CARROTS AND STICKS – PROMOTING ... - Global Reporting Initiative

86 Carrots and Sticks - Promoting Transparency and Sustainability
Recommendations to government
officials, politicians and other
stakeholders with an interest in
regulation
Institutional and legislative
fragmentation
The art of government is knowing
how, where, and when to intervene,
using its full range of tools from
regulation (both ‘hard’ and ‘soft’
laws) through subsidies to the use of
‘soft power’ (Hohnen, 2007). Finding
the right mix of policies to promote
sustainability reporting and ultimately
the transparency and accountability
of organisations is seen as one of
the key challenges. This requires
careful analysis of existing policies
and considering ways of promoting
harmonisation of approaches to
ensure that new expectations of an
evolving agenda are met.
A UNEP Workshop on sustainability
reporting in 2005 came to the
conclusion that “in most countries,
reporting requirements on various/
specific issues are still dispersed
throughout national legislation. A first
challenge for governments is simply
to take stock of current reporting
requirements for companies, laying
the ground for improved integration
and development of comprehensive
sustainability reporting legislation.” 31
This statement is still valid in 2010.
A key characteristic of sustainability
reporting standards is that they are
still dispersed in different sectoral
laws under different institutional
entities. This reflects historical
approaches in dealing with societal
problems, which in the environmental
field often involved introducing
disclosure requirements focussed on
individual resources, media and point
sources of pollution. In a context of
more complex supply and demand
relations and a globalised world
economy today, these approaches
need to be complemented by more
effective and integrated approaches.”
It is therefore proposed that
governments considering the
introduction of new public policies on
31 http://www.unepie.org/scp/gri/pdf/SectorMeet.pdf (last visited
8 February 2010).
reporting should, among other things,
take into consideration the following:
� Existing legislative framework:
Analysis of any policies or action
plans across sectors. Analysis
of legislation across sectors
(e.g. company, environment,
accounting legislation).
� Existing institutional framework:
Review of institutional mandates.
Analysis of competent authorities
and ministries involved in
financial and sustainability
reporting. How is communication
between institutions organised?
Is a coordination mechanism or
procedure in place?
� Identification of the main nonstate
actors in the field of
sustainability reporting, and
relevant actors such as rating
agencies and investment
analysts active at the interface
of financial and sustainability
reporting.
� Cooperation with national stock
exchanges (e.g. minimum set of
ESG disclosure requirements for
listed companies).
� Increased interdependency
between actors and countries
beyond the nation-state and
its borders, an aspect of
globalisation that requires
coordinated regulatory
approaches among countries.
� Analysis of relevant international
reporting standards, codes
and guidelines, accompanied
by a comparison of existing
internationally accepted
guidelines/standards and national
frameworks.
� Promotion of coherence and
convergence at the international
level when contributing to
the elaboration/revision of
international standards. When
approaching international
standards, consider their
credibility and voluntary nature,
mindful of the supremacy (and
therefore responsibility) of
national laws and regulations.
� Take into consideration the
international standards when
acting at the national level,
meeting local needs whilst
considering internationally
recognised expectations
and avoiding unnecessary
proliferation of standards. There
is a growing international interest
in methods and approaches
that enable comparison across
countries and enable markets to
function in a more sustainable
manner.
Annex 1 provides a list of eight basic
sets of questions a governmental
official new to this terrain needs to
ask. The listing is not exhaustive,
but provides an indication of key
considerations at stake when
approaching the subject. It has been
created with governmental authorities
in mind that are approaching the
topic comprehensively for the
first time. We trust that this will
help identify support that may be
required in deciding where to start
when evaluating the local reporting
landscape and the status nationally
compared to developments abroad.