1. Facing the Inevitable—
Integrated Financial-Sustainability Reporting for Business
(PAN3167)
By William R. Blackburn
Association for the Advancement of
Sustainability in Higher Education
AASHE 2010 Conference
October 11, 2010
Denver, CO

2. Growing Global Multistakeholder Consensus on SR/Sustainability Scope
ISO Social Responsibility Core Subjects
GRI Sustainability Indicator Categories/Aspects
Organizational Governance
Governance
Human Rights
Labour Practices
Labor Practices & Decent Work
The Environment
Environment
Fair Operating Practices
Society: Corruption, Public Policy, Anti-competitive Behavior, etc.
Consumer Issues
Product Responsibility
Community Involvement & Development
Society: Community
Economic: Economic Performance, Market Performance, etc.
Governance (oversight structures for legal and ethical compliance and risk control)
Human Rights (civil rights, nondiscrimination, etc.)
Labor Practices (wages, working conditions, etc.)
Environmental Issues (pollution, energy and resource conservation, biodiversity, etc.)
Fair Operating Practices (anti-corruption, fair competition, etc.)
Consumer Issues (fair marketing, consumer safety, etc.)
Community Involvement & Development
Economic Viability of the Organization

3. General Definition of Sustainability “The 2 Rs”
Values-driven management based on---
Respect: for people and other living things
Resources: the wise use of economic and natural resources
—for the purpose of sustaining and promoting the long-term well-being of the organization and society (including the environment).

4. Growing Global Multistakeholder Consensus on SR/Sustainability Reporting Principles
ISO SR Information Characteristics
GRI Reporting Principles (with Tests)
Complete
Completeness
Accurate
Accuracy
Balanced (Transparent)
Balance (Transparency)
Timely
Timeliness
Understandable
Clarity
Responsiveness
Stakeholder Inclusiveness
Accessible
Comparability
Sustainability Context

5. The Evolution of SR/Sustainability Reporting
Environmental (CERES Reports)
Environmental + health & safety (EHS)
EHS + social + partial economic (GRI “Sustainability”)
EHS +social + complete economic (“Integrated” sustainability + financial)

6. Some Integrated Reporting Companies
Novozymes-first in 2002
Novo Nordisk in 2003

7. The Evolution of SR/Sustainability Reporting
More reporters (3000+; GRI=1000+)
Broader audience and scope; more global reports
Greater length; more coverage of value chain
More innovative use of web (XBRL, custom reports, etc.), social media (Twitter, Facebook, etc.)
More prioritizing based on materiality (significance), with stakeholder engagement (GRI, ISO 26000, AA 1000)
More mandatory reporting (France, UK, Sweden, Denmark, South Africa; SEC guidance on climate change, board diversity)
XBRL like HTML—Extensible Business Reporting Language (w.tags)
King III June 2010

8. What’s Driving Integrated Reporting?
Failure of traditional financial reporting to identify risk
Linkage among financial, social and environmental performance (e.g., BP)
Sustainability as a strategy/governance model rather than collection of practices
Competition for the attention by and resources from top management by social/environmental activists (e.g., SEC guidance on reporting climate change risk)
Efficiency

9. Some Issues with Integrated Reporting
Integrated reporting standards (IIRC); metrics vs narrative
Assurance process/ standards, expertise, cost
Transparency
Addressing enterprise risk management (ERM)
Defining audiences and addressing their information needs for decisionmaking
Ecosystem cost accounting, valuation
Narrative reporting
MDA
GRI collaborating with the Prince of Wales Accounting for Sustainability Project and the International Federation of Accountants (IFAC) to form the International Integrated Reporting Committee for this purpose.

10. The Sustainability Handbook—
The Complete Management Guide
to Achieving Social, Economic and
Environmental Responsibility
(See )