1、How Stakeholder Metrics Reporting can Drive Sustainable Business:A Case for El Salvador,Guatemala and HondurasW H I T E P A P E RJ A N U A R Y 2 0 2 3In collaboration with PwCContentsForewordExecutive summary1 Introduction2 The World Economic Forum Stakeholder Metrics3 Sustainability contexts El Sal

2、vador,Guatemala and Honduras4 National economic snapshots5 Current response to sustainability reporting6 Sustainability in action:case studies7 Practical recommendations to boost sustainability reporting in Central America8 Conclusion:Reporting as a valuable toolAppendicesContributorsEndnotes3456810

3、628Cover:weible1980,Getty Images Inside:Getty Images 2023 World Economic Forum.All rights reserved.No part of this publication may be reproduced or transmitted in any form or by any means,including photocopying and recording,or by any information storage and retrieval system.DisclaimerThi

4、s document is published by the World Economic Forum as a contribution to a project,insight area or interaction.The findings,interpretations and conclusions expressed herein are a result of a collaborative process facilitated and endorsed by the World Economic Forum but whose results do not necessari

5、ly represent the views of the World Economic Forum,nor the entirety of its Members,Partners or other stakeholders.How Stakeholder Metrics Reporting can Drive Sustainable Business2ForewordThe call to action and the World Economic Forum In 2021,Klaus Schwab,Executive Chairman and Founder of the World

6、Economic Forum,was invited to join the US Vice-President Kamala Harris call to action,which originated the Partnership for Central America(PCA),an initiative of private and public entities committed to advancing economic opportunities and environmental resilience in three countries of Central Americ

7、a:El Salvador,Guatemala and Honduras.The World Economic Forum collaborates with the PCA,and one of its goals is to build an understanding of the important role of sustainability reporting among the business sector operating in the region.A broad-based consensus has emerged that businesses must behav

8、e sustainably,focusing on the long term in all contexts in which business operates the environment,the economy,employees,investors,consumers and local communities.Being a sustainable business is now essential to being a successful business.Encouraging globally aligned sustainability reporting can dr

9、ive capital allocation and corporate action towards addressing priority social issues and creating environmental solutions,thereby helping to achieve the PCAs objectives.The World Economic Forum has collaborated with PwC and local institutions working to enhance corporate responsibility(Fundemas in

10、El Salvador,Fundahrse and the Honduran Council of Private Enterprise(COHEP)in Honduras,and Centrarse in Guatemala)to review the sustainability reporting environment in Central America and to raise awareness of the Stakeholder Metrics(SMs)a sustainability reporting tool for national and international

11、 businesses in the region to get started on or enhance their sustainability reporting journey.This paper will:Explain the Stakeholder Metrics Share findings on the sustainability reporting context in the region and exemplify with business case studies Make recommendations for companies who want to i

12、mprove the quality and comparability of the sustainability information they share The role of governments and regulators is also of significant importance in broadening the scope of education on sustainability,creating incentives and developing policy measures to promote globally aligned sustainabil

13、ity reporting.Public and private leaders should work together to close existing gaps.We hope this paper will inspire leaders to take their engagement with sustainability measurement and reporting to the next level and contribute further to developing the region to its remarkable potential.Marisol Ar

14、gueta Head of the Regional Agenda,Latin America;Member of the Executive Committee,World Economic Forum LLCHow Stakeholder Metrics Reporting can Drive Sustainable Business:A Case for El Salvador,Guatemala and HondurasJanuary 2023William Menjvar Sustainability and Climate Change Regional Leader and As

15、surance Partner,PwC InteramericasHow Stakeholder Metrics Reporting can Drive Sustainable Business3Executive summaryCentral America is a bio-rich,developing region.It has recently faced civil wars,social upheaval and talent drain from migration flows.It also suffers from low productivity and low leve

16、ls of investment,public insecurity and,increasingly,the escalating negative effects of climate change.The region needs urgent development that takes into account sustainability issues.Sustainability issues of urgent importance in the regionApproximately 89%of the companies surveyed for this paper co

17、nsidered climate change significant for their operations.At least 70%had been directly or indirectly affected by climate events in the last five years.Latin America and the Caribbean region issue only 2%of green debt instruments globally.These statistics suggest that even considering environmental m

18、atters alone,companies in the region would benefit greatly from developing sustainable practices and reporting.Additionally,increasing awareness of sustainability in international markets means pressure is building in the region for companies to follow internationally aligned sustainability standard

19、s to remain part of or join international supply chains,attract foreign direct investment and not get left behind when converged standards arrive.Sustainability reporting is still emerging The research in this paper shows that sustainability practices and reporting in El Salvador,Guatemala and Hondu

20、ras are at an early stage and not yet at the level to support sustainable practices that would increase socioeconomic opportunities.Apart from those at transnational companies,most business leaders are not yet engaging with sustainability reporting or initiatives.In fact,85%of those surveyed were un

21、clear about the purpose and value of sustainability reporting.A further 80%had not conducted a climate change risk assessment at their company.Nearly half(46%)did not understand how to apply sustainability criteria to their company,while 40%said they did not have the financial resources to execute a

22、 new sustainability plan.It is clear from these statistics that many companies feel they do not know where to start.Using the Stakeholder Metrics to simplify and transformThe Stakeholder Metrics(SMs)allow these companies to begin or enhance their transformation towards sustainability and sustainabil

23、ity reporting.The SMs initiative is useful to connect companies,through a consistent set of priority metrics and narrative,to their commercial stakeholders,such as national and local governments,regulators and banks looking to offer green finance instruments and non-governmental organizations.The SM

24、s offer a coherent,manageable tool to support sustainability reporting.By considering the context in the region and examining how companies are already using the SMs,three recommendations have been developed,which will allow companies to progress their sustainability reporting journey now:1.Define a

25、 sustainability reporting strategy that makes business sense.2.Transform reporting operations to create a reliable foundation.3.Start collecting,measuring and reporting what matters,using the SMs as a guide.While the product of these recommendations is a corporate report that embeds sustainability c

26、onsiderations,it is not the final destination.The true goal is to encourage companies to embed sustainability into their“business DNA”,thereby unlocking long-term value for the businesses and their stakeholders.How Stakeholder Metrics Reporting can Drive Sustainable Business4Introduction1In recent y

27、ears,the world has become more conscious about sustainability and its meaning for business,the economy,society and the planet.Its definition is no longer restricted to“doing good”for the environment by limiting carbon emissions but stretches further to cover the long-term resilience of companies,gov

28、ernments and communities across social,financial and cultural spheres.COVID-19 threw this new definition into sharp relief as countries fought against inherent fragility to preserve the well-being of their population and the strength of their economies.At the same time,it showed us the complexities

29、faced in tackling problems of a global nature and serious economic import such as climate change and social inequalities.It has also revealed tenaciousness,innovation and mass mobilization of resources particularly at the state level.Over the same period,as the definition of sustainability has expan

30、ded,so has the remit and importance of sustainability reporting.This has been a positive and international trend that is helping stakeholders,including investors,to analyse and evaluate the risks and opportunities that companies face in the sustainability spheres in which they operate and the implic

31、ations of these for financial performance.Relevant,high-quality,comparable measurements and disclosures allow readers of the sustainability report to understand how companies are managing and transforming their business to be more resilient in the face of challenges and deliver sustainable outcomes

32、for all stakeholders.Even though this sustainability report is not the final objective of companies engagement with sustainability,it is a key tool to understand how sustainability issues impact business and how businesses,in turn,impact sustainability outcomes.The reporting process triggers busines

33、ses to think about concepts beyond traditional financial value creation and to focus on seemingly separate(but intricately related)areas of value creation in the environment,in society,and in their own approach to governance.This paper will start by explaining the usefulness of the Stakeholder Metri

34、cs(SMs)in beginning or enhancing a companys journey towards sustainable value creation.It will then examine the sustainability context in Guatemala,Honduras and El Salvador to give an overview of progress and areas for improvement.It will supplement these findings with the results of a survey conduc

35、ted by PwC.This context will be further enhanced with four brief case studies of companies in the region,Holcim El Salvador,Grupo Terra,Grupo Poma and Cemaco,to map sustainability practices there.Case studies from companies using the SMs will demonstrate the value of the initiative in developing sus

36、tainability practices and reporting for companies operating at all levels.Finally,recommendations and a conclusion will be presented to outline suitable actions for companies in the region to take now,as well as actions for investors and other stakeholders.How Stakeholder Metrics Reporting can Drive

37、 Sustainable Business5The World Economic Forums Stakeholder Metrics2One goal,many frameworksOne of the results of rapid advancement in the importance and depth of sustainability reporting has been the proliferation of standards and frameworks from which companies can choose to report.In contrast to

38、the well-established financial reporting standards(International Financial Reporting Standards(IFRS),US Generally Accepted Accounting Principles(GAAP),there was no single generally accepted international standard for sustainability reporting.There are many different frameworks,including the Global R

39、eporting Initiative Standards(GRI Standards),the UN Sustainable Development Goals(SDGs),the US Sustainability Accounting Standards Board(SASB),the Carbon Disclosure Project(CDP),the Integrated Reporting Framework and the Task Force on Climate-Related Financial Disclosures(TFCD).The SMs:catalysing pr

40、ogress towards a global sustainability reporting solution1 Navigating this array of frameworks,standards and tools has posed a significant challenge to reporting organizations.The clamour for greater alignment and harmonization prompted the chief CEOs in the World Economic Forums International Busin

41、ess Council(a community comprising approximately 120 large multinational businesses)to establish the SMs initiative in 2019 with support from Deloitte,EY,KPMG and PwC.The initiatives goal was two-fold.First,to boost comparability and consistency in how companies measure their sustainability performa

42、nce,and second,to accelerate the evolution of the sustainability reporting ecosystem towards rigorous and globally-accepted sustainability reporting standards.At the heart of the initiative is the belief that sustainability issues and sustainable value creation are increasingly material to business

43、performance.As such,they should be included in the main report with equal prominence and integrated into core business strategy.Against the backdrop of the many available frameworks and standards,the initiative used a lengthy and detailed consultation process across key players to identify a set of

44、priority industry-agnostic topics that are so important to business,the economy,society and the planet that all businesses should be reporting on them or explaining why they are not.Progress on convergenceThe World Economic Forums SMs project contributed to the formation of the International Sustain

45、ability Standards Board(ISSB)in 2021 by the IFRS Foundation.This is a sister organization to the IFRS International Accounting Standards Board(IASB),responsible for the widely-used IFRS.The ISSB has released two exposure drafts of standards so far one on general requirements of sustainability-relate

46、d financial information and the other on climate and these are expected to be final in Q1 of 2023.Other thematic and industry standards will follow,which are expected to be adopted worldwide.The World Economic Forum SMs are an important tool to help companies prepare for and align with global standa

47、rds.The climate elements of the World Economic Forum SMs are already embedded in the ISSB climate standard.The ISSB also references the SMs as useful to help companies identify,measure and report on other material sustainability topics.Companies in El Salvador,Guatemala and Honduras that find a way

48、to report on sustainability now and prepare themselves for internationally accepted standards will not only be valued by stakeholders,but they will also be making a positive difference to the urgent social and climate-related issues in the region,and the acute need for rapid development.The SMs:how

49、it works core and expanded metrics The priority topics are organized into four pillars(governance,planet,people and prosperity),aligned with the UN SDGs.Each signpost frequently used standards that they can apply to assist them with their strategy,transformation and reporting.The 21 core metrics are

50、 primarily quantitative metrics for which information is already being reported by many companies or can be obtained with reasonable effort.The core metrics focus How Stakeholder Metrics Reporting can Drive Sustainable Business6primarily on activities within a companys boundaries for example,TCFD im

51、plementation,total tax paid and anti-corruption governance methods.A further 34 metrics look to emerging leading practices,tend to be less well-established in standards and often have a wider value chain scope or convey impact in a more sophisticated or tangible way,such as in monetary terms.They re

52、present a more advanced way of measuring and communicating sustainable value creation,and companies are encouraged to report against them where appropriate.Such metrics include,for example,alignment of strategy and policies to lobbying,the impact of water pollution,and infrastructure investments and

53、 services supported(see Appendix 1).SMs 21 core topics and metrics organized into four pillars,aligned with the UN SDGsFIGURE 1Source:World Economic Forum,Measuring Stakeholder Capitalism:Towards Common Metrics and Consistent Reporting of Sustainable Value Creation,2020.The impact of the SMsSo far,n

54、early 200 global companies with a combined market capitalization of more than$6.5 trillion have adopted the SMs.The World Economic Forum also endorsed the establishment of the ISSB and was part of the preparatory working group that delivered the ISSBs first two exposure drafts incorporating content

55、from the SMs.As the ISSB presses ahead with the standard-setting process,the Forum continues the dialogue with its technical teams by contributing business input from its extensive corporate partner base.While the SMs is an excellent tool to give companies a running start on their sustainability rep

56、orting journey by guiding their early stages and shaping initial approaches and strategy,large companies that have been pursuing sustainability reporting for some time have also reported benefits.For example,one of the worlds largest brewers,Heineken,2 has said that the primary advantage of the SMs

57、is their acquired capacity to report sustainability progress in a consistent and comparable way with their peers.Similarly,at SABIC,one of the worlds leading chemical companies,reporting against the SMs has meant that transparency is valued within the company and has led to important leadership conv

58、ersations that have enabled progress on complex issues.Setting purposeGovernance body composition12PeopleMaterial issues impacting stakeholders3Anti-corruption4Protected ethics advice and reporting mechanisms5Integrating risk and opportunity into business process6Greenhouse gas emissions(GHG)7TCFD i

59、mplementation8Land use and ecological sensitivity9Water consumption and withdrawal in water stressed areas10Diversity and inclusion(%)11Pay equality(%)12Wage level(%)13Risk for incidents of child forced or compulsory labour14Health and safety(%)15Training provided(number,$)16Absolute number and rate

60、 of employment17Economic contribution18Financial investment contribution19Total research and development expenses($)20Total tax paid21ProsperityPlanetPrinciples of governanceHow Stakeholder Metrics Reporting can Drive Sustainable Business7Sustainability contexts:El Salvador,Guatemala and Honduras3Br

61、oader challenges in the regionThe three countries of focus in this paper El Salvador,Guatemala and Honduras are part of the Central American region that also includes Costa Rica,Nicaragua and Panama.Belize and the Dominican Republic also participate in the regional integration system.Since the 1990s

62、,in contrast to the previous two decades,the region has benefited from a stable economic and social environment.However,there are still significant challenges and as elsewhere room for improvements in economic and social inequality,citizen insecurity and institutional infrastructure.According to the

63、 World Bank(see Appendix 2),Central Americas economic growth has lagged far behind the rest of Latin America,East Asia3 and other middle-income countries.The World Bank also notes lower regional productivity levels than other developing geographies.Countries in the region have alarming security indi

64、cators,with high homicide rates.4 Demanding social and economic conditions,informality and environmental vulnerability mean the region is subject to the destabilizing influence of mass migration a serious obstacle to building and retaining a talented workforce.Additional challenges emerge from the c

65、limate itself since,despite being a low-carbon emitter(with only 4.4%of global emissions),the region is vulnerable to the effects of natural disasters.As a result of two hurricanes that hit the region in 2020,5 according to the World Food Programme,6.8 million people lost their homes and livelihoods

66、,and 200,000 hectares of staple food and cash crops were destroyed.Approximately 89%of companies surveyed by PwC consider climate change significant to their operation,at least 70%have been directly or indirectly affected by climate events in the last five years,and more than 60%consider social and

67、labour inclusion a priority in their agenda.This makes formal assessments of vulnerability and preparedness essential for businesses to be resilient and competitive,whether they are nationally orientated or part of international value chains.Remarkable growth potentialDespite these challenges,Centra

68、l America has extraordinary growth potential and is considered strategically important by many international companies.It is a territory filled with precious natural resources,with fertile land and access to forest and marine resources.It has relatively low employment costs and is close to huge mark

69、ets,including the US and Mexico,with access to international trade routes.As a result,several of the companies in Central America are connected to global value chains and total exports from the region increased by 28%6 in 2021 compared to 2020.These international connections have introduced the requ

70、irement to establish sustainability practices to remain competitive.Sustainably orientated companies can significantly impact social and environmental issues in the region,attracting global investment,boosting markets,improving society and protecting a fragile yet rich environment.To protect the reg

71、ions valuable resources and help prepare these countries for a fair transition,sustainable investment is needed from businesses and governments.Since the region only issues 2%of green debt instruments worldwide,there is a significant opportunity for investment.7Regional context of broader sustainabi

72、lity progressCurrently,Central Americas national sustainability indicators are mixed.With respect to positive environmental indicators,categories such as renewable energy consumption and carbon dioxide emissions per capita,results are above average(see Appendix 3).Yet,as suggested earlier,social ind

73、icators present a more challenging picture,with access to clean water,sanitation and electricity showing room for improvement.The private sector,which provides nine out of ten jobs in the region,has indicated that it is alarmed most by problems in the economic and social spheres and that its actions

74、,therefore,must be aligned with these areas of greatest concern to generate value for businesses,the economy and society.8 How Stakeholder Metrics Reporting can Drive Sustainable Business8According to the interviewees for this paper,the sectors that have the most advanced sustainability practices an

75、d reporting are:Agribusiness Construction Energy Food and beverage FinancialProgress on the UN SDGs is low overall,with El Salvador 79th,Honduras 112th and Guatemala 117th on the global progress ranking (see Appendix 4).How Stakeholder Metrics Reporting can Drive Sustainable Business9National econom

76、ic snapshots4El Salvador:key facts9Gross domestic product(GDP)2021:$28.74 billionExports(goods and services):$8.49 billion Key sector for green growth:EnergyPoverty index:30.7%(2020)10 Selected government UN SDG commitments:Develop a national climate change plan.Implement the Ecosystem and Landscape

77、 Restoration Program.Reduce economic losses in the agricultural sector caused by climate variability by 1%of GDP.Green finance initiatives:Launch the green protocol of the financial system,which seeks to ensure that financing has a sustainable component.How Stakeholder Metrics Reporting can Drive Su

78、stainable Business10Guatemala:key facts11GDP 2021:$85.99 billionExports(goods and services):$15.9 billionKey sector for green growth:AgriculturePoverty index:50.5%(2014)12Selected government UN SDG commitments:Reduce greenhouse gas emissions by between 11.2%and 22.6%by 2030.Obtain 80%of electricity

79、from renewable energy by 2027.Improve energy savings in the industry and commerce sector by 25%by 2027 versus 2013.Green finance initiatives:Part of the UN Sustainable Stock Exchanges Initiative.How Stakeholder Metrics Reporting can Drive Sustainable Business11Honduras:key facts13GDP 2021:$28.49 bil

80、lionExports(goods and services):$10.96 billionKey sector for green growth:AgriculturePoverty index:52.3%(2019)14Selected government UN SDG commitments:Continue progress towards the implementation of a climate policy framework.Reduce net greenhouse gas emissions by 16%by 2030.Achieve 80%of electricit

81、y supply from renewable sources by 2038.Green finance initiatives:Intends to create a Resilient Green Finance Strategy.Source:World Bank,2021How Stakeholder Metrics Reporting can Drive Sustainable Business12Current response to sustainability reporting5Central American companies do not yet consider t

82、he reporting of sustainability indicators a priority.As previously stated,currently 85%of respondents to the PwC survey are unclear about the purpose and value of sustainability reporting.Of those who report on their sustainability,only 25%use an international standard for their disclosures.The Worl

83、d Economic Forums SMs are now being socialized with local organizations,such as Centrarse,Fundahrse,the Honduran Council of Private Enterprise(COHEP)and Fundemas,who,together with the World Economic Forum,PwC and KPMG,ran three events in Guatemala,Honduras and El Salvador in August 2022.The aim was

84、to raise awareness of global developments and how the metrics can help companies start or progress their sustainability reporting.More than 200 company representatives attended these events.It will take a further and combined public and private effort to design incentives for meaningful sustainabili

85、ty reporting that can underpin economic and social development.International corporations operating in the Central American region are more mature in implementing standards and reporting and establishing successful social and environmental programmes.The large,consolidated groups in the region have

86、managed to implement a culture of sustainability.Medium and small local companies lack the technical knowledge,structure and resources to do the same.Consequently,they cannot articulate consolidated sustainability practices or strategies and embed them in the business models.As part of the research

87、outlined in this paper,it was determined that there is no consistency in applying a framework for sustainability practices between companies and countries.Those that already apply some practices and have implemented some metrics have not necessarily established goals aligned with the UN 2030 Agenda

88、and the SDGs.Few companies have information systems with well-defined processes and controls that allow them to set targets and identify metrics to measure progress accurately and comparably.How Stakeholder Metrics Reporting can Drive Sustainable Business13Sustainability in action:case studies6This

89、chapter presents four case studies one international and one from each of the three countries to illustrate how some companies in the region are already integrating sustainability into their reporting.Further case studies15 from other Forum corporate partners around the world are also available,and

90、these show in concrete terms how the Stakeholder Metrics are helping companies.Company introductionHolcim is a cement producer and marketer operating worldwide.In Central America it operates in El Salvador,Nicaragua and Costa Rica.Its goal is to be the biggest building solutions company in the world

91、.In El Salvador,it has two cement plants,nine concrete plants and an aggregate plant,a building solutions franchise,and a service division for infrastructure projects.Holcim,El Salvador,is trying to expand production in the region and reactivated one of its cement plants in 2022.What is the company

92、doing about sustainability?The company has a sustainability strategy called“accelerating green growth”.This is based on four pillars:climate,circular economy,nature and people.Selected goals include a global commitment to a 40%reduction in carbon emissions per tonne of cement by 2030 and scope 1 car

93、bon neutrality by 2050.To achieve this,it is prioritizing a transition to low-carbon products.Currently,one-third of the groups net sales are in sustainable building solutions.How does it currently report on sustainability?Holcim generates three annual reports that bring together the main sustainabi

94、lity key performance indicators(KPIs)in the business:An integrated annual report that gathers financial and non-financial information to communicate results and plans to stakeholders.A sustainability performance report to show how the company contributes to the four pillars of its sustainability str

95、ategy.This report is developed using GRI and SASB standards(the main sources of metrics for the Forums SMs)and is assured by an independent third party.A climate report that brings together the roadmap to climate neutrality and a climate risk analysis based on TCFD recommendations.What challenges ha

96、s the company encountered?And what successes?According to Jorge Pea,Sustainable Development Manager at Holcim El Salvador,“When companies start to make decisions based on carbon,things change”.For example,environmental and social KPIs linked to issues such as carbon emissions and health and safety a

97、re as relevant as financial KPIs for the criteria in the variable compensation of employees at the company.Pea mentions that keeping up with innovative technologies in recycling and offering sustainable solutions to customers can be hard to do while coping with climate and social changes.CASE STUDY

98、1Holcim:International and El SalvadorHow Stakeholder Metrics Reporting can Drive Sustainable Business14Company introductionTerra Inversiones is an investment firm with a diversified portfolio of companies that have independent legal and operational structures.The firm identify equity investments and

99、 strategic projects based on a great commitment to creating value,innovating and diversifying with a positive and sustainable impact,generating growth,innovation and well-being for the countries it work in.It is committed to investing in accordance with the highest standards and frameworks internati

100、onally recognized and has a strong track record in Latin America for responsible business conduct and sustainability-led investing.What is the company doing about sustainability?Terra Inversiones follows sustainability criteria when making investment decisions to ensure that they are equitable,susta

101、inable and transparent and that its business partners are aligned with the same principles.Their strategy is designed to manage resources in such a way that the investments achieve a significant impact on society,leaving what it describes as a business legacy with“long-term goals for competitive bus

102、inesses”that consider stakeholders responsibly and manage economic,social and environmental risks in a way that allows the companies sustainability into the future.How does it currently report on sustainability?The firm produces an internal report on its investments under ESG criteria and indicators

103、 defined by a materiality process of each business.The report can be publicly disclosed and follows the ISO reference standards,including 9001,14001,26000 and 37001 and other sustainability frameworks like Global Reporting Initiative and the stakeholder metrics.What challenges has the company encoun

104、tered?And what successes?In an interview with PwC,Mara del Carmen Nasser,Chief Sustainability Officer(CSO),and Francisco Hernndez,Sustainability/ESG Manager,detailed that the firms major challenge at the moment is to issue a single report encompassing the full diversity of the businesses.As a result

105、 of the diversity of work,selecting standardized criteria and indicators is challenge.They have started by providing general guidelines in a standardized way so that the different companies can follow similar indicators and KPIs using the same language supported by a specialized environmental,social

106、 and governance(ESG)data-driven software solution.CASE STUDY 2Terra Inversiones:HondurasHow Stakeholder Metrics Reporting can Drive Sustainable Business15Company introductionThis family-owned company was founded in El Salvador but has expanded its operations in Central America,Colombia,Dominican Rep

107、ublic and the US Grupo Poma has five main business segments:Automobile dealership(Excel Automotriz)Real estate development(Grupo Roble)Hospitality(Real Hotels&Resorts)Finance(Autofcil)Industrial(Solaire)They have integrated sustainability practices in each of their companies with programmes related

108、to social development(particularly in El Salvador through their Poma Foundation)and by integrating sustainability criteria in their business decisions.What is the company doing about sustainability?The corporate social responsibility(CSR)and sustainability strategy is developed across three differen

109、t dimensions:First,they develop initiatives internally.Working with collaborators and their families for their well-being,they recognize effective work and offer services and benefits well beyond the legal requirements.Second,they work on programmes directed to the communities they operate in.This i

110、s mainly,through the Poma Foundation,Fundacin Salvadorea para la Salud y el Desarrollo Humano(FUSAL)and Escuela Superior de Economa y Negocios(ESEN)on topics related to education,health,culture and the environment.The third dimension is related to the way they do business,each of the groups business

111、 divisions promotes specific programmes related to its operation,stakeholders and areas of influence,such as responsible consumption and proper management of natural resources,energy and waste(Real Hotels and Resorts and Grupo Roble)and generation of electrical energy through renewable sources,speci

112、fically solar energy.How does it currently report on sustainability?The current focus is on sustainable strategies and activities,and not yet on measurement and reporting of sustainability performance.Grupo Poma has been obtaining ISO certifications for their operations(specifically 9001 and 14000).

113、Also,when they develop a real estate project,they seek leadership in energy and environmental design(LEED)certifications.Alejandro Poma,Director of Grupo Poma,recalls that“Every time we evaluate a new project,we consider measures that contribute to making it responsible and sustainable”.The company

114、constantly evaluates innovative projects to ensure efficiency.However,they are also conscious that these innovations contribute to the culture of sustainability that all branches of the business are dedicated to.What challenges has the company encountered?And what successes?Sustainability is a cross

115、-cutting element that has always been present in the vision of the different companies that make up Grupo Poma.An example success story is Solaire,the groups industrial division when the decision was made to evolve from being a supplier of architectural materials and products to becoming a consultan

116、t specializing in sustainable solutions.The company says there is progress on the level of social awareness and with leaders of institutions who promote a culture of sustainability.However,as the recent results of the social progress index(SPI)indicate,there are still important challenges in terms o

117、f sanitation that require regulations and legislation that promote activities aimed at addressing these issues and promoting reporting.CASE STUDY 3Grupo Poma:El SalvadorHow Stakeholder Metrics Reporting can Drive Sustainable Business16Company introductionGrupo Cemaco was founded 45 years ago.It is t

118、he leading home improvement,home furnishings,toys and baby products retailer in Guatemala.The company strives to provide real value to their customers by delivering quality products,excellent customer service and a no-questions-asked-return policy to assure customer satisfaction.Grupo Cemaco s purpo

119、se is to improve Guatemala,one home at a time.Grupo Cemaco is proud to be a certified B Corporation.What is the company doing about sustainability?The company has integrated sustainability into its business strategy and is focused on 3 pillars:team,community and environment.In the team pillar,they w

120、ork towards improving the quality of life of their employees and their employees family members by focusing on four areas:improving their home,health,professional education and financial well-being.Some examples include,debt refinancing and relief,health coverage,access to clinics,financial educatio

121、n and discounts on products sold in Cemaco stores among others.In the community pillar,Grupo Cemaco has formed alliances with outside organizations focused on improving basic housing and education that have proven track records in Guatemala through donations and volunteer work.Finally,in the environ

122、ment pillar,Grupo Cemaco has taken steps to reduce waste,measure and increase recycling within the organization;support and promote reforestation efforts in Guatemala;improve energy efficiency and increasingly source their energy from renewable energy(currently more than 25%of their energy is self-g

123、enerated through solar panels,and more than 70%of their total energy consumption comes from renewable sources).The company has committed to become carbon neutral by 2030.Through the different measurements and certifications that the company undergoes,it constantly identifies areas to improve in its

124、sustainability strategy.How does it currently report on sustainability?Grupo Cemaco publishes an annual impact report as a member of UN Global compact.In addition,it undergoes different evaluations that are also reported.Grupo Cemaco is a certified B Corporation.To obtain this certification,it under

125、goes a thorough evaluation of its operations and impacts with different stakeholders.Grupo Cemaco is also a member of the Guatemalan centre for social responsibility(CentraRSE)and uses their IndicaRSE assessment to measure performance.(IndicaRSE is homologous to ISO 26000 standards and can be vincul

126、ated with UN Global Compact and GRI4).What challenges has the company encountered?And what successes?The company stated that adapting to global standards and reporting in a timely manner has been a challenge.The measurement of all activities within the organization is also challenging;however,the ha

127、rdest part is measuring activities within the supply chain,as there are suppliers with different levels of sophistication and ability to measure their different impacts.In addition,because of the nature of the business,many of the products being sold are not optimized for sustainable sourcing or pac

128、kaging.Grupo Cemaco is working with local suppliers as well as improving its international sourcing in order to obtain products for its customers that are not only great value but also sustainable.CASE STUDY 4Cemaco:GuatemalaHow Stakeholder Metrics Reporting can Drive Sustainable Business17Practical

129、 recommendations to boost sustainability reporting in Central America7Sustainability is no longer a topic detached from the strategic management of a successful business.Throughout the research conducted and exemplified in this paper,Central American companies have demonstrated that they are making

130、good progress on sustainability reporting despite a challenging context.The key reporting challenges outlined by some of the companies include:Selecting standardized criteria to report on a range of diverse business activities Adapting to accepted sustainability standards and reporting in a timely m

131、anner Reporting concisely Scarcity of technical support.Other companies are not reporting on sustainability at all.For those companies,finding the resources and time to do so can seem a tall order.For both groups those wanting to start reporting and those already in the journey the approach to susta

132、inability reporting should be the same in many respects since reporting is a cyclical process that must always be updated.It is a journey where the information matures as the company progresses,creating value by embedding sustainability into its business.Three key phases define the sustainability re

133、porting journey,whether for the first time or not:Reporting strategy The objective is to assess the current landscape.Compare current reporting against the sustainability reporting ambition to identify risks and opportunities and define the reporting strategy.Reporting transformation The objective i

134、s to create a foundation for clear,comprehensive,high-quality reporting processes and controls supported by strong governance and a set of policies aligned with the sustainability strategy.Reporting what matters Report progress against the companys wider business strategy and targets and comply with

135、 existing regulatory requirements.To navigate through these key phases,companies should take into account the following practical recommendations:Identify what matters to the company and stakeholdersThe Central American entities should review their purpose and aspirations in terms of sustainability

136、reporting,identifying what is important to their stakeholders.This process should include assessing reporting requirements to comply with the regulations in all the places they operate and what ratings and certifications would add value.Assess the current stateIt is important to understand where the

137、 company is in the sustainability reporting journey.Therefore,they should run a maturity assessment over current sustainability reporting,including people,processes,technology and controls.This will be particularly important to understand what they have already implemented and are doing well and wha

138、t they need to do to manage risks and accomplish their aspirations.Identify where the company needs to goCompare the current state against their aspirations and select the right benchmarks to design the companys sustainability reporting strategy and roadmap.At this stage,the companies should evaluat

139、e required capabilities and skill sets and develop an upskilling and/or hiring plan,if needed.Key milestones will depend on the maturity of the companys sustainability reporting journey.It will be relevant to adjust the strategy to fit the companys size,industry and business model.123How Stakeholder

140、 Metrics Reporting can Drive Sustainable Business18Integrate sustainability risks and data into the businessIntegrate sustainability risks into enterprise risk management and establish a sustainability information governance structure at the programme level,including policies,roles and responsibilit

141、ies,internal controls and document reporting processes.Align management incentivesAligning sustainability KPIs to executive and management incentives is particularly important to embed the strategy in the day-to-day work of executives and give the metrics and reporting the power needed to implement

142、the business strategy.Make it happenPerform the year-end closing process and issue the report on sustainability performance.This refers to external reports,but the company should consider that preparing frequent,high-quality internal reporting allows the company to track progress against ambitions o

143、r publicly communicate targets before formal external reporting.It also allows the company to refine its process and manage any control deficiencies before issuing the external report.Continuously improveAs mentioned before,reporting is a cyclical and iterative process that should always be reviewed

144、 for improvements.It is highly recommended to design a process to refine reporting as stakeholder needs and regulations evolve.Actions to establish effective sustainability steering and reportingFIGURE 2Source:PwC,2022For government and policy-makers Considering their role is mainly to create the ne

145、cessary conditions and incentives to drive the economy and enable their participants towards a sustainable model.In this regard,the following would be important levers to support the change:Requiring information that measures the true costs of environmental and social impacts of products and service

146、s would improve transparency and drive the achievement of priority goals.Facilitate and incentivize business innovation supported by technology and digital solutions to improve the inclusion of sustainability information.Rethink to create a transition plan with incentives and the progressive deploym

147、ent of new measures for fiscal policy integrating social and environmental indicators.Invest in education to improve the technical and scientific capacity of the country to ensure a sustainable long-term model.Embed into everyday business processesReport on strategy,progress against targets and regu

148、latory complianceConduct gap assessments,e.g.for KPIs,data collection,policies and internal controlsDefine the roadmap to meet reporting ambitionsClarify purpose and aspirationsEngage stakeholders to inform your materiality assessmentUnderstand regulatory and stakeholder requirementsRefine reporting

149、 process as stakeholder needs change and regulations evolvesReport what mattersClose the gapTransform reporting Identify the gapReporting strategyDefine ambition 123How Stakeholder Metrics Reporting can Drive Sustainable Business19For financial institutions and investors If the environmental and soc

150、ial risks can be measured,financial institutions should consider incentives and adjust their pricing models to consider these as part of the capital price.Work with the policy-makers to create a taxonomy that allows reliable and consistent identification of sustainable projects and businesses that t

151、hey can support/invest in to ensure sustainable long-term outcomes for the investors and other stakeholders.Sustainability reporting is a journey the more it matures,the more benefits it brings to the businessFIGURE 3Source:PwC,2022 Level of ambitionComplying_Regulatory compliance_Mitigating reputat

152、ional riskEmerging_ESG reporting is used internally in the business to monitor,measure and manage risks to protect valueIncrease maturity of sustainability reportingBaseline reporting strategyLeading reporting strategyLeveraging_ESG reporting is integrated into tools and reports used for decision-ma

153、king when managing risks and opportunitiesLeveraging_Technology-enabled ESG reporting provides frequent,robust data for real-time decision-making_Alignment between ESG reporting and corporate value creation_Building trust with stakeholders through relevant,transparent and trustworthy reportingHow St

154、akeholder Metrics Reporting can Drive Sustainable Business20Conclusion8Although similar and integrated in many ways,El Salvador,Guatemala and Honduras hold some differentiated characteristics,yet all three are in vulnerable geographic positions and social conditions.Despite low carbon emissions,they

155、 are subject to severe effects of climate change.In social and economic matters,these countries must overcome considerable challenges in society,political culture,regulations,education,housing and healthcare to achieve their development goals.Much of what sustainability reports currently communicate

156、 is voluntary,but that will not always be the case.In order to remain competitive both nationally and internationally as part of multinational corporations value chains,Central American companies already understand that some level of sustainability reporting is essential.Increasingly,all companies a

157、re expected to report on sustainability issues under internationally aligned standards.It is better to start now,as this allows companies to grasp opportunities,manage risks sooner and handle the business transformations required to reorientate towards sustainability before it is mandatory.Governmen

158、ts and regulators also have a significant role to play.More investment in education on sustainability is needed,and a broader and better understanding of what sustainability implies and what benefits flow from it must be promoted at a structural level.Greater collaboration and coordination between p

159、ublic and private sectors would be beneficial since the government can extend the reach of sustainability,and businesses have the innovative skills to execute action.Only by working together can they enhance the ability to drive social change,mitigate the effects of climate change,slow down global w

160、arming and boost prosperity in the region.So,while reporting is important in achieving sustainable outcomes,it is not the ultimate goal.The real aim for businesses is to create the greatest value possible for the planet and society as they successfully pursue their own business objectives.For this r

161、eason,it is recommended that businesses progress their sustainability journey as soon as possible,using the framework of the main corporate report to help integrate sustainability into their strategies and transform the systems and processes behind the information they need for decision-making.The m

162、ore companies progress their sustainability journey,the greater the chance that they and the region in general will remain successful and competitive into a sustainability-orientated future.How Stakeholder Metrics Reporting can Drive Sustainable Business21AppendicesStakeholder Metrics(SMs):34 expand

163、ed topics and metrics organized into four pillars,aligned with the Sustainable Development Goals(SDGs)A1Source:World Economic Forum,Measuring Stakeholder Capitalism:Towards Common Metrics and Consistent Reporting of Sustainable Value Creation,2020.Purpose-led managementProgress against strategic mil

164、estones12People Remuneration3Alignment of strategy and policies to lobbying4Monetary losses from unethical behaviour5Economic,environmental and social topics in capital allocation framework6Paris-aligned GHG emissions targets7Impact of GHG emissions8Land use and ecological sensitivity9Impact of land

165、 use and conversion10Pay gap(%,number)19Discrimination and harassment incidents(number)and the total amount of monetary losses($)20Freedom of association and collective bargaining at risk(%)21Human rights review,grievance impact and modern slavery(number,%)22Living wage(%)23Monetized impacts of work

166、-related incidents on organization(number,$)24Infrastructure investments and services supported28Social value generated(%)30ProsperityPlanetPrinciples of governanceImpact of freshwater consumption and withdrawal11Air pollution12Impact of air pollution13Nutrients14Impact of water pollution15Single-us

167、e plastics16Impact of solid waste disposal17Resource circularity18Employee well-being(number,%)25Number of unfilled skilled positions(number,%)26Monetized impacts of training increased earning 27Significant indirect economic impacts29Vitality Index31Total social investment($)32Additional tax remitte

168、d33Total tax paid by country for significant locations34How Stakeholder Metrics Reporting can Drive Sustainable Business22Average sectoral gross domestic product(GDP)growth,1991-2017(%)A2Source:The World Bank,Unleashing Central Americas Growth Potential,2021.Agriculture3.0GuatemalaHondurasEl Salvado

169、r3.5-0.6IndustryManufacturersServicesTransport,warehousing and communicationsFinance,real estate and businessWholesale,retail,hotels and restaurants3.13.13.32.83.92.44.34.83.37.56.44.04.87.54.13.62.93.3How Stakeholder Metrics Reporting can Drive Sustainable Business23World Banks development indicato

170、rs:Global goals:promoting sustainabilityA3Source:World Bank,World Development Indicators:Global goals:promoting sustainability Table,http:/wdi.worldbank.org/table/WV.3.People using safely managed drinking water servicesPeople using safely managed sanitation servicesAccess to electricityRenewable ene

171、rgy consumptionExpenditures for R&DUrban population living in slumsAmbient particulate matter(PM)2.5 air pollutionCarbon dioxide emissions per capitaNationally protected terrestrial and marine areasIntentional homicidesPercentage of populationPercentage of total final energy consumptionPercentage of

172、 GDPPercentage of urban populationMicrograms per cubic meterTonnesPercentage of total territorial areaPer 100,000 people202020018El SalvadorUnavailableUnavailable97.423.20.222.424.51.12.252.1Guatemala55.8Unavailable95.764.1Unavailable3124.11.110.128.2HondurasUnavailable49.791.149.8Unavail

173、able38.620.6110.938.9Latin America and the Caribbean75.434.198.127.90.720.816.72.621.722.3How Stakeholders Metrics Reporting can Drive Sustainable Business24SDGs overview in the Central American regionA4El SalvadorHondurasGuatemalaLatin America and the Caribbean2022 SDG index score69.663.161.069.5SD

174、G1:No PovertySDG2:No HungerSDG3:Good Health and Well-beingSDG4:Quality EducationSDG5:Gender EqualitySDG6:Clean Water and SanitationSDG7:Affordable and Clean EnergySDG8:Decent Work and Economic GrowthSDG9:Industry,Innovation and InfrastructureSDG10:Reduced InequalitiesSDG11:Sustainable Cities and Com

175、munitiesSDG12:Responsible Consumption and ProductionSDG13:Climate ActionSDG14:Life Below WaterSDG15:Life on LandSDG16:Peace,Justice and Strong InstitutionsSDG17:Partnerships for the GoalsOn trackModeratelyincreasingStagnatingDecreasingSource:Sachs,Jeffrey D.,Guillaume Lafortune,Christian Kroll,Grays

176、on Fuller and Finn Woelm,Sustainable Development Report 2022,From Crisis to Sustainable Development:the SDGs as Roadmap to 2030 and Beyond,Cambridge University Press,2022,https:/ Rodolfo BonillaAssociate,PwC GuatemalaLuca CastellaresSenior Associate,PwC PeruLiliana Goncalvez Manager,PwC GuatemalaSar

177、ah GreySustainability Reporting Advisor,Global Reporting,PwC UKFelicity HawksleyEditorPwC refers to the PwC network and/or one or more of its member firms,each of which is a legally separate entity.See for more details.PwC Interamricas is made up of seven member firms:PwC Panama,PwC Dominican Republ

178、ic,PwC Costa Rica,PwC Guatemala,PwC Nicaragua,PwC El Salvador and PwC Honduras.World Economic Forum Gabriele LiottaLead,Public Policy,Environmental Social GovernanceLara MouftierCommunity Lead,Regional Strategies,Latin AmericaHow Stakeholder Metrics Reporting can Drive Sustainable Business26Alejandr

179、o MuozSustainability and CSR Manager,EcotermoJorge Enrique Pea Head,Management,Geocycle and Sustainable Development of El SalvadorCarolina PinedaSustainability Manager,Fundacin Empresarial para la Accin Social(FUNDEMAS)Alejandro PomaDirector,Grupo PomaMara Pa RoblesChief Corporate Affairs Officer,Fl

180、orida Ice&Farm Company Gabriela RocaCorporate Affairs and Sustainability Director,Corporacin AGWilliam XilSustainability Coordinator,Grupo CemacoAcknowledgementsFrancisco Hernndez Ascencio Sustainability/ESG Manager,Terra ServiciosMara del Carmen NasserSustainability Strategic Director,Terra Inversi

181、onesRonal Contreras Special Services Manager,Center for the Action of Corporate Social Responsibility(CentraRSE)Sindy CuellarSustainability Manager,Corporacin AGClaudia Daz YanezOrganizational Development and Communications Director,FUNDAHRSECarlos De LenHead,Health,Safety and Sustainability,Industr

182、ias Alimenticias Kerns y CIAGabriel Higueros Energy Manager,La Casa de Las BaterasJorge Luis MoralesGeneral Manager,La Casa de Las BaterasJuan Pablo MoratayaExecutive Director,Center for the Action of Corporate Social Responsibility(CentraRSE)How Stakeholder Metrics Reporting can Drive Sustainable B

183、usiness27Endnotes1.World Economic Forum,Measuring Stakeholder Capitalism:Towards Common Metrics and Consistent Reporting of Sustainable Value Creation,2020,https:/www.weforum.org/reports/measuring-stakeholder-capitalism-towards-common-metrics-and-consistent-reporting-of-sustainable-value-creation.2.

184、World Economic Forum,Stakeholder Capitalism Metrics Initiative:Partner Case Studies(Part 2),2022,https:/www.weforum.org/whitepapers/stakeholder-capitalism-metrics-initiative-partner-case-studies-part-2.3.Ulku,Zaourak,“Unleashing Central Americas Growth Potential”,World Bank,2021,https:/documents1.wo

185、rldbank.org/curated/en/7826253/pdf/Synthesis-Report.pdf.4.“U.S.Strategy for engagement in Central America”,Obama White House Archives,2015,https:/obamawhitehouse.archives.gov/sites/default/files/docs/central_america_strategy.pdf.5.Worldometer,CO2 Emissions by Country database,https:/www.w

186、orldometers.info/co2-emissions/co2-emissions-by-country/.6.“El comercio exterior de Centroamrica alcanza resultados positivos durante 2021”,Aduana News,15 June 2022,https:/ Bonds Initiative,Green Finance Opportunities in Central America and the Caribbean 2021,2021,https:/ y los impuestos medioambien

187、tales”,PwC Interamricas,10 November 2019,https:/ Bank,GDP growth(annual%)El Salvador graphs,https:/data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=SV.10.Economic Commission for Latin America and the Caribbean,Social Panorama of Latin America and the Caribbean 2022:Transforming education as

188、a basis for sustainable development,2022,https:/www.cepal.org/es/publicaciones/48518-panorama-social-america-latina-caribe-2022-la-transformacion-la-educacion-como.11.World Bank,GDP growth(annual%)Guatemala graphs,https:/data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=GT.12.Economic Commiss

189、ion for Latin America and the Caribbean,Social Panorama of Latin America and the Caribbean 2022:Transforming education as a basis for sustainable development,2022,https:/www.cepal.org/es/publicaciones/48518-panorama-social-america-latina-caribe-2022-la-transformacion-la-educacion-como.13.World Bank,

190、GDP growth(annual%)Honduras graphs,https:/data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=HN.14.Economic Commission for Latin America and the Caribbean,Social Panorama of Latin America and the Caribbean 2022:Transforming education as a basis for sustainable development,2022,https:/www.cepal

191、.org/es/publicaciones/48518-panorama-social-america-latina-caribe-2022-la-transformacion-la-educacion-como.15.World Economic Forum,Stakeholder Capitalism Metrics Initiative:Partner Case Studies(Part 2),2022,https:/www.weforum.org/whitepapers/stakeholder-capitalism-metrics-initiative-partner-case-stu

192、dies-part-2.How Stakeholder Metrics Reporting can Drive Sustainable Business28World Economic Forum9193 route de la CapiteCH-1223 Cologny/GenevaSwitzerland Tel.:+41(0)22 869 1212Fax:+41(0)22 786 2744contactweforum.orgwww.weforum.orgThe World Economic Forum,committed to improving the state of the world,is the International Organization for Public-Private Cooperation.The Forum engages the foremost political,business and other leaders of society to shape global,regional and industry agendas.How Stakeholder Metrics Reporting can Drive Sustainable Business29