Business leaders called on their peers worldwide to adopt new guidelines launched Thursday for documenting "sustainability" alongside their profit and loss accounting.
Sustainability, once derided in the corporate sphere as an amorphous term coined by the environmentalist movement, is gaining acceptance in boardrooms. Many companies draw up a sustainability report _ also known as a social report _ examining how employees, customers, and even non-customers may be affected by their business in the long term.
The new Global Reporting Initiative guidelines "are technically strong and trusted," said Mark Moody Stuart, the chairman of mining corporation Anglo American PLC _ and a member of the GRI's board. "The time has now come for all businesses to use the (new GRI) guidelines."
The full guidelines were released at a conference in Amsterdam, where the Global Reporting Initiative's secretariat is based.
The GRI has no power to enforce its standards, but more than 900 organizations including Microsoft Corp., Nike Inc. and Brazilian state oil company Petrobras are using them. More than 2,000 companies and governments, including the United Nations, were involved in planning the new ones, making them the "de facto standard," the organization's Chief Executive Ernst Ligteringen said.
He said all big corporations were now aware of the guidelines, even those who don't use them, and they should cooperate in developing and adopting them.
"Together we work at what is a sensible manner to report on these matters. Just saying you're ethical is not enough anymore: you have to start measuring," he said.
Ligteringen said that without standardized reporting rules, there is no way to know if companies do what they say. Enron's management famously proclaimed that "all business dealings with Enron will be open and fair," and the company's core values were "respect, integrity, communication and excellence."
The new guidelines are explicit on what companies must take into consideration when they measure things like carbon dioxide emissions, the amounts and types of waste they create, and their safety and employment policies.
The complexity of reporting depends on a company's number of employees, and a report is awarded a "plus" if the company allows an external audit.
Of course, a company could have a dismal environmental and social record and still have an "A+" rating under the system, as long as it was carefully measured and disclosed.
But the central idea behind voluntary guidelines is that the act of disclosure forces companies to consider their shortcomings.
"We always have been an ethical company," said Sandrijn Weites, who oversees sustainability reporting at Dutch bank ABN Amro Holding NV.
But he said the company became aware of a lack of women in management positions after it began using the GRI guidelines three years ago _ something of a surprise for a company based in the egalitarian Netherlands.
He said that companies who use the guidelines are longing to show off their accomplishments and "would welcome" a move by governments to make them law.
Sustainability reporting "should be at the same level of precision as financial reporting, that should be the end aim," he said.
Sustainability reporting is winning some surprising converts. R.J. Reynolds Tobacco Co. published a social responsibility report in 2006 using the GRI guidelines.
"There are risks and costs to a program of engagement ... but they are far less than the long-range costs of comfortable non-engagement," the company said.
R.J. Reynolds may be no better or worse a corporate citizen than Altria Group Inc., owner of Philip Morris, but it's easier to chart R.J. Reynolds' waste and greenhouse gas emissions: They're right there, starting on page 40 of the report.
The conference continues Friday, when former U.S. Vice President Al Gore will address delegates.
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