Later that year, the U.N. created the Commission on Sustainable Development
to monitor and report on implementation of the agreements at the local,
national, regional, and international levels.
The U.N. is now working with some of the world’s largest financial institutions,
pension funds, and research firms, representing more than $6 trillion in assets,
to develop environmental, social, and governance (ESG) guidelines that will
be more transparent to shareholders. These “Principles for Responsible
Investment” include signatories, such as Citigroup, Bank of Tokyo, ABN AMRO,
and hundreds of other financial institutions.
Meanwhile, changes also were afoot in the corporate world. Traditionally,
companies had evaluated their performance on strictly financial measures,
such as accounting figures and stock prices. In the 1980s and 1990s, they
began to realize that their approach was too narrow. They began adopting
new frameworks, such as the balanced scorecard to gain a more holistic and
strategic picture of performance and strategy. New measurement systems
began to include intangibles such as customer satisfaction, employee satis-
faction, and product innovation. Research has shown that more balanced
measurement systems are linked to better business performance.
Companies began issuing sustainability reports in the 1990s. In 1999, a coali-
tion of activist groups, in cooperation with the United Nations, released the
first sustainability reporting guidelines. This evolved into the Global Reporting
Initiative (GRI). The GRI remains the de facto standard in sustainability
reporting used by organizations in more than 60 countries. In 1990, virtually
no corporations issued non-financial reports. Now more than 1,800 do so.
The concern about sustainability is more than “do-goodism.” Customers and
investors increasingly demand that corporations act as good stewards — a
mandate that companies ignore at their peril. In the U.S., socially responsible
investment firms manage more than $2 trillion in assets. The market has rec-
ognized this ethic with new indexes, such as the Dow Jones Sustainability
Index and FTSE4Good. According to Al Gore, cofounder of the investment
firm Generation, “the full spectrum of value that represents a corporation’s
activities can only be understood if you look outside the narrow confines of
financial reports.”
This area continues to mature rapidly. The U.N. is now working with some of
the world’s largest financial institutions, pension funds, and research firms,
representing more than $6 trillion in assets, to develop ESG guidelines that
will be more transparent to shareholders. New automated solutions are
under development. AMR Research predicts that 89 percent of companies in
the U.S. and 62 percent of companies in Europe are going to invest in IT for
sustainability between 2007 and 2009.
Without a doubt, sustainability is here to stay. But sustainability isn’t just
about doing what’s right: It’s also good for your business. In the next section,
we show you how.