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Hospital Corporation of America (HCA) is one of the nation’s leading providers of healthcare services, a company comprised of locally managed facilities that includes about 162 hospitals and 112 freestanding surgery centers in 20 states and England and employing approximately 205,500 people. Employees play a critical role in helping HCA deliver high-quality care to its patients around the globe. To help employees and their immediate families who are experiencing financial hardships, the 
Practices and trends in non-financial reporting: GRI and ISO 26000
A growing number of companies around the world are reporting non-financial (social, environmental and governance) information. To discuss emerging trends, challenges and opportunities of non-financial reporting, the Carroll School of Management Center for Corporate Citizenship at Boston College hosted a one-day symposium under the auspices of the Global Education Research Network (GERN). Prominent experts from around the world shared their views and perspectives on the importance and future development of nonfinancial reporting.
According to CorporateRegister.com there were 1,000 new reporters in 2010. Around 2000 companies used the Global Reporting Initiative (GRI) guidelines in 2010 and according to Bloomberg, a total of 4,600 companies referred to the GRI guidelines in their reports. Many countries around the world are beginning to mandate non-financial reporting – examples include France, South Africa, Denmark and Singapore. The recession of 2007-2009 elevated the political reasons behind greater adoption of non-financial reporting – to increase transparency and business responsibility in addressing social, economic and environmental challenges. Experts such as Steve Lydenberg, partner at Domini Social Investing, believe mandatory non-financial reporting is just a question of time. The key issues today are when, what and how to report. Yet, voluntary CSR reporting is not going away, Lydenberg believes.
Two of the most prominent frameworks for CSR management and reporting today are the Global Reporting Initiative and ISO 26000 (an ISO-developed standard for Corporate Social Responsibility). What should companies know about these two frameworks and their future developments?
The GRI was launched in 1998 as a collaboration of companies, NGOs, investors and other stakeholders with the main goal of creating a common framework and indicators for reporting of sustainability performance. Two hundred organizations from 50 countries participated in the process for developing the first guidelines. Today GRI is the gold standard for sustainability/CSR reporting worldwide. Over the years it has been through several revisions, the last one in 2005 when the third generation guidelines (G3) were launched to include sector supplements.
Despite the growing popularity of GRI, the guidelines are still used by a small number of companies as acknowledged by Nelmara Arbex, deputy chief executive, GRI. Some experts argue that government mandates are needed; others believe there is a need for a smaller set of indicators that can be linked to financial reporting. The movement toward “integrated reporting,” or combining financial and non-financial reporting, led to the creation of the International Integrated Reporting Committee (IIRC) in 2010, which is currently working to develop such guidelines. Key challenges facing the GRI today include the issue of harmonization (ensuring companies are reporting comparable information), assurance and validation of reported information and wider use of the data by mainstream financial analysts. The new G4 guidelines to be launched in May 2013 will aim to address these challenges. The open consultation process for obtaining stakeholder feedback has begun and starting in August 2011 there will be a 90-day period when anyone can register and send their suggestions.
Compared to the GRI which is strictly focused on reporting of companies’ non-financial information, the new ISO 26000 launched Nov. 1, 2010 focuses on the process for incorporating CSR criteria in a company’s management system. It does not include any indicators or certification. One key benefit of ISO 26000 according to Dante Pesce, elected member of Post Publication Organization of ISO 26000, is that it promotes greater internal communication and collaboration (e.g., production managers talking to strategy managers). The work on ISO 26000 began in 2005 when 99 countries established working groups. Business, NGOs, labor groups and government were key participants in the standard development.
The strong international support for launching such a standard was demonstrated by the fact that representatives from 93.5 percent of participating countries voted “yes” on adopting the guidelines in their own country. To everyone’s surprise at the end of the negotiations, the United States representatives voted “no” and China voted “yes,” according to Pesce. Unanimous support of delegation members was required for a “yes” vote and of the six stakeholder groups in the U.S. delegation, only business was against adopting the guidelines.
In the United States, ANSI, the American alternative to ISO, has developed a standard for social responsibility which “mirrors ISO 26000,” Pesce said. It remains to be seen whether the business community will widely adopt the new ISO guidelines for corporate responsibility as these are not easy or simple to implement and will most likely lead to a growing number of ISO26000 consultants. Yet the launch of the standard is one more indication of the increasing importance of non-financial information for business and society.
The movement toward CSR management and non-financial reporting is gaining momentum worldwide. Driven by globalization, web connectivity, government policies, and stakeholder pressures, it is just a matter of time before it becomes the standard practice for any company committed to long-term business success. But critical issues to be addressed remain and these include harmonization of reported information, more guidance on materiality, incentives for greater adoption of assurance and validation of provided information, expanded use by mainstream investors, and development of a smaller number of key performance indicators to serve as a “dashboard” to investors and others interested in long-term company success.
