By Sarah Sabaratnam
New Straits TimesAugust 6, 2002
"A good company delivers excellent products and services; a great one does all that and strives to make the world a better place." - Ford Motor Company chairman Bill Ford
THERE is a concerted effort to persuade businesses in Malaysia and other countries in this region to be transparent about the impact of their activities on society and the environment.
This is done through sustainability reporting and requires companies to boldly declare, in the form of a report, how much waste they generate, how much destruction they cause to the environment, and what measures they have undertaken to be a responsible corporate citizen.
The first form of such reporting was introduced in the early 1990s. In 1997, the Coalition for Environmentally Responsible Economies together with the United Nations Environment Programme convened the Global Reporting Initiative which developed a process for reporting on the economic, environmental and social performances of corporations, financial institutions and civil society. The GRI guidelines are fast being accepted as an international standard and recently, a regional conference on the current and future status of the GRI in Asia was held at the Renaissance Hotel in Kuala Lumpur.
Science, Technology and Environ-ment Minister Datuk Seri Law Hieng Ding proposed that all companies develop and improve their environmental accounting. He hoped they would report the impact of their economic activities on the environment in their annual reports.
According to Dr Allen White, acting chief executive of GRI, who presented a paper at the conference, business and society are interconnected and cannot exist independently. As such businesses need to be accountable for their actions and society deserves to know rightfully what is happening in their backyard.
Dr Aditi Haldar, senior environ-mental scientist of Development Alternatives, India, believes that as sustainability reporting is now a trend, corporations that do not report will lose their competitive edge.
As of 2001, 40 of the companies listed on the KLSE main board have produced some form of environmental reporting. What's more, in Malaysia an environmental reporting award is being introduced by the Association of Chartered Certified Accountants. Soon, sustainability reporting will become a norm as the benefits are also economic.
A company that audits its environmental performance will know how much energy it is using and wasting, and can take measures to reduce this waste, thus reducing cost. It will look into measures like reducing toxic or oil spills, saving it millions of ringgit in clean-up measures.
A society that is richer will be more demanding and more health conscious and will reject companies that are not in line with these values, thus companies that do not conform are bound to lose out.
Christine Loh, chief executive officer of Civic Exchange in Hong Kong, believes companies need to start looking within themselves and think about what steps they need to take. "What are our core missions. What are our values? Is sustainability one of them? Do we need to change how we operate?" She says companies need to go beyond being defensive and start to embrace a more proactive approach in corporate governance.
This can be done simply by aligning business values, goals, strategies and decision-making structures with sustainability. In achieving a sustainable future for all, all stakeholders, whether private or public, non-governmental, individuals and communities, work together.
The public should demand that certain standards be met; NGOs can act as think tanks; the government must enforce and hold industries accountable while private entities need to give back to societies they reap resources from and consider public interest in the pursuit of profits.
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