By Tina LY.
For decades, we know our deadline: 2050… Since then, the human population and actions
towards climate change started to increase all over the world, at different
pace though. Our main challenge is “[to meet]
the needs of the present without compromising the ability of future generations
to meet their own needs” (The Brundtland Report, 1987) and thus,
harmonize human activities with the essentials of coming generations. Since the
introduction of sustainable development concept, sustainability has become a
goal for the United Nations, World Bank, NGO’s and more and more corporations.
Since 2000, more and more organizations in the world are committing themselves
to the United Nations Global Compact (UNGC); today, they count for more than 8,000 participants. The UNGC initiative
urges organizations to implement sustainable policies and communicate them: in
other words, the UNGC promotes transparency and disclosure.
Trend in Turkey is
encouraging
For the last 10 years in Turkey we can see an increasing
trend in sustainability report publication. Most of the organizations that
issue such reports are major groups that are listed in İMKB; for example, Koç
Holding, Akçansa, Eczacıbaşı, OPET, TSKB, Turkcell etc. Besides, more and more
organizations are signing the UNGC. Now the number of Turkish organizations is 223,
which is a quite positive point, but still a low number compare to EU: 4002 and
the USA: 470. Regarding the 7 other largest emerging economies, China: 298, Brazil:
472, Russia: 57, India: 283, Mexico 324, South Korea 221 and Indonesia 99,
Turkey is the 5th most participative country. (Source: unglobalcompact.org,
05.08.2012)
Like any report, standards exist to guide organization in
the data and information to gather and disclose. However, those standards are
not mandatory; they aim to help an organization to make sure that the content
of their report is in line with what their stakeholders are expecting, and being
transparent enough. Most of the sustainability reports published by Turkish
organizations are following the Global Reporting Initiative (GRI) guidelines,
the most used worldwide. Standards can also be considered as a reference to
compare performance from one report to another and thus observe progress.
The Evolution of
corporate sustainability practices
study (2010), has shown that the top 3 drivers that encourage companies in
their sustainability efforts are compliance with laws and regulations, managing
reputation risk, and competitive advantage in the long-term. Once initiatives
are implemented, organizations are expected to report them. (Source: cica.ca) Based
on Reporting Change study, a survey commissioned by GRI in 2010, readers of
those reports are considering them as a tool for organizations to: account for their
sustainability performance and activities (73%), improve internal processes to
enhance performance (78%), engage with stakeholders about sustainability
performance (40%). (Source: futerra.co.uk).
Indeed, organizations are expected to show
that what they commit themselves into has been implemented. Like an annual or a
financial report, organizations should consider sustainability reports as a
real tool to communicate and present all their efforts regarding sustainable
aspects to their stakeholders. Beyond financial expectations, their commitments
to Environment, Social and corporate Governance (ESG) need to be accounted for.
Upcoming of the ISESI
With the
release of the “Istanbul Stock Exchange Sustainability Index (ISESI)” in the
coming months, Turkish companies will be more and more obliged to take action
in their commitment to sustainable policies. Indeed, ISESI will enable Turkish
and international investors “to compare their sustainability performance on a local
and global level.” Therefore, companies will be competing not only on financial
facts but also based on sustainability indicators. Investors may also use ISESI
as a tool for responsible investments, “to select and invest in companies that
adopt principles of sustainability and corporate governance”. (Source: ise.org,
05.08.2012).
Importance of communication
Communication is the best tool for any organization and
individual to show what they have created, produced and implemented. Besides,
as a participant to the UNGC, transparency and disclosure are the watchwords of
their commitment. To not disclose or communicate on the initiatives, will cause
the delisting of the organization from the UNGC participants. Until today, more
than 3700 organizations have been delisted. Since 2006, 117 Turkish
organizations have been expelled from UNGC list. (Source: unglobalcompact.org,
05.08.2012).
Furthermore, responsible
investments are now more important. For example, Delta Lloyd Asset Management has
excluded about 40 companies if it violates the 10 principles of the UNGC
repeatedly or seriously. The list has been published and the excluded companies
are including major corporations known to society.
Scandals related to sustainability issues are more present
in the news and fast unprepared communication is a risk for organizations. Trust
is the key word of our century. Past has showed us events like oil leaks or
asbestos that taught us lessons. Besides in these time of economic crisis,
consumers, investors, that is to say all stakeholders are more willing to trust
organizations if they are able to prove them they can do so. Data, and
self-performance comparison from year to year shows organizations’ capability
to see how they are capable of objectively assess themselves; and how they are able
to recognize their weaknesses, their risks but at the same time taking actions to
mitigate and reduce their impacts.
Communication through
sustainability reports can then be consider as an instrument to build trust and/or
rebuild trust for organizations.
According to SustainAbility
in the Reporting Change study, “many
companies realize that the internal benefits are at least as great as the
external impact. Internal benefits include: raising awareness (from the Executive
Board or the factory floor) on issues and processes not traditionally captured
by conventional financial management; providing tools for internal
accountability and performance improvement; helping the company to focus its
efforts and management on the issues that really matter to its business”. (Source:
futerra.co.uk).
Based on the same study, reading an organization’s
sustainability report affected readers’ attitudes and actions in the long term in
these ways: increase awareness about sustainability issues within a certain
sector (65%), increase commitment and connection to that organization (60%),
change views about the importance of sustainability issues (53%), change behavior
as a consumer, increasing/decreasing sustainable behavior (40%), change idea of
corporate performance (38%). (Source: futerra.co.uk).
Following these facts, we can say that regulations are not
the only way that will bring people to change habits, but organizations are
playing a crucial role. To have an impact and influence people, awareness needs
to be increased. Since the 1960’s people became massive consumers and believe
in brands; most of us even relate to some of them. Through the survey we can
see that sustainability reports affects the readers in a positive way: they
help them to change behavior; organizations are like prescriber of change.
Turkey, as a major emerging economy should continue on the path of publishing
sustainability reports, especially for the following reasons: continuous
population growth, young population that is inclined to change easily, economic
boom, increase of urbanization, and above all, as a model for the region.
Communication is essential, but be careful to not deceive
your stakeholders by “greenwashing”.
Communication benefits?
There are many ways to prove a company that communication on
sustainability issues brings benefits. Accountability. Transparency. Trust. The
most tangible ways are awards you may receive, through different bodies. There
are awards for the initiatives taken and good communication campaign such as: Environment
and Energy Award Winners, International Green Awards, Financial Times
Sustainability Finance Awards etc.
No comments:
Post a Comment