1、SUSTAINABILITY REPORTING POLICY: Global trends in disclosure as the ESG agenda goes mainstream With contribution and support from:Supported by: The year 2020 will be remembered for COVID-19, a pandemic that put public health infrastructure and public education on centre stage. The lockdown of econom

2、ies furthermore illustrated an alternative scenario of what could be, for example a world in which greenhouse gas emissions fell drastically and where distant beacons on the horizon could be seen with a clarity long forgotten. This stimulated new debate on what climate-friendly economies and sustain

3、able business could look like. 2020 is also a milestone in the 2030 Agenda of the United Nations. Its Sustainable Development Goals (SDGs) have raised new expectations of what work remains to be done. They have also gained prominence among business actors, who rely on markets being informed adequate

4、ly, timely and strategically. However as signaled through the periodic Carrots Self-regulation (for example, issued by stock exchanges or industry bodies); Codes, guidance and questionnaires; Guidelines and standards for non-financial reporting; Index questionnaires (for preparing ratings). The upda

5、ted C key topics to focus on (climate change, social care and others); different types of statements and timeframes of coverage; different disclosure options (such as annual reports, sustainability reports, quantitative statements, questionnaire responses, digital platforms) and reporting reflecting

6、 financial, sustainability and integrated approaches. In 2006, C&S listed a spectrum of regulatory instruments, setting out the likely progression from soft information instruments used by early champions to collective requirements by industry, and eventually governmental regulation enshrined in law

7、. Figure 2 below is taken from our first edition and is a useful reference to consider where we stand in 2020. Non or pre-financial disclosure has progressed from first mover sustainability reporters in the 1990s to first integrated reporters in the 2000s, as well as first publishers of environmenta

8、l, social and integrated statements over the last two decades. 1 See the new GRI sector programme: https:/www.globalreporting.org/standards/work-program-and-standards-review/gri-sector-program/ 2 See the SASB sector standards at: https:/www.sasb.org/standards-overview/download-current-standards/ Sin

9、ce the 2000s a range of industry initiatives developed sectoral guidance. These included the Global Reporting Initiative (GRI)1 with its multi-stakeholder processes in developing standards, and the Sustainability Accounting Standards Board (SASB)2 with its recommended materiality topics for select i

10、ndustry sectors. Today regulators such as the EU have introduced mandatory disclosure requirements on specified topics, and with backing of central banks the argument is made for reporting by corporations worldwide on items recommended by the Task Force on Climate-related Financial Disclosures (TCFD

11、). The newly agreed Taxonomy Regulation of the EU is advancing agreement on standard sustainability criteria and terminology applied. The last two decades have shown how the non-financial and sustainability reporting policy landscape has matured. The C&S project partners do nonetheless underline the

12、 need for further efforts to align and mainstream reporting. C&S seeks to support the work of policymakers with a regular stock take of developments around the world. Command-and- control regulation Co-regulation / Self-regulation (collective effort with sanction enforced) Voluntarism (collective or

13、 unilateral effort) Economic Instruments Capacity building and information instruments For example: Education and training Sustainability reporting Community right to know (CRTK) and pollution inventories Product information (e.g. labels, certification) Award schemes National law requirement Industr

14、y leader / 1st mover From sticks to carrots: A spectrum of regulatory instruments Figure 2 - From Sticks to Carrots, taken from Carrots and Sticks for Starters 2006 Carrots & Sticks 2020 | 9 Global trends in disclosure as the ESG agenda goes mainstream The COVID-19 pandemic of 2020 highlighted the i

15、mportance of coordinated action from state actors to non-state actors worldwide. Such a globally relevant agenda is the spirit of the Sustainable Development Goals (SDGs). As a global framework, it provides a shortlist of key material topics for our planet and underlines the value of collaborative a

16、ction. As tracking progress against sustainability goals worldwide becomes increasingly pressing, it is timely to reference the SDGs to assess the fitness of non-financial reporting policies. The SDGs reflect a global consensus around the most urgent matters facing humanity, and serve as a compass i

17、n our journey. They can also inspire responsible business policies and practice. As one South Asian stock exchange regulator argued: “The SDGs are useful in two ways: firstly, companies can measure and report their impacts in relation to the SDGs and implement new ideas that improve the business, re

18、ducing their footprint and minimizing overall negative impacts. Secondly, organizations can use the SDGs as inspiration and design criteria for new product development and business process innovation, developing products and services that contribute to solving real global challenges while meeting hu

19、man needs.” The 2020 pandemic experience makes the above only more relevant. Accordingly, the following analysis emphasizes the importance of the SDGs as a common framework for concerted action by public and private policy actors alike. 3 https:/sustainabledevelopment.un.org/sdg12 4 or sustainabilit

20、y disclosure included in integrated or annual reports. The SDGs as a key driver and reference in policy Figure 3 shows the numbers of reporting provisions related to the individual SDGs. Considering that the SDGs feed into a time-bound 2030 agenda, explicit mentions of them in non-financial reportin

21、g policies is often lacking. Our analysis nevertheless makes high-level connections between reporting provisions and the SDGs, based on the thematic or topic-specific overlap. It should not be surprising from our mapping that the SDG headline themes most implied, directly or indirectly, by reporting

22、 provisions are the ones more directly associated with business operations. The most implied is SDG 12, on consumption and production, followed by SDG 16 on inclusive societies and accountable institutions, and SDG 8 on decent work and economic growth. SDG 12 encompasses target 12.6, which “encourag

23、e(s) companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle.”3 Governments are required to report the numbers of sustainability reports submitted on an annual basis, as required in SDG indicator 1

24、2.6.1.4 It is noteworthy that SDG 16 on peaceful and inclusive societies, with access to justice for all, is similarly highly implied in a world where increasing inequality is driving extensive debate on more inclusive economic systems. These SDGs most implied by reporting provisions are followed at

25、 significant levels by SDGs 13-15 related to climate, oceans and land, and SDGs 5 7 related to gender, water and energy. Since reducing poverty and hunger tend not to be explicit goals of commercial enterprises, it is perhaps unsurprising that few reporting provisions promote disclosure by business

26、on these broad themes. The Sustainable Development Goals Carrots & Sticks 2020 | 10 Global trends in disclosure as the ESG agenda goes mainstream It is surprising that equally few provisions provide for (direct or indirect) business disclosure on SDGs 3-4 on health and education. The COVID-19 pandem

27、ic is likely to lead to sharper focus on health and education, considering both public and private investment. In part, the health and education SDGs are ones where sector specific context may be more decisive, considering the content that, for example, pharmaceutical or life sciences companies as w

28、ell as information and communications technology (ICT) companies could disclose on their contributions towards health and educational infrastructure. Examples of such disclosures can be found in the SDG Compass5 of the GRI, UN Global Compact and WBCSD. There is therefore an important gap to be fille

29、d by sector-specific reporting provisions. This is, for example, being provided by the UN Environment Programme on sustainability reporting in the mining industry, for which a resource is being finalized for publication in 2020. Historically the mining sector was one of the first, through its associ

30、ation, the International Council on Mining and Metals (ICMM), to commit to GRI-based sustainability reporting. The organizations and industry sectors specifically targeted by reporting provisions are outlined in detail in a later section of the report. 5 https:/sdgcompass.org 6 https:/www.worldbench

31、markingalliance.org/system-transformations/ Sector-specific reporting initiatives are also of special relevance to SDG 11, and possibilities for disclosure on risks and opportunities related to sustainable cities and communities. According to the World Benchmarking Alliance (WBA), urban and digital

32、systems are two of seven key systems that need transformation.6 The WBA has aggregated the 17 SDGs based on these systems and identified the most relevant industries and companies with a critical role. One can foresee a collection of key indicators against which such companies can report progress ma

33、de in these key systems. On the alignment of reporting frameworks with the SDGs, a South Asian Central Bank regulator described an evolutionary process: “The GRI standards are aligned to the SDGs and the manual requiring companies to report will address reporting on SDGs as well. However, I think th

34、e focus currently would be to build the capacity of companies and to enable them to start sustainability reporting that would gradually lead to reporting on SDGs.” 0 50 100 150 200 250 300 Figure 3 - Number of reporting provisions linked thematically with individual SDGs (2020) Global trends in disc

35、losure as the ESG agenda goes mainstream Carrots & Sticks 2020 | 11 New initiatives created specifically with a focus on the SDGs include the SDG Corporate Tracker (2019), developed in Colombia in a partnership involving GRI and UNEP, a Presidential Regulation (57/2017) on SDGs Implementation publis

36、hed in Indonesia, the SDG Index7 listing of countries by the Sustainable Development Solutions Network (SDSN) and Bertelsmann Stiftung, as well as the SDG assessment of corporates offered by rating agency Vigeo-Eiris.8 Advice on how to report on the SDGs have also been published in recent years by t

37、he WBCSD9, International Integrated Reporting Council (IIRC)10, and GRI.11 7 https:/www.sdgindex.org 8 http:/vigeo- 9 10 See the SDGs, integrated thinking and the integrated report at: https:/integratedreporting.org/tag/sdgs/ 11 See GRI and UN Global Compact, Business Reporting on the SDGs at: https

38、:/www.globalreporting.org/information/SDGs/Pages/ Reporting-on-the-SDGs.aspx 12 https:/unctad.org/en/PublicationsLibrary/diae2019d1_en.pdf 13 https:/www.ifac.org/knowledge-gateway/contributing-global-economy/publications/sustainable-development-goals-disclosure-sdgd- recommendations The SDGs as a fr

39、amework for policy The SDGs can serve as a framework that influences the formulation of reporting provisions. This was evident from the interviews, which highlight that the non-financial reporting field from reporters, through standard setters, to report users and policymakers has witnessed a “stren

40、gthened understanding of the concept of sustainability in general.” While explicit reference to the SDGs in disclosure requirements and reporting policies is still uncommon, the formulation of reporting provisions is nevertheless increasingly informed by the SDGs. A South Asian regulator confirmed:

41、“The sustainability guidelines that we issued is fairly aligned with the SDGs and we have given the references to them in the document.” There are also international guidance documents, for example by UNCTAD on the core indicators for entity reporting on contributions towards implementing the SDGs,1

42、2 and by the International Federation of Accountants (IFAC) on SDG disclosure recommendations.13 The SDGs as a framework for non-financial reporting policy also has its limitations. The goals are time bound and policy developers need to consider time leading up to and beyond 2030. Consider also that

43、 historically the SDGs can be seen as the third marker on the international policy path to a sustainable world, where the first marker was Agenda 21 and the second was the Millennium Development Goals (MDGs). Furthermore, the SDGs describe national (country level and public-focused) impacts and beha

44、viors that are not directly translatable to organizational level and private sector operations. Carrots & Sticks 2020 | 12 Global trends in disclosure as the ESG agenda goes mainstream The government of Colombia has taken a proactive approach to engaging businesses in contributing to attaining the S

45、DGs by 2030 and report on their progress. In 2017 the governments of Colombia, Argentina, Chile and Brazil worked with the UN Environment Programme to develop a three-year project14 for enhancing the capacity to manage information from corporate sustainability reporting in the region. Throughout the

46、 project, the participating governments sought ways to further enhance the integration of the SDGs in corporate sustainability reporting. Part of the projects focus was a government-led development of sector-specific corporate sustainability reporting guidelines. Following multi-stakeholder consulta

47、tion, the food sector was selected for the four participating countries and each of the countries chose a sub-sector of key national importance. For Colombia the selected sub-sector was fish, shellfish, meat and meat products (fish and meat).15 In selecting the sub-sector and developing the sectoria

48、l guidelines, national priorities including the SDGs, were considered as well as the potential to achieve the objectives of relevant national laws, regulations and programs currently being implemented. These include the Sustainable Production and Consumption Policy and Green Growth Policy.16 Worksho

49、ps were held to assist businesses in initiating or advancing their sustainability reporting practices and collect input for the development of sectorial guidelines. The workshops were also an important tool for the four governments to design and adapt the guidelines to the needs of businesses and other stakeholder groups. 14 The project “Enhancing capacities to manage information from corporate sustainability reporting in Latin American countries” was funded by the UN Development Account and developed in cooperation with the Economic Commiss