There are standard measurements that explain a company’s financial performance. Now, a new system, sponsored in part by the United Nations, will standardize the reporting of such non-financial information as pollution emissions and labor practices. Cynthia Graber reports.
ROSS: Welcome to Living on Earth. I'm Pippin Ross, sitting in for Steve Curwood. Multinational corporations have been in the spotlight in recent years. Clothing and shoemakers have been charged with doing business with sweatshops. And oil companies accused of human rights and environmental abuses. Some firms have tried to demonstrate their corporate responsibility by publishing reports detailing their social and ecological good deeds. But, there's been no standard for this reporting-until now. Living on Earth's Cynthia Graber explains.
PITYANA: There is now no great debate about the ethical duties that attach to trade and business.
GRABER: Nyameko Barney Pityana is chair of the Commission of South African Human Rights. He recently addressed a United Nations meeting of more than 250 business, finance and NGO representatives. The event: the official launch of the Global Reporting Initiative, a new set of guidelines to help quantify a company's level of social responsibility.
PITYANA: We now understand that the reckless exploitation of the natural resources, is neither political nor morally acceptable. More importantly there is now a body of opinion which affirms that such activities, ultimately, do not make business sense.
GRABER: This project was born of a partnership between the United Nations and the nonprofit group, the Coalition for Environmentally Responsible Economies, or CERES. The effort is touted as a standard guide for companies to use when reporting data not included in financial reports--things like energy use, pollution emissions, and compliance with international human rights standards. Robert Massie, director of CERES, says companies have become increasingly aware that their end product isn't the only thing of concern to customers and investors. For instance, the state of California now restricts its pension system from investing in countries with weak human rights records. And it's not the only one.
MASSIE: You have the city of New York pension system, a huge system, which has now and is increasingly involved in advocating that companies take steps to address climate change, and address other issues because they're concerned about the long term values.
GRABER: The report asks companies to detail such things as the amount of carbon dioxide emitted annually. Companies can list efforts to improve energy efficiency. And, there are questions about wage and labor standards. Participation in the Global Reporting Initiative is voluntary. But if a company chooses not to answer any particular question, it must explain why. The initiative is the result of input from hundreds of organizations, including activist groups like Greenpeace, financial organizations such as PriceWaterhouseCoopers, and companies such as Ford, Dow Chemical, and Nike.
EITEL: We, as a company, have learned a lot on these issues because we've been at the center of a lot of the criticism.
GRABER: Maria Eitel is vice president of Corporate Responsibility at Nike, a company that came under fire in recent years for working with overseas sweatshops. Nike admits past wrongdoing but sees its participation in the initiative as a way to demonstrate improvements.
EITEL: We have engaged in a very extensive and in-depth program to improve our labor practices and the work we do around environmental sustainability. So, the more transparency we have, the more open we are as a company, the more consumers can make their own decision.
GRABER: One thing to remember, though: this report passes no judgement on the data collected. Again, CERES director Robert Massie.
MASSIE: The sense of whether this is appropriate behavior or inappropriate behavior will be decided outside in the full-fledged sort of marketplace of debate. But it will be based on common definitions and core indicators that give you comparable information.
GRABER: But not everyone thinks the Global Reporting Initiative is an unqualified success--yet. Oxfam International, a humanitarian organization, is supporting the initiative, but it wants the process to include a way to verify a company's self-reported information. Jeremy Hobbs, Oxfam's executive director, stressed this in a speech at the lunch.
HOBBS: Whilst we have voluntary codes, we also believe that verification is a major issue which needs more work. It's fine to have voluntary codes, but if we can't see whether they're actually making a difference, then they're not terribly helpful.
GRABER: Committees are currently working out the details of how to verify a company's data. Organizers of the Global Reporting Initiative say this system is part of an ongoing process. Right now, the second draft of the guidelines is on the web for public comment and will be released in July. In addition to verification procedures, participants are also wrestling with the question of company borders. With corporations connected to so many operations around the world, how do you define where one company's responsibility ends and another's begins? For Living on Earth, I'm Cynthia Graber.
[MUSIC: Steve Roden "cycle (re-)" IN BETWEEN NOISE (Inverted Tree Projects-1993)]
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