GRI and the camouflaging of corporate unsustainability
Under the traditional businesses approach, ecological and social issues are ignored in management objectives because they are not visible or do not have a significant financial impact. After the Brundtland Report in 1987, sustainable development (SD) was a concept implemented by corporations and business organizations (e.g. CERES). Although some companies are considering embracing SD or sustainability1 at a strategic level, as they see clear synergies between value creation and attempts to contribute to SD, the evidence also points to a different reality where this issue “may be marginalized or moved off to agendas unrelated to the firms’ core business” (Dunphy, Griffiths, & Benn, 2003, p. 111).
Social and environmental accounting and reporting (SEAR) has been a relevant subject in the academic literature (Gray, Owen, & Adams, 1996). The Triple Bottom Line notion derived from the definition of the sustainable development in the Brundtland Report, has added economic development to SEAR (Elkington, 1999). Under this approach, known as Triple Bottom Line Reporting, the Global Reporting Initiative (GRI) sustainability reporting guidelines were first developed with the aim of assisting “reporting organisations and their stakeholders in articulating and understanding contributions of the reporting organisation to sustainable development” (GRI, 2002, introduction).
Preliminary evidence from practice seems to show that these guidelines are used in a biased way. Some organizations that label themselves as GRI reporters do not behave in a responsible way with respect to social equity (for example, health care companies in South Africa) or human rights (for example, some oil companies in developing countries).2
The evidence could be explained as a wrong interpretation (conscious or unconscious) of the concept of SD, or it could be argued that something is failing when transmitting the idea of sustainability from the guidelines. The concept of SD is reduced to simply giving basic information on the indicators that comprise the Triple Bottom Line (TBL), which unfailingly leads to a gap between corporate performance and corporate impacts. Thus, GRI guidelines could be considered as an administrative reform that it is insufficient to enable new accountability relationships (Larrinaga, Moneva, Llena, Carrasco, & Correa, 2002; Owen, Gray, & Bebbington, 1997).
The aim of this paper is to look at sustainability within the GRI guidelines and try to find out what is missing (if anything) in the GRI guidelines and consequently, what conception of SD is being constructed and diffused. The first guidelines were published in June 2000 as a pilot document for very few companies. After their analysis and a multi-stakeholder process, a second version was presented at the Johannesburg Summit (August 2002). Many things have changed between the first version of the guidelines and the second—the number of environmental, social and economic indicators, the conceptualization of these indicators and the consideration of integrative indicators. The evolution of the guidelines suggests a concept of SD which appears to fail in the integration of the three pillars (economic, environmental and social). Furthermore, it requires a reflection on the origins of the concept of SD.3 By reviewing the origins of the SD concept and contrasting the latest version of the GRI guidelines (2002) some explanations can be found for a better understanding of the concept.
Possible explanations could be tied to the criticism that SD is a vague concept (Atapattu, 2002 and Bebbington, 2001) or to the criticism that the conceptions and the use of the concept of SD are environmentally biased (see Bebbington, 2001; Bebbington & Gray, 2000). However, the shift from the original conception within Agenda 214 – that set a two-part division between the socio-economic and the biophysical spheres – to the current three pillars of sustainable development could provide an explanation of what is going on. This shift as Upton (2002) remarks, can lead to a world where everything is tradable and emptying SD of content by seeking to extend it to everything.
In such a disconcerting state of affairs, the concepts of weak and strong sustainability (Bebbington, 2001; Bebbington & Thomson, 1996) suggest essential elements to assess the organizational behaviour and progress towards sustainability. Additionally, these concepts can fit for the practical purpose of making an appraisal of the conceptual position adopted – or elaborated along with the ongoing process of development – by the GRI guidelines concerning SD/sustainability. This article extends prior research, particularly, in two significant ways. First, revisiting the main topics of controversy around SD to get a better understanding of the concept of SD handled in the GRI guidelines. Second, providing some arguments to discuss and interpret the current immobilization related to the integration of the three pillars of sustainability, using the theoretical distinction between administrative and institutional reforms.
We proceed as follows. The next section illustrates the controversy around the concept of SD and explores the role that financial accounting can/cannot play in the building process of SD, scrutinizing the contribution of social and environmental reporting for this purpose. The third section addresses the particular case of corporate social reporting (CSR) and the TBL approach adopted in the GRI guidelines. The fourth section assesses the concept of SD/sustainability handled in the GRI guidelines, analysing the conceptual framework of the guidelines and the performance indicators. Finally, we discuss and draw conclusions on the concept of SD/sustainability constructed and developed by the GRI. For illustrative purposes, the paper extracts information from some GRI reporters.
2. Sustainable development and corporate reporting
Recent years have been witness to the coming to prominence of expressions such as sustainability or sustainable development, which have become important issues within the political and organizational agenda. Undoubtedly, the publication of the Brundtland Report in 1987 and the subsequent Summits of Rio and Johannesburg supported by the United Nations have helped to bring about the development of a shared consciousness about the need to reflect deeply on the ways society can contribute to social welfare without threatening survival of the earth. It is possible to find many definitions of SD in the academic literature and in institutional documents, but the most widely accepted is that proposed in the Brundtland Report: “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.
However, as Eden (2000, p. 111) indicates, the only thing about sustainability that academics seem to agree upon is that there is no clear meaning or definition and this is part of the problem and part of the attraction for policy-makers and lobbying groups (Springett, 2003): sustainability can be made to mean what one would like it to mean.