDC and those months were full of new learnings – from getting fresh perspectives on sustainability reporting to interacting with stakeholders and subject matter experts.

In about two months from now, a new report comes out from EDC. Petron is also aiming to release its sustainability report by then. The Ayala Group is also publishing their reports spearheaded by Manila Water, Ayala Land and Cebu Holdings. However, unlike Petron and EDC, they opt to self-declare their performance. The other two companies have been getting third-party assurance for their non-financial performance. Although sustainability reporting is not that robust in the country, we can already see that those that practice have a deeper appreciation of triple bottomline reporting and how this is impacting not only on their profitability but also on their long-term competitive advantage. For EDC, it has been integrating its reports sending the message to both shareholders and stakeholders that environmental and social acceptability are embededd in its business model. Today, its top exectives sign a compact, commiting their sectors to a set of  greening goals which aim to make its processes move up to higher levels of excellence, community partnerships at more meaningful context, environmental leadership sustained and the overall business resilient to economic shocks.

In a related development, the first ever Sustainability Conference in the Asia-Pacific region will be happening in Australia from 26-28 March.

That’s it for now folks. The first quarter of 2012 looks promising from a sustainability point of view. Watch out for updates from the Petron and EDC.

 

 


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About janusalmighty

Janus Almighty is an avid sustainability junkie. While shamelessly promoting sustainability of the corporate kind, he only does so to advance the practice of disclosing sustainability performance in the Philippine business sector View all posts by janusalmighty

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