Sustainability is increasingly playing a prominent role in the operation of business, as more companies are now focusing on improving processes, pursing growth, and adding value rather than simply focusing on increasing profits.
The adoption of sustainability reporting has especially been important in manufacturing and services industries, as both local and global policies on sustainability call for accountable businesses practices. This is clearly evident when we look at the number of reports in GRI’s sustainability reporting database, which have grown from 12 in 1999 to 6,248 in 2016, as companies increasingly accrue benefits from long term planning, and institutions expand the scope for disclosure requirements.
Tim Mohin Chief Executive of GRI (an international independent standards organization) speaks to Shenali de Silva of the Economic Intelligence Unit of the Ceylon Chamber of Commerce, and shares his insights and experience on the impact of sustainability reporting and its increasing importance to developing countries. The GRI Sustainability Reporting Standards are the most widely adopted global standards for sustainability reporting. “We track the largest 250 companies by turnover, and 93% of those are now reporting. And 85% of the S&P 500 companies, are reporting. So we are truly getting a consistent global language on ESG” said Tim commenting on the reach of its Environmental, Social and Governance reporting standards.
South Asian businesses have been no exception to this rule, and as these economies grow, sustainability reporting has been increasingly adopted to businesses practices as they assert themselves as true global citizens. The key drivers of this adoption has been the evolution and advancement of capital market references and requirements, and the demand from investors who’s keen focus on the region has been apparent during the past few years.
Commenting on the growth in the region, Tim says “It's really a few things. One is, we start with reputation, and if you see a competitor doing it, you’re likely to do it. Two is demand from investors. Three is the supply chain itself. Where bigger companies are asking their suppliers to produce information in the form of sustainability reporting. I know when I worked for very large firms, we certainly did that. And four it’s employees, I find it very interesting that young people are coming into the workplace with these values. Who come into the workplace and say “I want to work for a company that’s more than just about profit”
Businesses need to therefore think of the impact they’re creating in the long term, and sustainable reporting practices are creating a foundation for this. “Reporting is just the means to an end. But if we can align sustainability to capitalism, if we can get sustainability indicators to global commerce, then we will have achieved these ends we want to see” says Tim.
For countries like Sri Lanka, which have big ambitions for export led growth, it all comes down to plugging into large supply chains. This means being aware and sensitive to the sustainability requirements of all participants of these supply chains. This will inadvertently give these companies a competitive edge.
“So the supply chain can be anywhere. Conflict minerals is a new law that stretches the scope all the way to the raw materials, how are those raw materials produced? Are they produced from conflict? To modern slavery, the scourge of our earth is that millions of people are in a forced labour condition, and these have now entered the field of transparency where governments such as the U.K. are requiring companies to look all the way down their value chains. Do you have conflict sources? Do you have modern slavery? Probably not within the confines of the four walls of the company, but maybe two or three layers down below they do. And that’s why companies are beginning to look at these issues in their value chain. I think that’s going to drive decisions, especially in places that are trying to be export oriented in their economy like Sri Lanka.”
As the focus of businesses and the measurement of success changes, local businesses will also be required to reprioritize their growth strategies and reorient their operations to ensure that they are in line with global standards. The impact of sustainability reporting as Tim says goes beyond simply business expansion because “you get to leave a legacy behind that’s more than just about your wallet”.
 Infographic: Two Decades of Growth in Sustainability Reporting; https://www.3blmedia.com/News/Infographic-Two-Decades-Growth-Sustainability-Reporting