Goal 12. Indicator Number and Name: Number of companies publishing sustainability reports. Agency: UNCTAD, UN Environment
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1 Goal 12 Target number: 12.6 Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle Indicator Number and Name: Number of companies publishing sustainability reports Agency: UNCTAD, UN Environment Has work for the development of this indicator begun? Yes. SDG indicator counts the number of companies publishing sustainability reports. Progress in the development of the methodology for the indicator has highlighted a number of challenges in the definition of specific aspects, such as the definition of companies, of sustainability reports and the integration of quality considerations for what constitutes a "sustainability report", in line with the goal of ambition of target 12.6 to foster the adoption of sustainable practices by business. The Member Governments of the Group of Friends of Paragraph 47 (GoF47), a group of countries committed to advancements in the area of sustainability reporting, formulated a request to its secretariat, provided by UN Environment, to support the development of metadata inputs for SDG indicator , in cooperation with UNCTAD. This request is also aligned with the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting s (ISAR) call on UNCTAD to conduct further work with a view to identifying good corporate reporting practices on the SDGs and facilitation of harmonization of sustainability reporting. Building on such requests, UNCTAD and UN Environment embarked on a collaboration to provide substantive inputs for the development of an indicator that measures the contribution of companies to sustainable development across the SDGs. The collaboration seeks to determine core universal indicators for corporate sustainability reporting that connect corporate reporting with the SDG global indicator framework. The objective is to enhance the comparability of current reporting approaches and methodologies and to allow for better alignment of corporate activities with the SDGs. The expected outcomes include, on the one hand, facilitating the integration of sustainable practices by companies (SDG 12.6) in alignment with the SDGs and, on the other, facilitating governments task of follow-up and review of the SDGs through higher quality and comparable information emerging from corporate reports. This work was presented at the thirty-third session of ISAR (October 2016), and will be further discussed at the upcoming thirty-fourth session (November 2017). During the intersessional period (March 2017), UNCTAD and UN Environment organized a consultative group meeting that also discussed SDG indicator , and provided input for a revised version of the draft methodology for the measurement of the indicator. Who are the entities, including national and international experts, directly involved and consulted in developing the methodology/and or data collection tools? 1) UN Environment: Elisa Tonda, Head, Consumption and Production Unit, elisa.tonda@unep.org; and Jillian Campbell, Statistician, Sustainable Development Goal Data and Information Unit, Science Division, Jillian.campbell@unep.org 2) UNCTAD: Tatiana Krylova, Head, Enterprise Branch; and Steve MacFeely, Head, Statistics and Information, Division on Globalization and Development Strategies 3) Governments, in particular Governments of the GoF47 4) Experts and delegates from ISAR 5) Sustainable Stock Exchanges Initiative
2 6) Other non-governmental organisations working in the area of sustainability reporting, such as the International Integrated Reporting Council, the Global Reporting Initiative, CDP, the Climate Disclosure Standards Board, among others. 7) Private sector leaders What is the involvement of or how do you plan to involve National Statistical Systems in the development of the methodology? Representatives from National Statistical Systems have been involved in the development of metadata for this indicator through ISAR sessions and the UNCTAD-UN Environment consultative group on sustainability reporting. However, further involvement is necessary in the development of the indicator. As part of the workplan, Statistical Offices as well as other relevant counterparts in national Governments will be reached out through a questionnaire / survey. An additional meeting with a broader expert group is also being planned before the end of the year. Its planning will specifically aim at engaging more closely and extensively Statistical Offices. In particular, experts from National Statistical Offices have a very critical role to play in providing inputs on the conceptual definition of companies and "sustainability reports," on their current practices of consolidating information and data generated by businesses, as well as institutional aspects of data collection and conservation. Please briefly describe the process of developing the methodology for the indicator The work is co-led by UN Environment and UNCTAD, in close collaboration with other sustainability reporting stakeholders, and builds on the discussions with the consultative group on sustainability reporting (multi-stakeholder working group including other UN agencies, governments and relevant non-governmental organisations, as well as companies and report developers), ISAR, the Group of Friends of Paragraph 47 and other experts. During the meeting of the consultative group in March 2017, UNCTAD and UN Environment discussed the initial proposal of methodological guidance to measure indicator and an inventory of the sources of information that currently provide related data. The inventory exercise led to a working list of sources of information, and also addressed quality issues in the identification of a "sustainability report". The consultative group members specifically discussed the necessary definitions of terms in indicator , in particular sustainability reports, and provided some recommendations to the Agencies, including concrete experience in collecting such data. The findings of the discussion with the consultative group will be complemented by the information collected in the questionnaires submitted to Governments (reaching out to the network of National Statistic Offices and the network of the focal points of the 10 Year Framework of Programmes on Sustainable Consumption and Production Patterns) to assess current practices in the country, existing sources of data (if any), the potential need to implement changes to existing sources or to develop new ones, as well as ongoing experience in measuring target The outcomes will provide the elements to strengthen the proposal of the metadata to measure indicator , which will be discussed further at ISAR sessions (November 2017) and one additional expert meeting to be planned before the end of the year. Testing and validation of the proposal of metadata guidance will be carried out in selected countries, through existing projects financially supported by UN Environment, UNCTAD and UN DESA. It is envisaged that a minimum of six countries (both developed and developing) will be involved in the
3 testing, whose results are expected to be completed by April 2018 and thereby inform the final proposal of the methodology to measure indicator Please indicate new international standards that will need to be proposed and approved by an intergovernmental process (such as UNSC) for this methodology. Although currently there is no global consensus in this area, the methodology will require a minimum baseline definition for what constitutes a company and a "sustainability report". UNCTAD and UN Environment, supported by the consultative group and guided by the experience developed in the countries, will provide such a definition in a revised version of the metadata guidance. When do you expect the methodological work on this indicator to be completed? The work related to the development of metadata for the indicator is expected to provide a proposal of methodology by mid Such proposal will be further refined through testing and validating in countries, as follows: October 2017 October - November 2017: October 2017 March 2018: November December 2017 April 2018 Distribution of questionnaires (survey) to governments and gathering of feedback and analysis of the findings Formulation of an advanced proposal of metadata for indicator Testing of proposal of metadata for indicator in a minimum of 6 developed and developing countries Meeting of consultative group, experts involved in the testing and national statistical offices to discuss progress in the development of the methodological proposal for indicator Consolidation of the revised version of the methodological guidance for measuring indicator , which incorporates feedback from the testing phase. Are data and metadata already being collected from the National Statistical System for one or more components of this indicator? National Statistical Systems are currently not consistently collecting data or metadata for this indicator. However, a number of sources of information on corporate sustainability reporting have been developed and have been mapped for the purpose of the development of the indicator. An initial overview of the categories of data sources is provide in the following point. If yes, please describe: Indicatively, the following data sources will be taken into consideration, at a minimum: - National repositories of sustainability reports. Examples include France s governmental portal info-financiere.fr, Corporate Social Responsibility Centre Pakistan s database ( or the Netherlands-focused website sustainability-reports.com. The German Sustainability Code Database includes reporting companies declarations of conformity with the German Sustainability Code, some of which provide direct links to the companies sustainability reports; - Stock exchanges where the publication of a sustainability report is a listing requirement for companies. Examples include BM&F Bovespa s Corporate Sustainability Index (ISE) in Brazil, or the Johannesburg Stock Exchange s Socially Responsible Investment Index in South Africa; - Sector-specific initiatives (national, regional or international), including by industry/business associations. Industry-specific examples include the sustainability reports of member
4 companies of the Cement Sustainability Initiative (CSI) or the International Petroleum Industry Environmental Conservation Association (IPIECA); - National Statistical offices that collect data from companies on environmental issues and labour related statistics; - Financial market authorities or other monitoring authorities that require companies to provide them with annual reports on a regular basis, which could also include sustainability information. - The CDP database of reports made on the topics of water, climate and deforestation; - The Corporate Register database, which tracks, among others, companies referencing and aligning with the International <IR> Framework; - The GRI Sustainability Disclosure Database; - Bloomberg ESG Disclosure scores via ESG <GO>; and - Thomson Reuters ESG Indices. How do you plan to collect the data? The data collection methods will emerge from the multi-stakeholder consultative process and the testing in countries, as described above. Indicatively, the data sources listed above and other, similar sources may contribute to data collection. If the indicator involves multiple components from different data sources, please describe how each individual component of the indicator will be collected here. At the national level, indicator does not involve multiple components from different data sources. With what frequency is data expected to be collected? Indicatively, it is expected that data is collected on an annual basis. Taking into account publication dates of sustainability reports, the proposal developed by mid-2018 will recommend an ideal time in the year to collect information on indicator Is there a process of data validation by countries in place or planned for this indicator? Yes planned as reflected in the above list of activities. If yes, please briefly describe: As described above, Governments associated with the multi-stakeholder working group will be consulted throughout the metadata development process on the suitability of the metadata and the collection method. It is expected that the final metadata will be validated by all associated Governments. In addition, UN Environment is currently implementing the project Enhancing capacities to manage information from corporate sustainability reporting in Latin American countries, which is planned to be implemented from The project is supporting specific governments of the Group of Friends of Paragraph 47 (namely, Argentina, Brazil, Chile and Colombia) in implementing and measuring SDG target 12.6 by consolidating data from sustainability reporting at the national level. The project would enable testing data collection methods emerging from the discussion of the consultative group. In addition, UN Environment will support two additional countries from other geographic regions to join the governments involved in the testing of the methodology.
5 UNCTAD also expects to continue its capacity-building initiatives, including the Accounting Development Tool (ADT), in order to disseminate knowledge and good practices about sustainability reporting in the context of SDG target (as of September 2017)
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