The United Nations Conference on Sustainable Development (UNCSD) took place in Rio, Brazil, in June 2012. It was held 20 years after the Rio-hosted United Nations Conference on Environment and Development, the UNCSD is better known as Rio+20. Governmental and non-governmental representatives met in one of the largest-ever sustainability summits, to attempt to set out a roadmap for a green global economy and sustainable global development.
This paper provides some background to Rio+20 and the 'zero draft' of the summit agreement, explains the importance of paragraph 24 - concerning the integration of sustainability information into corporate reports - of the zero draft, the possible changes to paragraph 24 from zero draft to final agreement, and ACCA and others' opinions on paragraph 24.
ACCA believes that:
- the development of a framework for integrating sustainability information into corporate reporting would be a key reform for bringing corporate reports into the 21st century
- an effective paragraph 24, by calling for a global framework for the integration of material sustainability information into the corporate reports of listed and large public companies, would emphasise the relevance of sustainability to investors and businesses and spread good practice worldwide
- long-term value is enhanced by companies embedding sustainability into their business strategy and key processes rather than by treating it as an add-on activity; the long-term viability of a company has to be at the heart of corporate decision making
- integrating sustainability information into corporate reports will increase the accountability and transparency of corporate disclosure - both factors that are beneficial for economic and social development
- paragraph 24 should lead to a commitment by UN member states to develop mechanisms for sustainability reporting at a national level; while such national reporting would need to meet global standards, flexibility in the tools applied to meet the standards would allow for country-specific solutions
- paragraph 24 should obligate companies to report on a 'comply-or-explain' basis; this requirement would provide appropriate flexibility and would stimulate substantive board discussions on risks and opportunities arising from sustainable development
- the implementation of the final agreement of Rio+20 will be the summit's greatest challenge; previous summits or attempts at global frameworks have produced ambitious goals, but have failed at the implementation stage
Finally, the paper concludes that while Rio+20 may have more limited ambitions than the 1992 summit, this might help to make goals be more achievable. An effective paragraph 24 would set out precisely the type of well-defined goal for which Rio+20 as a whole should be aiming and would bring real benefit for companies, investors, and the planet itself.