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1、 How to strengthen corporate accountability:The case for unlocking sustainable corporate performance through mandatory corporate reporting Joint report by GRI and the World Benchmarking Alliance September 2024 How to strengthen corporate accountability:the case for unlocking sustainable corporate pe

2、rformance through mandatory corporate reporting 2 Table of contents Introduction 3 Key findings and recommendations 4 The role of corporate sustainability reporting 5 WBAs Core Social Indicators and GRI Standards 8 The relation between WBAs CSI scores and GRI Standards 11 Analysis and key findings 1

3、2 Recommendations for UN Member States 20 Conclusion 20 Annex 1.WBAs core social indicators 21 How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 3 Introduction The United Nations will hold a Summit of the Future

4、on 2223 September 2024.This event is being billed as an opportunity to enhance cooperation on critical challenges and address gaps in global governance.It should also reaffirm existing commitments,including to the Sustainable Development Goals(SDGs)and the United Nations Charter,and move towards a r

5、einvigorated multilateral system that is better positioned to positively impact peoples lives.At this summit,Member States will consider how to deal with todays challenges,as well as future threats.The imperative to engage companies towards sustainable development efforts lies at the heart of the di

6、scussions around the UN Summit for the Future.This report explores the pivotal role of corporate sustainability reporting,particularly the leveraging of GRI Sustainability Reporting Standard(GRI Standards),in advancing sustainable development agendas and fostering corporate accountability.It was joi

7、ntly prepared by the GRI and World Benchmarking Alliance(WBA)in the build-up for the Summit for the Future to present the UN Member States with recommendations for improving corporate transparency and,subsequently,corporate performance on the Sustainable Development Goals(SDGs).The world is now at t

8、he halfway point on the path to achieving the SDGs,and yet we are collectively still far off track with most of the goals and targets.Similarly,we are not on course to achieve the Paris Agreement of keeping the world below the crucial 1.5 C temperature increase.Governments remain responsible for dri

9、ving action to accelerate the transformation,but they need the full cooperation of business to succeed.Herein lies the problem:the world is currently lacking enforcement mechanisms that are effective in holding the most influential companies accountable for their contribution to the collective susta

10、inability goals.As a result,the sustainability performance of a company and its contribution to sustainable development today are not sufficiently consequential.How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 4

11、 Key findings and recommendations To examine the pivotal role of corporate sustainability reporting,this report analyses the relationship between sustainability performance,as measured by WBAs core social indicators(CSIs),and GRI reporting.Specifically,it examines whether corporate disclosure,guided

12、 by the GRI Standards,enhances corporate social performance as measured by WBAs Social Benchmark.Through this analysis,several key findings emerge:There is compelling evidence of a positive correlation between companies publishing a GRI content index and their scores in WBAs Social Benchmark.Compani

13、es that publish a GRI content index typically achieve CSI scores that are at least 47%higher than their counterparts.Moreover,companies demonstrating strict adherence to the GRI Standards tend to score higher than those who only partially comply with the requirements.The positive correlation is rein

14、forced by the fact that the vast majority of companies scoring zero on WBAs core social indicators do not publish a GRI content index.The majority of companies with high CSI scores use GRI Standards,while others adhere to different reporting frameworks.This association indicates that compliance with

15、 established reporting standards generally correlates with enhanced social sustainability performance.Simply using or referencing a reporting standard alone does not guarantee high CSI scores,as reporting may be incomplete.This underscores the importance of mandatory reporting and ensuring accurate

16、and comprehensive disclosure.The key findings above result in the following set of recommendations:UN Member States must build on this positive correlation between corporate sustainability reporting and company sustainability performance,and mainstream mandatory reporting.Investors must ensure they

17、encourage companies to disclose comprehensively and to take relevant actions to improve their sustainability performance.Publishing information in a structured form,indicating where it can be located,helps users navigating the report easier and making the reporting more credible.How to strengthen co

18、rporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 5 The role of corporate sustainability reporting Why we need to close the corporate accountability gap A key challenge hindering sustainable development progress is the lack of robus

19、t mechanisms to hold companies accountable for their environmental,social and governance(ESG)impacts.While many companies express commitments to sustainability,transparency gaps persist,which impede stakeholders ability to assess their performance and contributions towards global objectives.The pivo

20、tal role of corporate impact reporting Companies are under growing pressure to extend their obligations beyond profit seeking and make broader commitments to society and the environment.Sustainability reporting comes in as a tool to increase transparency and accountability in the areas that traditio

21、nal financial reporting is not dealing with.Sustainability reporting helps companies identify and manage their outward impacts on the economy,environment and people,allowing them to meet their responsibilities towards stakeholders and to improve internal processes.Widely used reporting standards and

22、 frameworks,such as the GRI Standards,are essential for companies to report credibly and in line with scientific and societal expectations.Over the past 25 years,there has been a significant voluntary uptake of reporting standards and frameworks by the business community.This has led to greater tran

23、sparency and more relevant disclosures that benefited investors and society at large.Making the case for mandatory corporate sustainability reporting Sustainable Development Goal 12.6 states that governments should encourage companies,especially large and transnational companies,to adopt sustainable

24、 practices and to integrate sustainability information into their reporting cycle.Mandating corporate sustainability reporting is necessary to enhance clarity and standardize disclosure by all companies.It helps scale the availability of ESG data,which supports investor decision-making and serves as

25、 a building block for sustainable finance.By making reporting mandatory,all companies are held to the same standards,also when it comes to the verifiability of information.Finally,once most companies in a market disclose sustainability information,governments can use it to further inform policy deve

26、lopment and ensure a more equitable future.How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 6 To summarize,reporting plays a crucial role in measuring sustainable corporate performance for several reasons:Ensuri

27、ng accountability:mandatory sustainability reporting requirements compel companies to disclose their environmental,social and governance(ESG)performance,fostering accountability to stakeholders,including investors,consumers,employees and regulators.Without mandatory reporting,companies may choose no

28、t to disclose critical information,hindering stakeholders ability to accurately assess their sustainability practices.Standardization and comparability:mandatory reporting frameworks establish standardized guidelines and metrics for disclosing sustainability information,promoting consistency and com

29、parability across companies and industries.This standardization facilitates benchmarking and performance comparison,enabling stakeholders to evaluate companies sustainability performance and identify leaders and laggards.Identifying risks and opportunities:mandatory reporting enables companies to id

30、entify and disclose material ESG risks and opportunities that may impact their long-term financial performance.By mandating the disclosure of such information,regulators and investors can gain insights into companies exposure to environmental,social and governance hazards,enabling proactive risk man

31、agement and strategic decision-making.Supporting policy development and regulation:mandatory reporting frameworks provide policymakers with valuable data and insights into companies sustainability performance,informing the development of evidence-based policies and regulations.By mandating the discl

32、osure of sustainability information,regulators can identify areas where intervention may be necessary to address systemic sustainability challenges and promote responsible business practices.Facilitating investor decision-making:investors increasingly consider ESG factors when making investment deci

33、sions,recognizing their potential to impact companies financial performance and long-term value creation.Mandatory reporting provides investors with access to standardized and reliable sustainability data,enabling them to integrate sustainability considerations into their investment analysis and dec

34、ision-making processes.How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 7 The role of benchmarking in assessing corporate sustainability performance Benchmarks serve as an essential tool for measuring and compar

35、ing companies corporate sustainability performance.They equip governments,civil society,individuals,financial institutions,and businesses themselves with the information they need to exert their full influence.They also clarify where and how companies can contribute to sustainability and highlight g

36、aps,which can allow governments to develop better public policy and inform the efforts of civil society.Benchmarks can help companies prioritize action,which maximizes their contribution to sustainable development in a way that is efficient and effective.Ranking and measuring companies gives them th

37、e strategic guidance needed to drive change and create accountability for those private sector actors that are not meeting the standards set out in our global agendas.Benchmarking harnesses the forces of competition to improve corporate performance:leaders strive to excel further,while laggards are

38、motivated to catch up.The cyclical nature of benchmarks provides companies with a strong incentive to continually improve and show progress over time.How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 8 WBAs Core

39、Social Indicators and GRI Standards A number of organizations,including WBA,make use of ESG information disclosed in company reports to assess corporate sustainability performance.Both WBA and GRI are non-for-profit entities which provide their knowledge products as a free public good in the interes

40、t of sustainable development.WBAs Social Benchmark WBA has identified 2,000 globally influential companies,collectively known as the SGD2000.WBA has devised a comprehensive set of benchmarks across seven transformations:decarbonization and energy,food and agriculture,digital,urban,nature,financial a

41、nd social.These transformations are deemed crucial for advancing society,preserving the planet and fortifying the economy,all in alignment with the 2030 Agenda.The benchmarking process involves evaluating,ranking and quantifying the contributions of these 2,000 companies towards the achievement of t

42、he Sustainable Development Goals(SDGs).As part of their evaluation within their respective benchmark,all companies are also assessed across the Core Social Indicators(CSIs).These CSIs act as markers for societal expectations that companies must meet to ensure inclusivity,support the achievement of t

43、he SDGs and contribute to a better future that benefits everyone.The CSIs evaluate companies in three crucial areas:respect for human rights,the provision and promotion of decent work and ethical conduct.Companies can score a maximum of 20 points in the CSIs.The GRI Standards GRI develops the GRI St

44、andards,which define global best practices for public reporting on a broad range of economic,environmental and social issues.The GRI Standards are the most widely used framework for disclosing ESG information,according to KPMG.The firms 2022 Survey of Sustainability Reporting indicates nearly 80%GRI

45、 adoption rate among worlds largest 250 companies.At country level,this figure is nearly 70%among the national largest 100 companies in 58 jurisdictions covered by the Survey.The GRI Standards build on the expectations for responsible business conduct outlined in authoritative intergovernmental inst

46、ruments.They are structured as a modular and interconnected framework,comprising three distinct sets:the GRI Universal Standards,which are applicable to all companies;Sector Standards,tailored to specific sectors;Topic Standards,which provide specific disclosures for reporting on particular sustaina

47、ble topics.It is important to note that the GRI Standards do not establish specific thresholds for good or bad performance,nor do they confer certificates or labels to reporting companies.Furthermore,reporting in accordance with the GRI Standards does not,by itself,indicate that a company is sustain

48、able.The push for improved corporate disclosure and adoption of the GRI Standards has gained momentum in recent years.With businesses are under heightened scrutiny for their ESG practices,stakeholders are increasingly calling for greater transparency and accountability.The Carrots and Sticks databas

49、e How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 9 jointly run by GRI together with Kings College London,University of Edinburgh and Stellenbosch Business School,offers insights into 2,463 ESG and sustainabili

50、ty policies across 133 countries,44 of which are international and 17 regional data.In regard to transparency and disclosure policies,trends reveal a steady increase in their number since the early 2000s,with the majority being implemented on a voluntary basis.In connection to this,the database show

51、s that the GRI Standards are the most widely referenced framework.Overview of corporate sustainability reporting frameworks and initiatives For this analysis,the GRI Standards were selected for their leading global and regional adoption.However,there are other established sustainability reporting fr

52、ameworks:Sustainability Accounting Standards Board(SASB):SASB Standards help companies disclose sustainability information relevant to their investors.Available for 77 sectors,the SASB Standards identify the sustainability-related risks and opportunities that are most likely to affect an entitys cas

53、h flows,access to finance and cost of capital over the short,medium or long term.As of August 2022,the International Sustainability Standards Board(ISSB)of the International Financial Reporting Standards(IFRS)Foundation assumed responsibility for the SASB Standards.The ISSB has committed to maintain

54、,enhance and evolve the SASB Standards and encourages preparers and investors to continue using them.International Sustainability Standards Board(ISSB):The Trustees of the IFRS Foundation Formed the ISSB on 3 November 2021 at COP26,in Glasgow.The ISSB is developing standards,in the public interest,t

55、hat will result in a high-quality,comprehensive global baseline of sustainability disclosures focused on the needs of investors and the financial markets.The ISSB has garnered international support to develop sustainability disclosure standards with a financial materiality focus backed by the G7,the

56、 G20,the International Organization of Securities Commissions(IOSCO),the Financial Stability Board,African Finance Ministers and Central Bank Governors from more than 40 jurisdictions.Because the ISSB was established in 20212022,it does not yet feature in company reports.In addition,a new European d

57、irective requiring companies to disclose information on impacts,risks and opportunities arising from social and environmental issues resulted in the production of a sustainability reporting framework,which is expected to have an effect globally:Corporate Sustainability Reporting Directive(CSRD)and t

58、he European Sustainable Reporting Standards(ESRS):In April 2021,the European Commission adopted a legislative proposal for the CSRD that requires companies within its scope to report using a double materiality perspective in compliance with ESRS.Under the CSRD,the European Financial Reporting Adviso

59、ry Group(EFRAG)was appointed as technical adviser to the European Commission to develop the ESRS.The reporting requirements will be phased in over time for different categories of companies.The first companies falling under the requirements must apply the standards in financial year 2024,for reports

60、 published in 2025.Listed SMEs are obliged to report as of 2026,with a further possibility of voluntary opt-out until 2028,and will be able to report according to separate,proportionate standards that EFRAG is expected to develop.How to strengthen corporate accountability:the case for unlocking sust

61、ainable corporate performance through mandatory corporate reporting 10 The interplay between corporate sustainability reporting and corporate sustainability performance Companies committed to disclosing sustainability information often have a higher incentive to better perform as they aim to align t

62、heir actions with their public declarations.However,when reporting,companies may highlight their positive results while,downplaying the negative aspects,creating an impression of good performance through more disclosure.Some companies may be even found engaging in“greenwashing,”selectively sharing i

63、nformation to shape stakeholder perceptions.This shows that disclosure itself is not enough to ensure sustainability of corporate practices.Therefore,there should be mechanisms that focus on making disclosure accurate,comprehensive and consequential.Company interaction with stakeholders impact how t

64、hey manage their sustainability risks The reciprocal relationship between corporate sustainability performance and disclosure plays a pivotal role in shaping how companies interact with stakeholders and manage their societal responsibilities.When companies demonstrate strong sustainability performan

65、ce and effectively address ESG issues,they show they care about the stakeholder expectations.Stakeholders then build more trust and expect increased transparency,prompting companies to take on more ESG initiatives aimed at improving performance.How to strengthen corporate accountability:the case for

66、 unlocking sustainable corporate performance through mandatory corporate reporting 11 The relation between WBAs CSI scores and GRI Standards This chapter examines the relation between the corporate sustainability reporting using the GRI Standards and corporate sustainability performance,measured by

67、WBA CSI scores.The main hypothesis checked empirically is that companies reporting in accordance with the GRI Standards achieve better results in the WBA Social Benchmark.The analysis was based on publicly available company data sourced from company sustainability,ESG and annual reports,websites or

68、other official company documents for the fiscal year 2022.Across its different benchmarks,WBA managed to collect CSI data for 1,665 out of the 2,000 keystone companies,representing 83%of the SDG2000 companies.CSI performance was then compared against GRI reporting practices.GRI distinguishes two typ

69、es of uses:reporting in accordance with the GRI Standards,thereby meeting the full set of requirements;reporting with reference to the GRI Standards.Notably,while there are two reporting options recognized in the GRI Standards,a number of companies have used alternative terminology to indicate their

70、 use of the Standards.Information has also been collected related to this third option,categorized as Other.A handful of companies published a GRI index but did not include a statement of use such as in accordance or with reference.Finally,not all companies among the WBAs SDG2000 used GRI Standards.

71、As a result,six different scenarios were identified with respect to how companies have used a GRI content index(Figure 1).FIGURE 1:COMPANY USE OF GRI CONTENT INDEX How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reportin

72、g 12 Analysis and key findings Descriptive analysis of data suggests a correlation between CSI scores&presence of a GRI index Figure 2 illustrates a scatter plot on the relationship between CSI scores and the GRI content index.Among the companies analysed,59%have published a GRI content index,while

73、the remaining 41%have not.These findings are comparable with the higher adoption rates of GRI Standards as highlighted in the KPMG Survey,where 78%among the G250 and 68%of the N100 companies have adopted these standards.Slightly lower adoption rate of 59%may stem from WBA examining companies irrespe

74、ctive of ownership type,while the KPMG Surveys focused solely on large public companies.Therefore,company ownership is a factor influencing the CSI scores.FIGURE 2:CSI SCORES AND GRI CONTENT INDEX Companies publishing a GRI index have higher average CSI scores Companies that publish a GRI content in

75、dex boast an average CSI score of 6.1,double the average score of those who do not,as illustrated by Figure 2.Figure 3 features instead a density plot showing the distribution of CSI scores among companies with and without a GRI content index.The plot reveals that companies using the GRI Standards g

76、enerally cluster around the average CSI scores.Notably,as the CSI score exceeds 2.3,companies with a GRI content index become more common.In contrast,below a CSI score of 2.3,the concentration of companies without a GRI index increases.This suggests that companies with lower CSI scores are more like

77、ly not to have a GRI content index.Additionally,84%of companies with a zero CSI score are those who do not publish a GRI content index.Reporting in accordance with the GRI Standards correlates with higher CSI scores The study shows that companies reporting in accordance with the GRI Standards tend t

78、o have an average CSI score of 6.6,surpassing the average score of companies reporting with reference to the How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 13 GRI Standards by 11.9%,and significantly exceeding

79、(+26.9%)the scores of those employing alternative terminology.Additionally,companies reporting with reference to the GRI Standards demonstrate relatively superior performance in the CSIs,boasting an average score of 5.9,which is 13.5%higher than that of their counterparts using alternative terminolo

80、gy.Figure 3 shows a clear trend:companies that report in accordance with the GRI Standards and publish a content index tend to have higher CSI scores than companies that reference GRI or use alternative terms.The plot also reveals that companies with lower CSI scores are more common among those with

81、 less stringent GRI reporting.FIGURE 3:CSI SCORES AND GRI LEVEL OF DISCLOSURE These findings point to an association between complying with all the requirements under the GRI Standards and stronger performance in the CSIs.Average CSI scores are also higher for companies that mention GRI in their rep

82、orting but do not have an index,compared to those without an index or GRI mention at all.(Figure 4)FIGURE 4:AVERAGE CSI SCORE BY INDEX AND STATEMENT TYPE How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 14 In or

83、der to statistically test the relationship between GRI reporting and corporate performance against the CSIs,four cross-sectional regression models were built(Annex 3).The models suggest that between 55%and 59%of the systematic cross-sectional variations in CSI scores can be explained by GRI disclosu

84、re and other company attributes.Figure 5 summarizes the results of the regression.FIGURE 5:REGRESSION RESULTS How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 15 Positive correlation between corporate disclosure

85、 and social performance is statistically significant Companies that publish a GRI content index tend to demonstrate statistically significant higher CSI scores.On average,companies with a GRI content index score 47.3%*higher than similar companies without such an index.*(Computed using 100(exp(1)-1)

86、.Furthermore,when examining the extent of GRI disclosure,companies referencing the GRI Standards in their reports tend to exhibit higher CSI scores compared to those that do not.This holds true even for companies that mention GRI without publishing a content index,but the difference is particularly

87、notable for companies using it.How companies articulate their use of GRI Standards significantly impacts CSI scores.Specifically,companies that report in accordance with the GRI Standards demonstrate statistically higher scores compared to their counterparts reporting with reference or using alterna

88、tive terminology.Interestingly,companies publishing a GRI content index without an explicit statement of use exhibit higher scores relative to the reference group,surpassing even those reporting in accordance with GRI.This suggests that the quality of reporting and adherence to the GRI Standards is

89、high even without an explicit statement of use.While most companies that performed well in the CSIs use GRI Standards,others use different reporting frameworks Among the top 100 companies with the highest CSI scores,over 84%use the GRI Standards.Of those lacking a GRI content index,65%adhere to the

90、SASB Standards,with the remaining companies referencing other reporting frameworks.This suggests that adherence to an established sustainability reporting framework in general is associated with higher social sustainability performance.Companies must transcend mere compliance and strive to improve t

91、he quality of their reporting For instance,considering GRI 207:Tax 2019,of the 977 companies that disclose a GRI content index,only 114,representing less than 12%,meet the requirements fully.The disclosure GRI 207-4 within GRI 207:Tax 2019 mandates reporting financial,economic and tax-related inform

92、ation for each operational jurisdiction.In the CSI assessment,this aligns with CSI 16c under responsible tax fundamentals.The low compliance figure may be attributed to the stringent nature of this requirement,which asks for information on taxes paid across all jurisdictions.Among the 863 companies

93、that did not respond to this requirement,about 7%reported tax payments to several specific jurisdictions,aggregating payments from others.A notable majority,roughly 93%,failed to provide a breakdown of tax payments by country.This shows how completeness of disclosure under the GRI 207 would have imp

94、roved the scores in the CSI assessment in this case.How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 16 Company attributes and location as determinants of CSI scores&sustainability performance They also influenc

95、e their social performance Larger companies are often expected to demonstrate a stronger commitment to sustainability and acting responsibly due to heightened societal expectations.While regression results support this notion,the effect size is relatively modest.Specifically,a 10%increase in revenue

96、 raises CSI scores by only about 1%.Ownership structure significantly impacts sustainability performance.Findings reveal that public companies typically exhibit about double the CSI scores of government-owned counterparts,holding other variables constant.(Figure 5)The ownership structure of companie

97、s dictates their primary accountability.Publicly listed firms,primarily accountable to investors,face increased pressure to consider global ESG expectations.They are also more likely to adopt established reporting standards,unlike state-owned or private enterprises.Companies based in upper-middle an

98、d high-income countries generally attain superior CSI scores compared to those in low-income countries.Likewise,companies headquartered in lower-middle-income countries also exhibit higher scores,albeit to a lesser degree.This trend may be attributed to institutional shifts across various aspects of

99、 the business landscape,and slower development of sustainability regulations in low-income countries.Additionally,companies headquartered in countries that have implemented voluntary policies citing GRI Standards tend to have higher scores.This highlights the importance of implementing mandatory rep

100、orting policies to enhance corporate performance.Significant disparities exist among countries in terms of ESG performance and reporting practices Figure 6 offers a visual representation of the average CSI scores for each country,alongside the percentage of companies headquartered there that publish

101、 a GRI content index.A discernible trend emerges,consistent with our earlier findings:countries with a higher proportion of companies adhering to the GRI Standards tend to achieve higher CSI scores.Of particular interest is the prevalence of elevated CSI scores and GRI disclosure in certain regions

102、Companies headquartered in Europe and Central Asia tend to achieve higher scores than those with similar characteristics headquartered in other regions(Figure 6)The disparity is most pronounced when compared to similar companies in China,and least pronounced when compared to those in the Americas.Th

103、is trend may be attributed to the growing number of regulatory initiatives in the European Union(EU),particularly the CSRD,which requires both EU and certain non-EU companies operating in the EU to submit annual sustainability reports.Among countries in the European region,Denmark,France and the Uni

104、ted Kingdom companies have lower incidence of publishing a GRI content index,and yet achieve high CSI scores.This may be explained by the adoption of other reporting frameworks,or by adhering to national reporting regimes.For example,in Denmark,entities covered under specific sections of the Danish

105、Financial Statement Act are obliged to include reports on social responsibility issues as part of their financial statements.How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 17 FIGURE 6:AVERAGE CSI SCORES AND SH

106、ARE OF COMPANIES WITH GRI CONTENT INDEX,BY COUNTRY Non-European countries like Australia,Thailand,Colombia and Brazil reveal a similar pattern Companies from these countries have mean CSI scores above average,while also more than 50%of them use the GRI Standards.This trend may be attributed to count

107、ry-specific sustainability reporting initiatives and regulations.For instance,the Stock Exchange of Thailand(SET)published the Sustainability Reporting Guide for Listed Companies,which references the GRI Standards.The Guide provides a mapping of the national requirements to GRI disclosures and encou

108、rages listed companies to disclose information in accordance with the GRI Standards.How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 18 Companies headquartered in China typically demonstrate lower CSI scores.The

109、 analysis reveals that companies from China tend to exhibit notably lower scores compared to those headquartered in Europe and Central Asia.However,it is important to indicate that CSI assessments are limited to disclosures published in English,potentially underrepresenting the performance of Chines

110、e companies.As a result,the disparity in scores between Chinese companies and their European counterparts is more pronounced than the differences observed between other regions and Europe.(Figure 7)Among the 221 companies who scored 0 in the CSIs,37%(82 companies)are headquartered in China.Moreover,

111、out of the companies scoring zero in CSI,but publishing a GRI content index,68%(23 companies)are headquartered in China.(Figure 7)FIGURE 7:COMPANIES WITH ZERO CSI SCORES BUT WITH GRI CONTENT INDEX,BY COUNTRY All Chinese companies with 0 CSI score who publish a GRI content index report in English.Abo

112、ut a third report either in accordance with,or with reference to the GRI Standards,while approximately 61%use alternative terminology.Scoring zero in the CSIs despite having a GRI content index may indicate a potential issue with the quality of reporting.The analysis also revealed a correlation betw

113、een CSI scores and the presence of GRI content index across the different WBA benchmarks The industry of the company may influence it publishing a GRI content index.For instance,the Digital Inclusion Benchmark(DIB),predominantly comprising companies in the information and communication sectors,exhib

114、ited the highest GRI content index prevalence(69%)along with the highest average CSI score(5.7).Conversely,companies in the Financial System Benchmark(FSB)had the lowest GRI index prevalence(49%)as well as the lowest average CSI score(3.8).(Figure 8)How to strengthen corporate accountability:the cas

115、e for unlocking sustainable corporate performance through mandatory corporate reporting 19 FIGURE 8:CSI AVERAGE SCORE AND GRI CONTENT INDEX AVAILABILITY BY WBA BENCHMARK How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate re

116、porting 20 Recommendations for UN Member States 1.Promote the adoption of mandatory sustainability reporting standards:UN Member States should endorse and incentivize the adoption of reporting standards among companies,fostering a culture of transparency and accountability.2.Strengthen monitoring:UN

117、 Member States must develop mechanisms to monitor and enforce the adherence to the reporting standards,ensuring penalties for non-compliance.3.Enhance stakeholder engagement:emphasize the importance of meaningful stakeholder engagement in corporate sustainability reporting,ensuring that all perspect

118、ives are considered,and relevant topics are prioritized.4.Facilitate capacity building:provide support and resources to help companies,especially small and medium-sized enterprises(SMEs),effectively implement sustainability reporting standards and navigate reporting complexities.5.Encourage investor

119、 engagement:mandate that institutional investors and asset managers prioritize sustainability considerations in investment decisions,leveraging their influence to drive corporate accountability.6.Make companies aware of the importance of reporting standard indices for comparability and assessment:co

120、mpanies should publish an index helping to locate the reported information,enabling an easier access to the data in the reports.Furthermore,companies can better compare their results with those of their peers if all use a common reporting index.Conclusion The United Nations Summit of the Future 2024

121、 presents a unique opportunity to catalyse collective action towards sustainable development and enhanced corporate accountability.By advocating for corporate sustainability reporting and leveraging the GRI Standards,Member States can empower businesses to align with global sustainability objectives

122、,driving positive impact and ensuring a more resilient and equitable future for all.How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 21 Annex 1.WBAs core social indicators Respect human rights Max.pts Provide an

123、d promote decent work Max.points Act ethically Max.points 1.Commitment to respect human rights 1 9.Health and safety fundamentals 1 15.Personal data protection fundamentals 1 2.Commitment to respect the human rights of workers 1 10.Living wage fundamentals 1 16.Responsible tax fundamentals 1 3.Ident

124、ifying human rights risks and impacts 1 11.Working hours fundamentals 1 17.Anti-bribery and anti-corruption fundamentals 1 4.Assessing human rights risks and impacts 2 12.Collective bargaining fundamentals 1 18.Responsible lobbying and political engagement 1 5.Integrating and acting on human rights

125、risks and impacts 2 13.Workforce diversity disclosure fundamentals 1 6.Engaging with affected and potentially affected stakeholders 1 14.Gender equality and womens empowerment fundamentals 1 7.Grievance mechanisms for 1 8.Grievance mechanisms for external individuals and communities 1 Max.points 10

126、Max.points 6 Max.points 4 Total points available=20 How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 22 Annex 2.Mapping of CSI to GRI CSI GRI Description 1,2,9,14 GRI 2-23 Policy Commitments 7,17 GRI 2-25 Proces

127、ses to remediate negative impacts 7,17 GRI 2-26 Mechanisms for seeking advice and raising concerns 6 GRI 2-29 Approach to Stakeholder engagement 12 GRI 2-30 Collective bargaining agreements 17 GRI 205-1 Operations assessed for risks related to corruption 17 GRI 205-2 Communication and training about

128、 anti-corruption policies and procedures 16 GRI 207-1 Approach to tax 16 GRI 207-2 Tax governance,control,and risk management 16,18 GRI 207-3 Stakeholder engagement and management of concerns related to tax 16 GRI 207-4 Country-by-country reporting 3,4 GRI 3-1 Process to determine material topics 4

129、GRI 3-2 List of material topics 1,2,4,5,9,14,17,18 GRI 3-3 Management of material topics 9 GRI 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships 9 GRI 403-9 Work-related injuries 13,14 GRI 405-1 Diversity of governance bodies and empl

130、oyees 14 GRI 405-2 Ratio of basic salary and remuneration of women to men 4 GRI 414-2 Negative social impacts in the supply chain and actions taken 18 GRI 415-1 Political contributions How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandato

131、ry corporate reporting 23 Annex 3.Regression Specification In order to test the relationship between CSI performance and GRI disclosure,and identify the factors influencing CSI performance,the following econometric models were employed:=1+2+3+4+5+6+7+8+=1+3+4+5+6+7+8+Where is the total CSI score of

132、the company,while is a dummy variable of whether a company has a GRI content and index or not.Other determinants of corporate performance were included as follows:=dummy variable of engagement with WBA =dummy variable for company ownership =dummy variable for region where headquarters is located =du

133、mmy variable for income class of the country of headquarters =number of voluntary national policies mentioning GRI =number of mandatory national policies mentioning GRI Moreover,the inclusion of as a proxy for company size was considered.A prevalent argument in the literature suggests that larger fi

134、rms tend to demonstrate greater commitment to corporate social perfromance.This perspectic posits that larger firms face heightened societal expectations to engage in socially responsible activities.Given that not all companies disclose revenue figures,two models were estimated:one incorporating the

135、 revenue variable and another excluding it.Both CSI scores and revenues underwent an inverse hyperbolic sine(IHS)transformation.This transformation operates similarly to a logarithm but retains observations with zero values.Additionally,the model is extended to look into level of GRI disclosure,as f

136、ollows:=1 +2+3+4+5+6+7+8+=1 +3+4+5+6+7+8+Where is a dummy variable for GRI level of disclosure,where 0=no index,no statement;1=no index,other statementl 2=with index,no statement;3=with index,other statement;4=with index,with reference;5=with index,in accordance.To ensure the reliability of the regr

137、ession findings,a thorough regression diagnostics process was conducted.The results are presented in Annex 3,Table 1.The findings from the Studentized Breusch-Pagan Test indicate rejection of the null hypothesis of heteroskedasticity at the 1%significance level,necessitating consideration of heteros

138、kedasticity in the regression analysis.Therefore,robust standard errors were employed for all four models.Furthermore,tests were conducted to assess the independence of residuals and the presence of multicollinearity.The results indicate no correlation among residuals and no multicollinearity across

139、 all models.How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 24 TABLE 1.REGRESSION DIAGNOSTICS Test Test Type Stat Probability Remark Model 1 Heteroskedasticity Studentized Breusch-Pagan Test 136.05 2.2e-16*Hete

140、roskedastic Independence of Residuals Durbin-Watson Test 1.99 0.396 No correlation Multicollinearity GRI Dummy Revenue Engagement Ownership Income class Region GRI(mandatory)GRI(voluntary)Squareroot of GVIF 1.07 1.07 1.06 1.05 1.20 1.20 1.28 1.18 No multicollinearity Model 2 Heteroskedasticity Stude

141、ntized Breusch-Pagan Test 142.89 2.2e-16*Heteroskedastic Independence of Residuals Durbin-Watson Test 2.05 0.36 No correlation Multicollinearity GRI Dummy Engagement Ownership Income class Region GRI(mandatory)GRI(voluntary)Squareroot of GVIF 1.11 1.07 1.07 1.19 1.20 1.29 1.18 No multicollinearity M

142、odel 3 Heteroskedasticity Studentized Breusch-Pagan Test 143.86 2.2e-16*Heteroskedastic Independence of Residuals Durbin-Watson Test 1.98 0.686 No correlation Multicollinearity GRI disclosure level Revenue Engagement Ownership Income class Region GRI(mandatory)GRI(voluntary)Squareroot of GVIF 1.03 1

143、.07 1.06 1.05 1.20 1.21 1.28 1.19 No multicollinearity Model 4 Heteroskedasticity Studentized Breusch-Pagan Test 161.79 2.2e-16*Heteroskedastic Independence of Residuals Durbin Watson Test 2.04 0.396 No correlation Multicollinearity GRI disclosure level Engagement Ownership Income class Region GRI(m

144、andatory)GRI(voluntary)Squareroot of GVIF 1.04 1.07 1.08 1.20 1.21 1.19 1.29 No multicollinearity How to strengthen corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 25 Table 2 presents the results of the regression analysis.The a

145、djusted multiple coefficients of determination values range from 0.5580 to 0.5894,suggesting that between 55%to 59%of the systematic cross-sectional variation in CSI scores can be explained by GRI disclosure and other company attributes.The significant F-statistic across all models indicate a linear

146、 relationship between the dependent and the explanatory variables.TABLE 2.REGRESSION RESULTS Model 1 Model 2 Model 3 Model 4 GRI content Index 0.3875*0.4958*GRI level No index,no statement(reference)No index,other statement With index,no statement With index,other statement With index,with reference

147、 With index,in accordance 0.1636*0.4952*0.3399*0.4209*0.4780*0.2656*0.6630*0.4480*0.5427*0.6055*Revenue 0.0987*0.0982*Engagement 0.3745*0.4582*0.3766*0.4639*Ownership Government(reference)Private Public 0.1043 0.6373*-0.0245 0.6982*0.1256*0.6325*-0.0073 0.6834*Income class Low income(reference)Lower

148、 middle income Upper middle income High income 0.7752*1.0811*1.0169*0.8024*1.0625*1.1174*0.7548*1.0306*1.0061*0.5668 0.8030*0.8933*Region Europe and Central Asia(reference)Asia and the Pacific Americas China Middle East and Africa -0.3941*-0.1929*-1.6135*-0.3989*-0.3839*-0.2063*-1.3320*-0.3612*-0.38

149、41*-0.1678*-1.5534*-0.3677*-0.3746*-0.1794*-1.2747*-0.3140*Mandatory Policy-0.0044-0.0100-0.0081 0.0151 Voluntary GRI Policy 0.0196*0.0239*0.0195*0.0236*C-0.5729 0.1285-0.5941*0.3140 Adjusted R2 F-stat 0.558 131(2.2e-16*)0.5808 176.5(2.2e-16*)0.5622 103.8(2.2e-16*)0.5894 139.6(2.2e-16*)How to streng

150、then corporate accountability:the case for unlocking sustainable corporate performance through mandatory corporate reporting 26 ACKNOWLEDGEMENTS This report was co-authored by GRI and the World Benchmarking Alliance,with the primary research led by WBAs SDG2000 team,Danileen Kristel Parel-Cadag and

151、Michael Minges,and input provided by Margarita Lysenkova and Peter Paul van de Wijs from GRI.For WBA contributions were made by Gerbrand Haverkamp,Rachel Leung,Dara Karakolis,Charlotte Reeves,Ana Colazo and Richard Gardiner.COPYRIGHT This work is the product of the World Benchmarking Alliance.Our wo

152、rk is licensed under the Creative Commons Attribution 4.0 International License.To view a copy of this license,visit:www.creativecommons.org/licenses/by/4.0/DISCLAIMER Information available on our website,visit:www.worldbenchmarkingalliance.org/disclaimer WORLD BENCHMARKING ALLIANCE Prins Hendrikkade 25,1021 TM Amsterdam The Netherlands.www.worldbenchmarkingalliance.org