Programme updates

The Aviva convened Corporate Sustainability Reporting Coalition (CSRC) represents financial institutions, professional bodies, NGOs and investors with assets under management of approximately US$2 trillion.

We believe progressive companies understand that long-term value is enhanced by embedding long-term sustainability considerations into their business strategy and by fully disclosing their progress to investors.

The Coalition is calling on all United Nations member states to commit to develop a Convention on Corporate Sustainability Reporting at the UN Conference on Sustainable Development (Rio+20).

Context

• A large number of companies now report on their environmental, social and governance (ESG) performance. However, there remains no globally accepted rule requiring reporting of ESG performance.

• Despite the large number of companies publishing information, the vast majority of companies fail to do so – analysis indicates that at present more than 75% of the companies covered by Bloomberg do not currently disclose their sustainability performance.

Proposal

• We are calling on UN member states to commit, at the 2012 Earth Summit, to develop national regulations which mandate the integration of material sustainability issues within the reporting cycle, in the Annual Report and Accounts, of all listed and large private companies – or explain why if they do not; and provides effective mechanisms for investors to hold companies to account on the quality of their disclosures, including for instance through an advisory vote at the AGM.
• This global policy framework should adhere to three key principles:
  
  - Report or Explain – establish a report or explain approach to sustainability reporting policy.
  
  - Transparency – enhance transparency by requiring national measures which mandate the integration of material sustainability issues within the company reporting cycle, in Annual Report and Accounts;
  
  - Accountability – provide effective mechanisms for investors and all stakeholders to hold companies to account on the quality of their disclosures, including for instance an advisory vote at the AGM).
• We proffer that such a requirement will create the right kind of discussions within boardrooms, throughout firms and encourage investors to think about the sustainability of the firm. 
• This initiative is a market based mechanism that promotes enhanced self regulation within the market. individual nations would be free to choose the most appropriate way to implement this, whether than be in primary legislation, in regional Company Law, or via the listing authorities.

Business case

• It has been demonstrated that there is a direct correlation between sustainable business practices and the longer-term financial success of that company. Disclosure is a powerful motivational management highlighting areas of underperformance that are important to the long-term health of the business.
• This will help capital to be allocated to more sustainable, responsible companies and strengthen the long term sustainability of the financial system.

At Rio +20

• It is now almost twenty years since the first Earth Summit; as such we believe next year offers a momentous opportunity to move this agenda forward at a global level.
• At the current rate it will be decades before sustainability reporting is common practice across global markets. The world now needs to move from the innovative and pioneering approach of a minority of companies to a true global mainstream practice for all companies.

More information on the Corporate Sustainability Reporting Coalition:

• Aviva’s response to the zero draft of the outcome document for the Rio+20 Earth Summit
• Joining the Coalition PDF (15KB)
• Key dates on route to the Earth Summit 2012 PDF (13KB)
• Launch of the Coalition
• Transcript of Lord Sharman, chairman, Aviva plc, speech PDF (35KB), at the Institute of Chartered Accountants in England and Wales (ICAEW) in London 7 December 2011
• View video (external link) of Paul Abberley, chief exective, Aviva Investors, at Tomorrow's Company annual parlimentary reception at House of Lords 9 November 2011
• Transcript of Paul Abberley's speech PDF (25KB)