A study by the Social Investment Research Analysts Network (SIRAN) finds that an increasing number of the largest public companies in the U.S. are reporting on their environmental and social performance. Key findings include:

• Nearly 80% of the companies comprising the S&P 100 Index have special sections of their websites dedicated to sharing information about their social and environmental policies and performance. This is up from about 60% in the prior year.

• Over 40% of S&P 100 Index companies issue annual corporate social responsibility (CSR) reports. A dozen (12) companies became reporters in the past year, while 8 moved to web-based reporting only.

• A third of S&P 100 Index companies base their CSR reports on the Global Reporting Initiatives (GRI) Sustainability Reporting Guidelines.

A summary of the findings can be found at www.siran.org/csr.php.

The International Organization for Standardization (ISO) is developing an international standard on social responsibility (ISO 26000). The voluntary standard will augment existing public and private initiatives and help organizations address their social responsibilities by: 

• Developing an international consensus on what SR means and the SR issues that organizations need to address,
• Providing guidelines on translating principles into effective actions, and
• Distilling the best practice that has already evolved and disseminating it worldwide for the good of the international community.

ISO and the United Nations Global Compact have signed a memorandum of understanding to cooperate on the development of ISO 26000. The reputation and credibility of ISO could encourage organizations to embrace social responsibility and incorporate it in core business strategies. ISO 26000 is currently targeted for publication in late 2008.

The manner in which companies report their performance is getting a makeover. Don’t worry, the familiar financial reporting – balance sheets, income statements, footnotes, et al. – is still there. Increasingly, companies are supplementing their financial reports with non-financial information. It’s commonly referred to as “Triple Bottom Line” reporting because it encompasses economic, social and environmental performance. Triple Bottom Line is not new, but it seems to be picking up steam as companies respond to the pressure from all stakeholders to be more transparent and to provide a broader picture of their performance. The SEC, the AICPA, and various consortiums are actively involved in setting the standards for this new generation of business reporting.

The Global Reporting Initiative (GRI)

The GRI (www.globalreporting.org) released a new version of its Sustainability Reporting Guidelines at a global conference in Amsterdam this past October. Former Vice President Al Gore was among the international panel of speakers. The revised guidelines, known as G3, are the third version of the guidelines GRI first released in 1999. GRI is an independent non-profit organization whose mission is to make reporting on economic, environmental and social performance a generally accepted practice for all business. Also known as “Triple Bottom Line” reporting, the goal is to measure, report and establish accountability for an organization’s performance in these areas.

The GRI guidelines are widely accepted as the definitive framework for sustainability reporting. Following guidelines such as GRI is voluntary. Many companies adapt the GRI framework to meet their needs for social and sustainability reporting. According to GRI, nearly 1,000 companies worldwide report using the GRI Sustainability Reporting Guidelines. Notable corporate members of GRI include: Baxter International, Inc., Ford Motor Company, General Motors Corporation, McDonald’s Corporation, Microsoft Corporation, Nike Inc. and Office Depot.

Enhanced Business Reporting (EBR)

The objective of the Enhanced Business Reporting Consortium (www.ebr360.org/) is to build a common framework for relevant, transparent and comparable reporting by companies. EBR would better reflect a company’s value by including key non-financial information on such factors as strategy, brands, product innovation, risks and sustainability. The EBR framework makes it possible to create useful classifications, or taxonomies, for value drivers, non-financial performance measures and qualitative information. In particular, these classifications would be useful for incorporation into XBRL. The American Institute of Certified Public Accountants (AICPA) is lending its support to the EBR initiative.

XBRL (Extensible Business Reporting Language)

XBRL is being developed to be the de facto standard for exchanging financial information. XBRL is a so called Markup Language that “tags” data with standardized descriptions enabling the data to be uniformly exchanged between computer systems and software applications. One benefit of XBRL is to eliminate the inefficiencies and inaccuracies of re-entering financial information from one source to another. Certainly, analysts on Wall Street would benefit from XBRL so it’s no surprise that the SEC is pushing adoption of XBRL for all public companies and has committed $5.5 million to complete the development of XBRL taxonomies. XBRL US, Inc. (www.xbrl.org/us) is leading this initiative in the United States. The GRI has announced that it is developing a XBRL taxonomy for non-financial performance data. Also, the AICPA has been actively involved in the development of XBRL.