01/24/2007

Business contribution to sustainable development must go beyond compliance

Report urges business to focus on material social and environmental risks and
opportunities, and shows how.

A new AccountAbility report calls on companies to move beyond basic compliance
approaches in dealing with social and environmental issues and to integrate
them into their core business strategies and practices. AccountAbility is an
international, non-profit membership organisation promoting accountability
innovations aligned to sustainable development through standards development,
leading edge research and engaging in change-making practitioners,
organizations and initiatives.

The challenge of sustainable development requires business to shift from
viewing it as a matter of compliance to one of value generation. To achieve
this, businesses will need to align their strategies and performance management
to emerging social and environmental constraints and opportunities. The most
important contribution of businesses to social and environmental challenges
will be in what they do in achieving success rather than what they avoid doing.

Simon Zadek, AccountAbility's Chief Executive, says "Compliance will only ever
be a small part of the answer. Businesses' enduring contribution to sustainable
development will lie in what they do, not what they don't do, in new
technologies, products and processes, and in the next generation of business
models fit for the 21st century."

'The Materiality Report: Aligning Strategy Performance and Reporting', prepared
by AccountAbility in association with BT Group plc and LRQA, provides a toolkit
for managers to work out which issues are 'material' to their underlying
performance, and envourages business to focus on these issues in their public
reporting.

Chris Tuppen, BT's Head of Sustainable Development and Corporate
Accountability, one of the report authors, commenting on the need to focus
public reporting on material issues: "Communicating material issues helps
stakeholders understand where sustainability and our main commercial business
activities meet. This is where the biggest challenges lie and ultimately the
opportunity for us to make the biggest difference."

Colin le Duc, Head of Research at leading sustainability fund manager,
Generation Investment Management, reinforced this perspective: "The approach
set out in this report will help companies in better understanding and
communicating their value proposition to investors like Generation concerned
with the alignment of strategy and practices to social and environmental
challenges and opportunities."

The Materiality Framework set out in the report provides the means for improved
assurance aligned to prevailing standards including the GRI G3 Sustainability
Reporting Guidelines, and the AA1000 Assurance Standard.

Deborah Evans, Business Manager - Corporate Reporting and Assurance, at LRQA
and a co-author of the report, gives the assurance providers view: "Lack of a
shared understanding of materiality and its application is a fundamental issue
we have to resolve, if we are going have Corporate Social Responsibility
reports that are of real relevance to organizations and their stakeholders. The
tools provided in this report finally provide a basis for assuring the
credibility of how businesses determine which social and environmental issues
are really integral to business performance."


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