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21

cultural, historical and spiritual knowledge and experiences to the Forum (Bozlağan,
2010: 1023,1024).

The objectives of organising this follow-up meeting are as follows (Çamur

and Vaizoğlu, 2007: 301):

• Renewing the responsibilities taken for sustainable development,

• To identify the failed subjects and find out the reasons,
• To recognise successful practices and develop actions to increase and
strengthen them,
• Setting priorities in the post-1997 period,
• It is to raise issues that were missing in Rio.

Moreover, the Kyoto Protocol was signed in the same year. When the Kyoto
mechanisms are analysed, they are practices that are based on clean development and
offer a common practice in emission trading (Dresner, 2008: 55).

1.2.2.11. United Nations Millennium Summit

In September 2000, the United Nations organised the Millennium Summit

and issued the Millennium Declaration. Signed by 189 countries, the Millennium
Declaration covers peace, security, development, environment, protection of
vulnerable groups, human rights and governance. The Declaration put on the
international agenda a set of development goals with specific objectives, called the
"Millennium Development Goals", to be achieved by 2015. The Millennium
Development Goals (MDGs) are human development goals for the eradication of
poverty and hunger, basic education for all, achievement of gender equality and the
status of women. empowerment, child deaths
Reduction, Mum Improving health, HIV (Human
Immunodeficiency Virus) / AIDS (Acquired Immune System Disorder - Acquired
Immune
 22

Deficiency Syndrome), combating malaria and other epidemic diseases,

environmental sustainability and global partnership for development (Yıkmaz, 2011:
19).

1.2.2.12. Istanbul+5

The "Special Session of the United Nations General Assembly Istanbul+5"

was held at the United Nations Headquarters in New York on 6-8 June 2001. This
session was held in order to review the progress made and the difficulties
encountered in the implementation of the decisions adopted on sustainable human
settlements and housing at the Habitat II Conference held in Istanbul in June 1996
(Çamur and Vaizoğlu, 2007: 301).

1.2.2.13. World Summit on Sustainable Development

It has now become a common practice to organise a "plenary" conference on

the tenth anniversary of United Nations conferences. The World Summit on
Sustainable Development was organised in Johannesburg in 2002 as a continuation
of the United Nations Conference on Environment and Development. It is also called
"Rio+10" (Dresner, 2008: 49).

It can be characterised as an overall assessment of the process of

implementation of the decisions taken at the Conference on Environment and
Development. The Johannesburg Conference was a more participatory event than
previous United Nations conferences. In addition to state representatives and local
administrators, representatives from non-governmental organisations and private
sector organisations also participated in the Conference. For this purpose, it was
aimed to assess the state of the art of the countries in preparing their national
sustainable development strategies, and to analyse the problems encountered in the
implementation of Agenda 21.
 23

issues such as discussing problems and making more use of the experiences of the
sector organisations (Bozlağan, 2010: 1024,1025).

One of the outcomes of the Summit is the "Plan of Implementation", which is

an action plan consisting of 10 chapters and 153 articles agreed upon by the
governments. The issues covered in the Implementation Plan are poverty eradication,
changing unsustainable production and consumption patterns, conservation and
management of natural resources that will form the basis of economic and social
development, sustainable development in a globalised world, health, small island
developing states, sustainable development for Africa, implementation methods and
institutional structure of sustainable development. Another output is the "Political
Declaration" which constitutes the framework of the Implementation Plan adopted by
the governments on 4 September 2002. In this declaration, the governments pledge to
support the transformation of the decisions and partnership initiatives taken at the
Johannesburg Summit towards common goals and to ensure success. A third output
is the "Partnership Initiatives" that governments, the private sector, civil society
organisations and many different social groups have joined and signed. Partnership
Initiatives consist of concrete international projects for the realisation of sustainable
development. It is an important document for implementing the decisions taken at the
Summit (Çamur and Vaizoğlu, 2007: 302).

1.2.2.14. Stockholm Convention (2004)

A global control of persistent organic pollutants (POPs) has become

imperative due to the enormous increase in their amount in the world. For this
reason, the United Nations Environment Programme (UNEP) has identified 12 POPs
(Persistent Organic Pollutants-Aldrin, Chlordane, DDT, Dieldrin, Dioxins, Endrin,
Furans, Heptachlor, Hexachlorobenzene, Mirex, Polychlorinated Biphenyls,
Toxaphene) that require urgent action. Following the meeting held by UNEP in
Stockholm on 21-23 May 2001 in order to reduce these POPs and their effects
(Çamur and Vaizoğlu, 2007: 301), the United Nations Environment Programme
(UNEP) has identified a number of Persistent Organic Pollutants (POPs).
 24

The Stockholm Convention is a global agreement that entered into force on 17 May
2004. The purpose of this convention is to protect human health and the environment
from Persistent Organic Pollutants. As a State Party to the Convention, Turkey is
obliged to develop and implement a National Implementation Plan (NIP) under
Article 71 . The purpose of the NIP is to inform the Conference of the Parties and the
public on Turkey's current and future initiatives to fulfil the requirements of the
Stockholm Convention. These include legislation, secondary legislation, voluntary
programmes and standards, policies and other relevant measures, as well as actions
by the Turkish authorities and the public sector to reduce unintentionally produced
POPs, including dioxins and furans, Hexachlorohexane (BHC) and PCBs (Unido-
POPs Project, 2006: 1).

1.3. Reasons for the Need for Sustainability

How can we know whether a city, a region, a country, humanity as a whole is

sustainable for a certain period of time? This question is very important in terms of
sustainability. Although there is not yet a commonly accepted answer to this
question, it is difficult, but not impossible, to answer this question. Based on the
concept of "weak sustainability", some researchers argue that rich countries such as
Japan or the Netherlands are more sustainable than poor countries such as Africa,
while others argue that the resource consumption of very rich and over-industrialised
countries is the major contributor to unsustainability (Haberl et al., 2004: 199).

Undoubtedly, sustainability has become very important for companies, many

administrations and Non-Governmental Organisations (NGOs) all over the world.
Some factors have an impact on the importance of sustainability. These factors are as
follows (Aras and Crowther, 2009: 4-21):

i. Global Warming: Changes in weather systems worldwide are felt by all

humanity. Extraordinary weather changes, rains, snow,
 25

drought, hot weather, hurricanes are experienced in many parts of the world. Global
warming and climate changes are among the important issues discussed by the whole
world. Although there are many factors that cause global warming, commercial and
economic activities play a major role in this issue. Many people emphasise that
greenhouse gases have many effects together with carbon dioxide and that economic
activities lead to global warming with these gases. These judgements lead to the
belief that changes in human and company behaviour are needed. Sustainability is
one of the perceived need factors related to such a change caused by today's
concerns.

ii. Ecological Environment: Generally, carbon dioxide emissions refer to the

conversion of energy carriers such as wood burning, natural gas, coal and oil. The
amount of carbon released during the energy conversion process reaches the
atmosphere and is blamed for global warming and even climate change. This has
become a worldwide concern and has led to the Kyoto Protocol. The Kyoto protocol
defines legally binding targets and timetables for industrialised countries that have
ratified the protocol to cut their greenhouse gas emissions.

iii. Resource Depletion: Clearly our planet's resources are limited and this is
a significant limiting factor for growth and development. However, the depletion of
the planet's resources is an important actor in increasing the importance of
sustainability.

iv. Competition: The realisation that resources are clearly finite increases
competition for their use. Globalisation has naturally increased the extent of
competition worldwide. Since resources are necessary for growth, competition is
intensifying day by day.

v. The Gaia Hypothesis: The Gaia Hypothesis was created by James

Lovelock after the Greek goddess of the earth. In his hypothesis, Lovelock proposed
a different model of the planet Earth, in which the entire ecosphere and various
 26

All the living creatures living there are mutually interdependent in their aspects and
have established a complete system.

vi. Population The world population is gradually increasing. Increasing

population also increases the need for consumer goods and raises questions about
sustainability. The need for food in such increasing quantities is particularly related
to and compatible with the need for agricultural production. As a result of climate
change and the expected interruption in agricultural production, it has reached a
worrying dimension for many people, especially this concern has emerged in terms
of sustainability.

vii. Global Compact: This convention is an initiative developed by the

United Nations. It was developed in order to harmonise the objectives of businesses
worldwide and policies related to sustainable and socially responsible behaviour and
to encourage businesses in these matters and to report to them in a common
framework. For the first time, the United Nations Secretary-General Kofi Annan
On 31 January 1999, it emerged in his speech at the World Economic Forum. This
convention has 10 principles. These principles are related to human rights, labour,
environment and anti-corruption (www.globalcompactturkiye.org).

viii. The Development of Utilitarianism: Utilitarianism should be recognised

as the cornerstone of the capitalist system. However, defining it as "the greatest
number is the best" is to accept an ordinary and inadequate definition. The arguments
for maximising social benefit (utility) are rather in a summarising process.
Inevitably, therefore, the increase of a large amount of benefit for a small number of
people, even a slight departure from the fact that these people help a large number of
people to demonstrate a net increase in benefit for society, leads to the sharing of all
benefits among a small group of people.

1.4. Guidelines for the Implementation of Sustainability in Businesses:

Standards and Principles
 27

There are various initiatives to identify key indicators of whether a country is

close to or far from sustainability. One important initiative has been developed by the
World Resources Institute (WRI). This project aims to derive, develop and apply
performance measures for less sustainable practices. In particular, Rangathan (1998)
points out that there are more than 50 studies and that there are still two major
problems that persist in these approaches. The first of these problems is that it is
almost impossible to capture any of the indicators that are completely incompatible
with the financial performance measurement systems of the organisation. These
arrangements are already quite difficult in themselves. Secondly, it is difficult to
develop meaningful integration between economic, environmental and social
indicators. In this experience, WRI reflects much earlier experience. Only on rare
occasions do the indicators capture key issues that necessarily provide a complete
narrative of the range of indicators. Thereafter, as Rangathan notes, users need to
simplify the integrated indicator sets and, fundamentally, weaken the value of any
one indicator for these accounts (Gray, 2010: 50,51).

The relevant standards and guidelines have been developed to determine the
reporting framework and are as follows (www.sustainabilitysa.org, Tokgöz and Önce,
2009: 262-264; Önce et al., 2015: 237,238):

• EMAS (Eco Management and Audit System): Developed in 1993 and

revised in 2001. It is a voluntary environmental management initiative. It
requires businesses and other organisations to continuously assess, improve
and publicly disclose their environmental performance. After the revision in
2002, it requires EN/ISO 14001 certification as an environmental
management system for enterprises.
• CAUX Principles (CAUX Round Table Principles for Business):
Developed in 1994 in Minnesota, United States of America (USA). It
emphasises the importance of global corporate responsibility in reducing
social and economic threats to world peace and stability. Caux principles
(Minnesota
 28

Principles) sets out a comprehensive set of ethical rules for businesses

operating internationally and in diverse cultures.
• Global Reporting Initiative (GRI): Founded in the USA in 1997 by Ceres
and Tellus Institute, GRI provides a sustainability reporting framework. More
than 1300 companies follow the GRI Framework and hundreds of others
produce sustainability reports using the criteria.
• Social Accountability8000: Developed in London in 1998 and revised in
2002. SA 8000 is a standard for social accountability and workplace working
conditions established by the Social Accountability International (SAI). It
focuses on labour-related issues in the supply chain and includes employees
and workplace working conditions. It is based on international agreements on
human rights and labour law.
• AccountAbility1000: Developed in London in 1999 and revised in 2002.
This standard provides general principles for the social and moral
accountability of businesses. It is one of the few standards that clearly
emphasize the need to ensure dialogue with stakeholders in all processes such
as planning, implementation, reporting and auditing. It has been developed to
emphasise the need to involve all stakeholders in the daily activities of the
business.
• Q-RES (Quality of the Social and Ethical Responsibility of Corporations):
Developed in 1999. It is an initiative of the Centre for Ethics, Law and
Economics, working with businesses, civil society organisations, the EU and
SIGMA. It is based on a management system derived from the relationships
between organisations and their stakeholders. The main objective of the
Centre is the continuous improvement of processes related to t h e creation and
implementation of corporate social responsibility instruments in organisations.
The focus of this study i s on the moral vision of the organisation, moral
codes, moral education, implementation and monitoring system, moral and
social accountability and independent auditing.
• Global Sullivan Principles: Developed in 1999 in the USA.
Protection and observance of human rights, elimination of
child labour
 29

It includes principles for abolishing discrimination, ending discrimination and

ensuring social justice.
• United Nations Global Compact (Global Compact): Developed in 2000 in
New York. It contains principles for companies to adopt, promote and
implement a set of core values in the areas of human rights, labour standards,
environment and anti-corruption within their spheres of influence.
• Ethics Compliance Standards (ECS): Developed in 2000. It aims to enable
businesses to reveal illegal and dishonest activities without the help of
external systems or third parties. It aims to create and document systems to
ensure compliance with the law.
• The Organisation for Economic Co-operation and Development (OECD)
Guidelines for Multinational Enterprises: Developed in 2000. The revised
version of the Guidelines includes the realisation of changes that strengthen
the economic, social and environmental elements of sustainable development.
The Principles provide recommendations for multinational enterprises to
conduct business on the basis of a sense of responsibility. It emphasises that
the governments of countries and the headquarters of multinational
enterprises, which are the source of most of the world's direct investment,
should be committed to common values.
• Communication on Progress (COP): Developed in 2000. It refers to the
UNGC's 10 principles on human rights, labour standards, environment and
corruption.
• World Economic Forum Declaration on Global Corporate Citizenship:
Developed in 2001 in Davos. In this declaration, it is demanded that the
business world respect international standards and values on issues such as
environment, ethics, labour and human rights and take steps in these areas.
• SIGMA Project (Sustainability Integrated Guidelines for Management
Project): SIGMA, with the support of the UK Department of Trade and
Industry 1999
 30

is a project initiated in 2015 and supported by Forum for the Future,

AccountAbility and the British Standard Institute.
• ECSF Project (European Corporate Sustainability Framework: It started
to be developed in 2001 and lasted until 2004. It is a research project
developed to help company managers to help companies to do business both
sustainably and responsibly. It was financially supported by the European
Commission. The aim of the project is to create a general management
framework that combines sustainability, corporate social responsibility,
various quality management approaches and business practices.
• IFC Performance Standards: Developed in 2006. These are standards for
managing risks in social and environmental assessment.
• Carbon Disclosure Project (CDP): Developed in 2008. The main topics of
reporting are climate change, water use, damage to forests, environmental
risks of supply chains.
• Integrated Reporting (IR): Developed in 2010. Integrated reporting defines
the link between an organisation's strategy, management and financial
performance and the economic, environmental and social factors in the area
in which it operates.
• ISO 26000: Developed in 2010. It is known as SA 8000 Standard published
in 1998. It is a guide that can be used by all institutions from public
institutions to non-governmental organisations, from developed countries to
developing countries. This standard, which is a guideline that businesses,
public institutions and non-governmental organisations can benefit from, has
become a complement to social responsibility concepts that support
sustainable development.

In addition, organisations and studies on sustainability and sustainability

reporting are as follows (www.sustainabilitysa.org; Önce et al., 2015: 238,239):
 31

• World Business Council for Sustainable Development (WBCSD) - 1992: An

international organisation that sets out its common commitment to sustainable
development through three main factors: economic growth, ecological
balance and social development.
It consists of a coalition of 209 companies. In 2004, the Business Council for
Sustainable Development (BCSD Turkey) was established. It is the only
business partner and representative of the World Business Council for
Sustainable Development (WBCSD) in Turkey.
• European Corporate Social Responsibility Association (CSR Europe)-1995:
The association aims to promote the concept of corporate social responsibility
in international standards and to promote the awareness of social
responsibility in the international arena. In this context, it continues its
activities on a voluntary basis with an approach based on sustainable
development, corporate governance and public-private sector-civil society
partnerships. In 2005, the Corporate Social Responsibility Association of
Turkey was established. Since 2008, it has been a member of CSR Europe.
• United Nations Global Compact (UN Global Compact - UNGC)-2000: It is
an innovative corporate responsibility approach that proposes universal
principles to create a common development culture for the ever-competitive
business world. Being a party to the Global Compact, whose vision is
"Sustainable and comprehensive global economy", is entirely voluntary.
National networks, which serve the purpose of adoption in different national,
linguistic and cultural contexts, also provide an important platform for
companies to come together and take action on sustainability issues. In 2002,
Global Compact Turkey was established.
• The Organisation for Standardisation (ISO) is a non-governmental network
of national standards institutes of 161 countries that coordinate international
standards for business and products. The focus of corporate environmental
management systems and ISO 26000 standards and the 1SO 14000 Series is to
cover social responsibility.
• The Prince's Accounting for Sustainability Project ( A4S)-2007: The
Prince's Accounting for Sustainability Project
 32

The Accounting Project develops tools and guidance to help organisations

implement their s u s t a i n a b i l i t y strategies and practices. A4S believes that
only through the integration of environmental and social factors into business
and management reporting can the fundamental link between strategic direction,
financial performance and sustainability impacts b e c o m e clearer. A4S has
developed two sustainability management tools for organisations and a
sustainability reporting framework. A4S works in partnership with IFAC to
support sustainable organisations.
• Carbon Disclosure Project (CDP) - 2008: Works to change the way the
business world operates in order to reduce the effects of climate change and
protect natural resources. In 2010, the Carbon Disclosure Project (CDP)
Turkey was established. The Carbon Disclosure Project (CDP) under the
Climate Disclosure Standards Board (CDSB) is an independent, non-profit
organisation that coordinates investor relations between climate change
partners and organisations. Launched in 2000, CDP has become a global
standard for carbon emission disclosure methodologies and processes. The
CDP website provides the largest repository of corporate greenhouse gas
emission data in the world. The data is obtained by sending annual
questionnaires to 4 senior executives from over 4 of the world's top 500
companies with questions related to carbon emissions, climate change and
more recently water awareness and management. The most recent global report
was published in November 2010. The Carbon Disclosure Leadership Index
ranks companies based on disclosure quality. The CDP South Africa report was
launched in 2007 by the National Business Initiative (NBI). The report assesses
the disclosure quality of the top 100 JSE-listed companies. The last report was
published in November 2010.
• SEC (Securities and Exchange Commission) Guidance on climate change
disclosures: In the US, the SEC Commission has issued Clarifying Guidance on
existing disclosure requirements for public business entities on climate change
issues. The effective date is 8 February 2010. The Guidance addresses climate
change disclosures and existing climate change disclosure requirements for
listed entities.
 33

It serves as a reminder of the importance of the consequences of their disclosures

to the Commission and investors of their obligations under the regulations.
• International Integrated Reporting Council (IIRC) - 2010: A global
coalition of regulators, investors, companies, standard-setting authorities,
accounting professionals and NGOs. This coalition believes that the next step
in the development of the corporate reporting process is to communicate
about value creation.
• The Institute of Directors Southern Africa (IoDSA): Has a Sustainable
Development Forum that researches and disseminates information on
developments related to sustainability issues. It has published two position
papers:
-Position Paper 1: Implementing Sustainable Development as a Strategic
Business Model -August 2009,
-Position Paper 2: South African Business and Climate Change-September
2010.
• Sustainability Accounting Standards Board - 2011: An independent, non-
profit organisation that establishes sustainability accounting standards for use
by listed US companies in disclosing material sustainability matters to
investors and the public,

In addition, certain industries and specialised sectors have developed their

own specific rules for responsible behaviour, for example forestry, chemicals and
diamonds.
1.5. Sustainability Performance Indicators at the Business Level

Various indicators have been established in order to measure sustainability at

the enterprise level. It is still debated whether these indicators are useful for every
business and every sector. As stated before
 34

It should not be forgotten that success has many faces and that a single unit or scale
is not sufficient. The existence of different indicators also enables the issue to be
addressed by different segments and to be accepted in a wider area. It is noteworthy
that some of these indicators have become more widely accepted over time. These
are measurement indicators that will facilitate the acceptance and implementation of
corporate sustainability as a change project and will ensure comparability and
monitoring of progress, especially for investors. These indicators are mostly related
to reporting and are intended to make all dimensions of sustainability visible on a
company basis. In addition to financial results, performance based on economic,
social and environmental results has also gained meaning. Accordingly, both national
and international organisations have contributed to the establishment of a new way of
doing business in both a diffusion and systematic manner. The leading ones of these
indices can be determined as follows (Tokgöz and Önce, 2009: 266,267; Önce et al.,
2015: 239,240):

• Domini 400 Social Index (Domini 400 Social Index) (1990): Started to be
calculated by "KLD Research & Analytics", a company that conducts
research and produces indices for institutional investors. It is the first
sustainability index in the world.
• Dow Jones Sustainability World Index (Dow Jones Sustainability World Index
- DJSI) (1999): Developed by the Dow Jones Sustainability Group. This
index provides investors and financial analysts with a tool to evaluate
companies according to their sustainability performance.
• FTSE4Good Index (2001): It is a social responsibility investment index that
includes issues such as carrying out studies on sustainable environmental
issues in businesses, developing positive relations with stakeholders,
supporting universal human rights, etc.
• JSE Socially Responsible Investment (SRI) Index (2004): Johannesburg stock
exchange, South Africa. It is the first sustainability index among the stock
exchanges of developing countries.
 35

• Environmental Sustainability Index (ESI) (2005): The index is a joint effort

of the World Economic Forum's Global Leaders of the Future Working
Group, Colombia University's Earth Science Information Centre and Yale
University's Center for Environmental Law and Policy. This index is a tool
developed for the countries of the world and aims to monitor the progress of
countries in the field of environmental sustainability. Environmental systems,
environmental problems, protection of people from risks, social and
institutional capacity to fight against environmental risks, co-operation with
other countries on common global problems are the main elements of the
Environmental Sustainability Index.
• BIST Sustainability Index (2014): Turkey, Borsa Istanbul. The aim of the
index is to create an index that will include companies traded on Borsa
Istanbul with high corporate sustainability performance and to increase the
understanding, knowledge and practices on sustainability in Turkey and
especially among Borsa Istanbul companies.

Among these reporting frameworks and indices, the Global Reporting

Initiative (GRI), the Dow Jones Sustainability Index (DJSI) and the United Nations
Global Compact will be used in the application phase of our thesis and will be
discussed in detail as separate headings below.

1.5.1. Global Reporting Initiative (GRI)

The Global Reporting Initiative (GRI) is a network-based organisation that is

a pioneer in the field of sustainable development and practice and is the most widely
used worldwide. Technical quality and credit
 36

Aiming to achieve the highest level of accountability, GRI establishes its reporting
system together with business, social organisations and professional institutes
operating at the global level (www.globalreporting.org).

GRI was established in 1997 in Boston with 30,000 different participants

from 70 countries. In recent years, many organisations have voluntarily prepared
their sustainability reports according to the GRI Guidelines framework. These past
fifteen years have also provided a comparison opportunity for companies that gave
importance to sustainability in the early years in terms of their strategic orientation.
GRI has its roots in the Boston-based, non-profit CERES and Tellus Institutes. Dr
Allen White, CEO of GRI, developed the environmental reporting framework in the
early 90s. He used the CERES Principles in the quantification of environmental
indicators. GRI issued its first guideline on corporate sustainability measurement in
2000. The next guideline (G2) was presented two years later in 2002 at the World
Summit on Sustainable Development (WSSD). In the same year, GRI, which started
its activities under the name of UNEP within the United Nations, succeeded in
making 150 companies use this guide. In 2006, it published its 3rd Guideline (G3).
More than 3000 experts, civil society and labour organisations across the enterprise
have participated in this guideline. GRI was further strengthened at the Amsterdam
Conference on sustainability and transparency, which started in 2006 and is held
every two years. In May 2010, 1,200 delegates from 77 countries attended the third
conference. In March 2011, GRI published the GRI G3-1 Guidance - An update and
completion of G3 with expanded guidance on performance reporting on gender,
society and human rights (www.globalreporting.org). Then, in 2012, GRI published a
new reporting Guideline 4 (G4). "Organisations reporting using the G3 or G3.1
Guidelines will want to decide when to transition to the G4 Guidelines. GRI will
therefore continue to recognise G3 and G3.1 based reports for two full reporting
cycles. However, reports to be published after 31 December 2015 should be prepared
in accordance with the G4 Guidelines" (www.globalreporting.org).
 37

Sustainability reporting is the practice of measuring, disclosing and being

accountable to internal and external stakeholders for corporate performance towards
the goal of sustainable development. Sustainability reports developed using the GRI
Reporting Framework cover the results and outcomes that have emerged in the
context of the organisation's commitments, strategy and management approach
during the reporting period. Reports can be used for the following purposes, among
others (Özer, 2010: 14,15):

• Benchmarking and evaluating sustainability performance against laws, rules,

regulations, performance standards and voluntary initiatives,
• Demonstrate how the organisation influences and is influenced by
expectations about sustainable development,
• Performance, institution in and different with
organisations Time within a single organisation.

The GRI Sustainability Reporting Guidelines are r e g u l a r l y reviewed to

ensure that they provide the best and most up-to-date guidance for effective
sustainability reporting. The main objective of G4, the fourth such update, is to help
reporters produce reports that are meaningful and contain valuable information on
the organisation's most critical sustainability issues and to make sustainability
reporting standard practice. It is vital for society and markets that sustainability
reporting evolves in content and from an exceptional activity undertaken by a
minority of leading c o m p a n i e s to standard practice. In a d d i t i o n to being more
user-friendly than previous versions of the Guidelines, G4 has increased emphasis on
the need for organisations to focus their reporting processes and final reports on
topics that are material to their business and key stakeholders. This focus on
'materiality' will make reports more meaningful, more credible and more user-
friendly. This will enable organisations to engage markets and society on
sustainability issues.
 38

will enable them to better inform their organisations. While organisations can track
and manage a much wider range of sustainability-related topics through their day-to-
day management activities, this new focus on materiality means that sustainability
reports will focus on those issues that are truly critical to achieving the organisation's
objectives and managing its impact on society. The guidelines have been developed
through an extensive process involving hundreds of reporters, report users and
professional intermediaries around the world. The G4 therefore provides a globally
applicable framework that supports a standardised approach to reporting that
promotes the degree of transparency and consistency necessary to make information
useful and credible to markets and society. G4 is designed to be universally
applicable to all organisations, large and small, around the world. The features of G4
are supported by other GRI materials and services to make the Guidelines easier to
use for both experienced reporters and those new to sustainability reporting in any
sector. As with all GRI Guidelines, G4 includes references to widely recognised and
used subject-specific reporting documents and is intended as a consolidated
framework for reporting performance against different sustainability codes and
norms. G4 also provides guidance on how sustainability disclosures can be presented
in different report formats, such as stand-alone sustainability reports, integrated
reports, annual reports, reports for specific international norms, or online reporting.
The growing recognition that strategic sustainability-related information should be
combined with other material financial information is an important and positive
development. Sustainability is at the centre of the changes that companies, markets
and societies will experience, and this is becoming increasingly prevalent.
Sustainability information that is relevant or material to a company's value prospects
should therefore be at the centre of integrated reports (www.globalreporting.org).

The Guidelines are presented in two parts as Reporting Principles and

Standard Disclosures and Implementation Manual (www.globalreporting.org): �㸅
 39

"The first part - Reporting Principles and Standard Disclosures - contains the
Reporting Principles, Standard Disclosures and criteria to be applied by an
organisation to prepare its sustainability report 'in line' with the Guidelines.
Definitions of key terms are also included."

"The second part - the Implementation Manual - contains explanations on

how to apply the Reporting Principles, how to prepare the information to be
disclosed and how to interpret various concepts in the Guidelines. References to
other sources, a list of terms and general reporting notes are also included".

"Preparing a sustainability report utilising the Guidelines is an iterative

process. The following steps describe how to use the Guidelines in the sustainability
reporting process. This description is intended to guide the reader through the main
sections of the Guidelines and does not necessarily describe the entire process of
preparing a sustainability report. Underpinning the preparation of a sustainability
report in accordance with the Materiality Principle is, among other things, a focus on
the process of identifying material Aspects. Material Aspects are those that reflect
the significant economic, environmental and social impacts of the organisation or
that significantly influence stakeholders' assessments and decisions". Steps that can
be followed are given below (www.globalreporting.org):

1. Step: ��� A GENERAL IDEA. �㸅

"Read the Reporting Guidelines and Standard Disclosures. Read the

Definitions of Key Terms".
 40

2. Step CHOICE REFERRED TO 'COMPATIBILITY'

OPTION DECIDE.

"The Guidelines provide two options for an organisation to prepare its

sustainability report 'in accordance' with the Guidelines. These two options are Core
and Comprehensive. These options determine the content to be included in order to
prepare the report 'in line' with the Guidelines. Both options can be applied to any
type, size, sector or location of organisation" (www.globalreporting.org).

"The Guidelines offer two options for organisations to prepare their

sustainability report 'in line' with the Guidelines: Core option and Comprehensive
option. Each option can be applied by all organisations, regardless of their size,
sector or location. The focus of both options is on the process of identifying the
Material Aspects. Material Aspects are those that reflect the organisation's significant
economic, environmental and social impacts or that significantly influence
stakeholders' assessments and decisions. The Core option includes very important
components of a sustainability report. The Core option provides the infrastructure
through which an organisation communicates the impacts of its economic,
environmental, social and governance performance. The Comprehensive option
extends the Core option by requiring additional Standard Disclosures on the
organisation's strategy and analysis, governance, and ethics and integrity. In addition,
the organisation is asked to communicate its performance more comprehensively by
reporting on all Indicators related to the identified material Aspects. Whether a new
reporter or an experienced one, an organisation needs to choose the option that best
meets its reporting needs and ultimately enables it to meet the information needs of
its stakeholders. The options are not related to the nature of the report or the
performance of the organisation. They reflect the alignment of the organisation's
sustainability report with the Guidelines" (www.globalreporting.org).