Financial ExpertSpeak: Business today must adopt Global Reporting Initiative framework
Prakash (Sanju) Deenapanray, Director of Ecological Living In Action (ELIA), spoke to AfricaMoney about the widespread adoption of the Global Reporting Initiative (GRI) framework. He noted that businesses today must follow GRI reporting, given that the way organisations and society at large have been and are being run is not viable, as, on one hand, we are creating economic and financial wealth in abundance, but, on the other hand, we are destroying our environment and the redistribution of wealth among members of society is highly unequal.
Edited excerpts from an exclusive interview:
What is the GRI framework about?
The GRI framework is about providing a set of guidelines and protocol to public and private institutions or SMEs to manage a process that will culminate in reporting on their sustainability.
Has it been adopted by firms in Mauritius yet?
Absolutely. We already have firms complying with GRI reporting for over 4-5 years now. For example, we have Omnicane Ltd which was the first company to do so in Mauritius, and now, we also have Terra Mauricia Ltd adopting the GRI reporting framework. Besides, Lux Island Resorts and the Mauritius Institute of Directors (MIoD) are complying with GRI standards too. Additionally, there are many other local companies that have embarked on this process as well.
How is this framework important for businesses to abide by, and in what way does it help organisations?
The way businesses and society have been and are being run is not viable, because there are two opposing perspectives. On the one hand, we are creating a lot of economic and financial wealth, but, on the other hand, we are destroying our environment and the redistribution of wealth in society is highly unequal. We continue to have plenty of poor people in the world today, both in absolute and relative terms, so, going forward with the same logic is not viable and we have to do things differently.
As an example, the way we use energy is not viable because we are triggering climate change and that is causing a severe impact on societies around the world. What you actually find is that the most vulnerable societies are the ones that are most impacted, again coming back to the vicious circle of how the economic model can create wealth for some, while, at the same time, causing havoc elsewhere.
Which sector in Mauritius faces maximum challenges in terms of reporting complexity, and can you provide examples of how the framework helps?
I think all companies, irrespective of the sector they operate in, face challenges or will face challenges as they make the transition to sustainability. And, if you look at the wider perspective of the reporting process, very often companies have a tendency to show overriding focus on the ‘rear-view mirror’ so to speak, in terms of comparing this year’s performance with the last year’s performance. But, sustainability reporting seeks a different way of looking at things. So, what you want to be doing is that, wherever you have material impact encompassing economic, social or environmental paradigms, you have to set yourself strategies, actions and targets for the medium or long-term term future, and compare your current performance against these targets, rather than the previous year’s performance.
Thus, the overall idea is to set yourself targets for the future and when you engage in reporting, you compare current performance against these targets. Evaluate whether you were able to meet the set targets, justify with logical explanations if you have not been able to meet them, and, if there are substantial variations, are you are going to amend the targets, and if so, why.
Is this framework been adopted and successful in other jurisdictions?
The GRI framework is the most widely used worldwide today. Mauritius is certainly not the first country and our local companies are certainly not the first ones to be adopting it. Basically, the GRI framework and compliance with the same is an area where we are playing catching up with other jurisdictions. To give just a ball park figure, there are at least some 4,000-5,000 companies around the world that are following the GRI framework in today’s day and age.
Finally, for Mauritian companies, what would you advise as the correct corporate sustainability approach towards going green?
Sustainability is all about a green strategy, I think most companies do not have a strategy for sustainability and that is the basically the most serious shortcoming that we can find in local companies’ reporting. When we look at managing the GRI process, companies must ensure that they are future-centric and forward looking, and going green is a mandatory requirement of sustainability.
- By Wazna Gunga