With America Behind in CSR Reporting, GRI Opens Wall Street Office
The Global Reporting Initiative’s (GRI) relevance has surged the past few years. The Amsterdam-based organization’s guidelines for corporate social responsibility (CSR) reporting has become the standard. In fact, Triple Pundit believes its leadership makes it the new LEED. While companies around the globe have embraced CSR reports as a way to demonstrate transparency and articulate their effects on environmental, social, and corporate governance issues, American companies generally lag behind. GRI estimates that 45% of the companies that use its reporting framework are from Europe. But with American companies only 12% of the organizations that have adopted GRI guidelines, the organization crossed the pond and set up shop in Lower Manhattan, the capital of American finance and commerce. Its office has been open since October, but GRI officially launched its “Focal Point” Monday morning at the corner of Broad and Wall. GRI’s timing is perfect. Economic indicators point to a recovery, the stock market has rebounded, and corporate profits are at an all time high. But the Deepwater Horizon fiasco was less than a year ago, energy prices could spike at any time, and the country is stewing in an anti-regulation mood evidenced by the recent power shift in Congress. Nevertheless, as Michelle Greene, a New York Stock Exchange vice president and the NYSE’s head of corporate responsibility said in her opening statement:
We are at a tipping point. Companies that do not issue CSR reports will have to explain why they do not.Several CSR advocates and leaders spoke at GRI’s opening and explained their journey, why they pursue a strong corporate responsibility agenda, and the benefits of using a consistent framework like that of GRI‘s. While many companies’ CSR efforts focus on their environmental impacts and how they address those issues, CSR is also about people and transparency. Hence the most compelling story came from a company that has been in business over 120 years. Susan Arnot Heaney is the director of corporate responsibility at Avon Products. The Avon Lady that we remember from our childhood has now gone global, and operates in 120 countries. As Heaney explained, Brazil alone has 1 million reps (more than enlisted in Brazil’s armed forces) that sell Avon products. GRI gives Avon a framework to maintain and grow stakeholder engagement with the 6.2 million people who are part of Avon’s global sales network. Not only are Avon’s reps surveyed about their challenges and conditions in which they work, but they can even dive into Avon’s CSR portal and develop a customized CSR report that they can then distribute to their clients. CSR still has an uphill climb for wider acceptance in the USA. Institutional investors still remain unconvinced. Environmental, social, and governance issues are difficult to quantify, which creates difficulty in communicating with the American business community. C-level executives may speak English, but their preferred language is numbers that they can easily crunch. Furthermore, resistance of CSR is not always cultural, but actually structural: American business law ensconces businesses to operate in a mindset that focuses on the bottom line, allows hostile takeovers of public companies, and maximizes returns to their shareholders. As any international business maven call tell you, however, evangelizing, cajoling, and presenting the perfect business case cannot just be done by Skype, email, Twitter, and conference calls. Face time can make a difference, so GRI’s office in New York is a strong, positive step towards increasing CSR awareness in the USA.