© 2007 Centre for Public Agency Sustainability Reporting Action and Engagement in the Marketplace – the Role of the Public Sector with CSR and Sustainability Phil Hughes Director, Centre for Public Agency Sustainability Reporting™

© 2007 Centre for Public Agency Sustainability Reporting A collaboration of –

© 2007 Centre for Public Agency Sustainability Reporting Global mission to improve the performance of public agencies through the practice of sustainability reporting –Measuring, accounting and disclosing an organisation’s economic, environmental and social performance to advance sustainable development, promote good governance and improve performance Centre builds capacity in public agencies and promotes best practice sustainability integration and reporting through a range of programs and professional services

© 2007 Centre for Public Agency Sustainability Reporting What is Sustainability Reporting? Environmental performance Economic performanc e Social/ Cultural performance Governance

© 2007 Centre for Public Agency Sustainability Reporting Public Sector Sustainability Reporting Corporate: Internal Reporting on a public agency’s own sustainability performance (eg energy used in operations) Contextual or Spatial Outcomes Reporting on the contextual or spatial sustainability outcomes (eg energy used by households and businesses in a city or state) Policy Outcomes: External Reporting on policy performance (eg energy conserved through a public policy or program) Adapted from GRI Sector Supplement 2005

© 2007 Centre for Public Agency Sustainability Reporting Examples of Public Agency GRI Reporters Department of the Environment and Water Resources, and Department of Families, Community Services and Indigenous Affairs (Australia) Ministry of Economic Affairs (Netherlands) Architectural Services Department (Hong Kong) Sydney Water, Melbourne Water and SA Water (Australia) and Watercare Services (New Zealand) Landcom (NSW) and Landcorp (Australia) City of Melbourne and Redland Shire Council (Australia), City of Amsterdam (Netherlands) and Wolverhampton City Council (England) BC Hydro and Hydro Quebec (Canada) Manaaki Whenua Landcare Research Ltd (New Zealand) Many public agencies do not formally self-identify as GRI reporters

Responsibilities … “The larger an organisation, the greater its responsibilities to customers, communities and the environment” This applies to any organisation – private or public

© 2007 Centre for Public Agency Sustainability Reporting Why Public Agencies? The public sector is typically one of the largest sectors in every country, state and region The direct and indirect impacts of public sector operations on the economy, environment, and society are significant Public policies and programs significantly influence progress on sustainable development Increased efficiency, accountability and transparency are as important as for the private sector Increasing scrutiny of the public sector

© 2007 Centre for Public Agency Sustainability Reporting Public Sector Case for Reporting Enhance knowledge and measurement of total economic, environmental and social performance – internal and external Potential to increase efficiency by reducing operating/compliance costs Proactively manage risk and protect reputation Demonstrate performance and enhance the business case for ongoing public funding Improve organisational accountability and transparency Adapted from ACCA 2006

© 2007 Centre for Public Agency Sustainability Reporting Public Sector Case for Reporting Facilitate stakeholder engagement, and strengthen stakeholder relations and dialogue Attract and retain high calibre employees as an employer of choice Provide the ability to benchmark both within and across sectors Demonstrate innovation and leadership by the public sector Tell the “whole story” about an organisation’s performance Adapted from ACCA 2006

© 2007 Centre for Public Agency Sustainability Reporting Economic Case for Sustainability Reporting Finsia commissioned Econtech to examine the costs/benefits to business and the economy of “sustainability risk reporting” Benefits arise from lower borrowing costs with reduced risk, and higher labour productivity and sales from enhanced reputation Potential for an average profit gain of 2-3% for major companies that report on sustainability risks

© 2007 Centre for Public Agency Sustainability Reporting Recent Australian Developments Parliamentary Joint Committee on Corporations and Financial Services report on corporate responsibility: managing risk and creating value (June 2006) –Strongly supportive of the GRI –Acknowledged role of Government Corporations and Markets Advisory Committee report on social responsibility of corporations (Dec 2006) –Important role for Government in leading by example, providing information and supporting private sector approaches

© 2007 Centre for Public Agency Sustainability Reporting Why the City of Melbourne Reports? Present Council's performance in a holistic and transparent manner Document how policies, programs and actions affect key sustainability indicators at an organisational and municipal level Lead to more inclusive, responsible, informed and engaged decision- making Integrate information on performance into planning and management activities City of Melbourne Sustainability Report

© 2007 Centre for Public Agency Sustainability Reporting “Why report on sustainability Measuring and disclosing our environmental, social and economic performance allows us to better manage our risks and improve our performance, and demonstrates our commitments to our staff, stakeholders and the Australian community. It is good business and good governance.” “Our approach to sustainability Sustainability for the department means taking a long term view of our natural and cultural environment: one that also includes social and economic concerns.” Australian Department of the Environment and Water Resources Sustainability Summary Report

© 2007 Centre for Public Agency Sustainability Reporting Manages Melbourne's water supply catchments, removes and treats most of Melbourne's sewage, and manages major drainage systems Late 2006 released first integrated ‘Sustainability Report’ outlining its environmental, social and economic performance Amalgamated previously separate Annual, Sustainability, and Social/Environment Reports A single ‘Sustainability Report’ demonstrates Melbourne Water’s commitment to sustainability and ensures a solid focus on progress in years to come Melbourne Water

© 2007 Centre for Public Agency Sustainability Reporting What are the Challenges? Committing to sustainable development Obtaining buy-in at the minister, board, council and senior management level ‘Managing’ different reporting requirements Determining the appropriate scope and coverage of reporting Establishing reporting systems and obtaining quality data Embedding reporting within an organisation Using reporting to achieve change

© 2007 Centre for Public Agency Sustainability Reporting Sustainability Cannot be Taken Lightly… “Organisations cannot evolve to become ‘sustainable’ by simply ‘bolting’ on some new processes, writing a sustainability code, and then proclaiming that they are a sustainable organisation. It requires an extensive rethinking of not only what the organisation does, but how and why it does these things. It needs to be integrated within the company purpose, goals, strategy, processes and culture.” Source: IAG Submission to ASX 2007

© 2007 Centre for Public Agency Sustainability Reporting What are the Challenges? Committing to sustainable development Obtaining buy-in at the minister, board, council and senior management level ‘Managing’ different reporting requirements Determining the appropriate scope and coverage of reporting Establishing reporting systems and obtaining quality data Embedding reporting within an organisation Using reporting to achieve change

© 2007 Centre for Public Agency Sustainability Reporting Closing Points The public sector has a vital and important role in addressing CSR and sustainability Sustainability reporting is an essential management tool for addressing sustainability and enhancing accountability, transparency and engagement within any public agency To maximise the benefits, it is essential to integrate reporting with strategic planning, operations, communications etc The challenge is for leading and innovative public agencies to advance sustainability through reporting and demonstrate good governance

© 2007 Centre for Public Agency Sustainability Reporting Contact: Phil Hughes Director, Centre for Public Agency Sustainability Reporting™ 4/267 Collins Street, Melbourne, Australia