Socially Responsible Business and Corporate Reporting
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Last thursday, 23 February, the Global Reporting Initiative (GRI) and the Croatian Business Council for Sustainable Development organized, under the “Croatian Responsible Business Agenda 2006” initiative, a presentation of GRI guidelines reporting on socially responsible business and their translation into Croatian.
The guidelines refer to corporate non-financial reporting on sustainable development through three balance sheets: balance sheet on economic effects of operations, demonstrating the way in which an enterprise generates wealth; balance on environmental effect that demonstrates whether an enterprise bases its operations on the principle of environmental efficiency and manages the impact of its products on the environment; and, balance on social effects of operations, which provides information on social investments of an enterprise, its inclussion in the life of the community, issues of human and labour rights. The guidelines aim to raise the standard of reporting on sustainability and equate it with financial reporting in terms of importance. The guidelines have been adopted by a great number of globally successful companies and it seems that the guidelines have become the global standard for this type of reporting. The Global Reporting Initiative is an international non-profit organization, established in 1997 by the Coalition of Environmentally Aware Economies (CERES) and the United Nations Environment Program (UNEP), with the goal to achieve excellence in corporate reporting on sustainable development. Pull Stubbs and Domagoj Racic from Zagreb Economic Institute participated in the presentation and discussed the relevance of GRI framework for corporate reporting; Marina Skrabalo from MAP Councelling company, who presented the project for translation of GRI framework and guidelines in Croatian language; representatives of several of the most important Croatian companies (INA, Pliva, Zagrebacka Banka, Podravka, Coca Cola Beverages Croatia), who presented their own experiences in reporting in accordance with the guidelines; and, Damir Dragicevic, Official Representative of GRI who presented the work on the third generation guidelines (GRI3). Racic provided brief presentation of the Croatian context. The trust in the business sector in Croatia is at a very low level. On the other hand, the competitivity of the sector remains low, which makes the idea that a company may succeed because of its responsible practices is, at best, obscure. Therefore, according to Racic, the benefits of this type of socially responsible reporting are primarily long-term based. According to Damir Dragicevic, the times when the business organizations focues on only two types of stakeholders – investors and consumers – are behind us. Today, each organization involves a great number of stakeholders, and there is two-way relationships with all of them. That makes the corporate effects on the environment rather complex and values change so that the emphasis is increasingly placed on the intangible, immaterial values such as reputation, quality and trust. The reporting on sustainable development in line with GRI guidelines is one way for the companies to communicate those values to their stakeholders, believes Dragicevic. Although GRI empose on the companies some higher standards and creat pressure for greater sense of responsibility, their acceptance is based primarily on the need to improve and maintain good reputation. Therefore, the fact that a rising number of companies prepare their reports in accordance with GRI guidelines should be, at best, very cautiosly greeted. First of all, it would be good to ask whether good reputation is enough of a reason to report on the negative effects of a company’s actions. Or, to be more precise, will Coca Cola Beverages Croatia include in its next report the estimated consequences of the company’s opposition to implementation of the Regulation on Packaging Waste or the threats that it will reconsider its furhter existence in Croatia if the workers don’t give up on their demands for higher salaries and severance payments? However, even if we accept the social responsibility of the great business organizations at face value, as completely honest, the question is whether it should be left to their own judgment, or the “invisible hand” of the market place to decide on its implementation. Namely, the mopst important industries, food, oil, telecommunications, pharmaceuticals, are dominated by monopolies and oligopolies – huge powerful companies that are capable to empose their will and their own terms on which the wellbeing of the whole society may depend (employment, pricing policies, investments, pollution,...) It means, on one hand, that we can’t really talk about free market today, but also that such companies, unless they are held accountable by the public and are subjected to some form of public scrutiny, may present a danger to society. |
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