University of Vaasa - Vaasan yliopisto

detailed information and descriptions on corporate sustainability practices. Reports
may be long and contain detailed qualitative information supported by some data.
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After gaining experience of reporting, companies usually start using the GRI-based
sustainability data also for business performance management purposes. We call this
as the second phase (Table 1 below). In phase 2, a company starts more effectively
utilize GRI-based data also for management purposes. It is necessary that corporate
data collection procedures can provide complete and accurate information for
company or group-wide consolidation. Phase 2 implementation calls for
sophisticated data collection, consolidation, and management systems. Reporting will
occur several times per year. Typically external assurance for ensuring data
credibility is applied. In phase 2, a company also develops internal reporting
processes and uses site level data for benchmarking. In order to establish company or
Group-wide quantitative sustainability targets, company needs phase 2 level
implementation. This more precise target setting and integration into a firm’s
strategy is in line with Porter & Kramer (2006).
The third logical step (third phase) would be to transfer the sustainability data also
into measures for financial valuation purposes (Table 1 below).
For the third phase we propose a more systematic implementation of GRI in order to
provide information for financial valuation. That requires stronger integration than
phases 1 and 2 provide. Corporate responsibility reporting in phase 3 is integrated
into corporate financial reporting processes and often into financial accounting and
business performance measurement systems as well. Indicators of phase 3 level
practice would be integration into the financial reporting cycle, the analysis of
financial drivers behind sustainability performance data and clear metrics in terms of
the financial impact of sustainability. In practice this would include identifying most
relevant sustainability indicators, translating these indicators into financial valuation.
Figures should show added value of corporate responsibility in financial terms,
including impacts on profit and loss statement, balance sheet and overall corporate
valuation (Yachnin et al., 2006).