By James Bonner, independent sustainability consultant
In June 2012 a number of representatives from governments, institutions and other major groups congregated in the Brazilian city of Rio for the ‘UN Conference on Sustainable Development ‘ or ‘Rio+20’. Intended as a follow up to, and furthermore taking its name from, the UN ‘Earth Summit’ in Rio in 1992 – 20 years previously – it was billed as a significant opportunity to move the sustainability agenda forward. Different groups, with various objectives and perspectives on a range of environmental and social issues attended the summit which intended to focus on the two general themes of ‘the green economy’ and ‘institutional frameworks for sustainable development’.
In general, there were mixed reactions to the perceived immediate success of the conference, with much of the media presenting the view that too little in tangible commitments were achieved to move the agenda forward, and the summit’s outcome document, called ‘The Future We Want’, being labelled by some commentators as ‘watered-down’ and ‘weak’. However, a number of other perspectives noted that while the negotiations never provided a significant and binding international agreement on a specific issue it was the conference’s numerous ‘side-events’ where some significant progress was achieved. Through these discussions and collaborations of bodies from different sectors, businesses, investors, agencies, NGOs and other groups, a range of voluntary and formal commitments on a variety of sustainability issues and projects were made, and furthermore backed up by over $500billion of pledges.
Of interest, some specific outcomes relating to the themes of corporate reporting were notable from the conference and the following two examples have significant, and obvious, links to the accounting and finance professions: one a collaboration from the finance sector, and the other in relation to a specific paragraph in the summit’s official outcome document.
THE NATURAL CAPITAL DECLERATION
The NCD is a commitment by the financial sector to support the integration of natural capital, the stocks of goods and services provided by the natural environment into their lending, investment and insurance products and services. Prepared in the months leading up to the summit, the NCD was publically launched at Rio+20 in a clear attempt to garner attention to its further aim as ‘a call by financial institutions to governments to develop the regulatory frameworks to stimulate businesses – including in financial institutions – to integrate, value and account for natural capital in a company’s business operations by means of disclosure, reporting and fiscal measures.’ As such, with 39 signatories from the financial sector endorsing the Declaration, and furthermore supported by a number of other significant bodies (including ACCA), it aims to ‘work towards building a global consensus for the integration of Natural Capital into private sector accounting and decision-making’.
Notably, one specific section (paragraph 47) of the aforementioned outcome document- The Future We Want – deals specifically with corporate reporting. The excerpt states: ‘We acknowledge the importance of corporate sustainability reporting and encourage companies, where appropriate, especially publicly listed and large companies, to consider integrating sustainability information into their reporting cycle. We encourage industry ,interested governments as well as relevant stakeholders with the support of the UN system, as appropriate, to develop models for best practice and facilitate action for the integration of sustainability reporting, taking into account the experiences of already existing frameworks, and paying particular attention to the needs of developing countries, including for capacity building.’
As such, four leading governments (Brazil, Denmark, France and South Africa) joined together at the summit to demonstrate, and commit, their support the themes of this section of the outcome document. Using the collective name ‘The Friends of Paragraph 47’, the group of four national governments have committed to advancing corporate responsibility reporting in the private sector, and furthermore to ensure the issue remains high on the international agenda. Following the initial commitments at the Rio gathering, the group have already embarked on a process of follow up meetings to advance their vision and agenda for taking this commitment forwards.