While the Rio statement falls short of what was hoped for, there is now a momentum to increase sustainability disclosures which must be maintained, with investors and companies now having a critical role to play in driving and demanding greater transparency and with governments needing to set new, tougher reporting standards.
ACCA's policy paper Making a Difference at Rio+20 called on the summit to oblige public and large global private corporations to integrate material of environmental, social and governance issues in their Annual Report and Accounts, or to explain why they could not report the information. It also wanted Rio+20 to 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 mechanisms applied to meet the standards would allow for country-specific solutions. ACCA therefore welcomes paragraph 47 in the final announcement from the summit, which states:
'We acknowledge the importance of corporate sustainability reporting and encourage companies, where appropriate, especially publicly listed and large companies, to consider integrating sustainability information into their reporting cycle. We encourage industry, interested governments as well as relevant stakeholders with the support of the UN system, as appropriate, to develop models for best practice and facilitate action for the integration of sustainability reporting, taking into account the experiences of already existing frameworks, and paying particular attention to the needs of developing countries, including for capacity building.'
ACCA is part of the The Aviva Coalition, led by Aviva Investors and including organisations such as Stakeholder Forum, Benchmark Environmental Consulting, GRI, Hermes, ACCA, A4S, Christian Aid, WWF-UK, Save the Children, Responsible Research, Travers Smith, Corporate Knights, UNCTAD, UNEP, PRI, Credit Agricole Cheuvreux, HBS, EIRIS, Domini, the IIRC and CDP has been working for more than a year on lobbying governments and businesses on the need for integrated sustainability reporting.
Rachel Jackson, head of sustainability at ACCA, said: 'While the announcement does not go as far as ACCA would have liked, we are encouraged that Rio +20 has endorsed the need for big business to integrate sustainability into their reporting cycles. It is critical that businesses develop initiatives to create greater transparency in material sustainability issues, and investors to demand greater disclosure and ACCA will be working to raise awareness of the Rio+20 announcement. We will also be calling for governments to increase their demands and develop tougher corporate reporting standards.
'We believe it is critical that businesses embed material sustainability impacts and risks into their business strategy and key processes since the long term viability of companies has to be at the heart of corporate decision making,' said Rachel Jackson.
'As an example of governments making a start to develop greater demands for ESG disclosures, we welcome Deputy Prime Minister Nick Clegg’s announcement which will make it mandatory for companies listed on the London Stock Exchange to report on their greenhouse gas emissions. ACCA has been supportive of this measure for many years both through the work it does and through its involvement and membership of CDSB and The Aldersgate Group. We hope this gives the lead to other governments. It is vital for businesses to become more energy efficient, helped by embracing new technologies, and reduce their significant contribution to climate change' said Rachel Jackson.
ACCA and Aviva Investors co-sponsored a session ahead of the summit at which ACCA vice president Martin Turner spoke on the importance of distinct and credible reporting of environmental, social and governance disclosures and at which he said that sustainability reporting needs global buy-in, with the aim of achieving a reporting framework which provides meaningful information to users everywhere and is also flexible enough to accommodate substantial differences in cultural and legal practices which may exist in different countries.
Along with Martin Turner, representatives from Aviva Investors, the Istanbul Stock Exchange, CERES and Banco de Brasil DTVM were on the panel, with James Gifford, executive director of Principles for Responsible Investment as the moderator.