GRI launches 'report-or-explain' initiative

The Global Reporting Initiative, a movement that emerges from the United National Environmental Programme, thinks it's time that a lot more companies followed the approach of reporting on non-financial matters focused on the use of resources and other aspects of social responsibility and sustainability. While the GRI standards for reporting are used by a wide variety of large listed companies, they are far from universal. So far it has been a voluntary programme, but GRI now wants to put regulatory weight behind it. "Governments, regulators, stock exchanges, investors and associations can help information reach a critical mass in the market by asking: 'Why don’t you report?'" it said. "There are many ways to do this, for example through regulation. Sustainability reporting does not necessarily need to be mandatory: If regulators were to adopt a report or explain policy, companies could still be free to choose what information to disclose." This "report-or-explain" approach echoes the "comply-or-explain" principle widely used in corporate governance codes around the world.

Source documents: The initiative website has links to background information. Its report "Carrots and Sticks" is a 96-page pdf file.