Mandatory sustainability reporting in Swedish state-owned companies:
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1 Mandatory sustainability reporting in Swedish state-owned companies: Perspectives and consequences EARTO 2010 Magnus Frostenson Karolina Windell Tommy Borglund Department of Business Studies, Uppsala University
2 Background Government initiative in late 2007 Mandatory sustainability reporting in all state-owned companies from 2008 Comply or explain principle Concerns some 50 companies The Global Reporting Initiative (GRI) standard to be used External verification required
3 GRI reporting relatively new to the state-owned companies What experience did you have of sustainability reporting (CSR managers)?
4 Our research project The Department of Business Studies at Uppsala University commissioned by the Ministry of Enterprise, Energy and Communications to examine the effects of the reform in Swedish state- owned companies in particular with regard to organizational changes, processes and effects on core business Final report due 30 June 2010 Conference participation at European Business Ethics Conference, Trento, Italy, September 2010
5 Methodology Questionnaire to two different key groups Chairmen of boards CSR managers or the equivalent Qualitative interviews CSR managers of the equivalent
6 Preliminary findings Increased awareness of sustainability reporting and GRI Increased focus on sustainability issues in state-owned companies Tendency towards structuration of processes for sustainability
7 Increased awareness of sustainability reporting and GRI 100% of the chairmen of the boards aware of the new guidelines
8 Increased focus on sustainability issues in state-owned companies Guidelines reason for discussing sustainability issues in boards
9 Increased focus on sustainability issues in state-owned companies (2) The guidelines contribute to raising the issue (of sustainability). It gets more fuel and attention (CFO) We now have to figure out what we should work with. It (the sustainability issue) has become more visible in the company (Communication manager) The areas that have come most into focus are according to the CSR managers 1) Environment 2) Internal ethical issues
10 Increased focus on sustainability issues in state-owned companies (3) To what degree has sustainability become a top management issue in your company (CSR managers)?
11 Tendency towards structuration of processes for sustainability (We now) work continuously and in a structured way with sustainable development in our business (Chairman of board) The biggest change is that planning and follow-up is more systematic now (Chairman of board) Working with sustainability issues is a continuous process that has been going on for several years. The guidelines have not affected this directly, but through them our reporting has been structured in a better way (Chairman of board) A more structured way to deal with the issues, to put them into a context (Communication manager) It has become better structured and also more focused on certain problem areas (CSR manager)
12 Do the guidelines affect core business? Sustainability reporting does not necessarily change core business processes
13 But still, processes within some areas are said to have changed 1) Environment 2) Purchasing 3) HR 4) Communication
14 Some effects are visible Increased demands on suppliers (Chairman of board) New issues, for example a new purchasing policy (Communication manager) Enviromental issues. We have begun to work more with environment. (Communication manager) Stakeholder dialogues have been improved (CSR manager) (When working with the sustainability report) we may reconsider for example how we should structure our purchasing processes. Without it I don t think such issues would have come up. (Communication manager)
15 Drawbacks? Using GRI and external verification becomes too much for us, a bad priority (Communication manager) Reference to costs Relevance of indicators
16 Sustainability reporting seems to imply positive effects in the organizations More positive than negative chairmen of boards
17 Some preliminary conclusions and reflections Sustainability reporting requires a learning process: its utility is not perceived at once but may be an important aspect in the development of sustainable processes Sustainability reporting is a tool for transparency; as such it rarely affects core business processes or organizational structures, but it may play a role in a wider context of sustainability Sustainability reporting and processes for sustainability may exist as separate entities (the one existing without the other), but at least in some state-owned companies it is clear that the government guidelines trigger processes for sustainability; there is a connection Active translation of GRI indicators necessary to create relevance and commitment in organizations
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