Sustainability Reporting under

GLOBAL REPORTING INITIATIVE (GRI)

Md. Touhidul Alam Khan ACMA, CSRA

Deputy Managing Director & Chief Business Officer

Prime Bank Limited
[email protected]

Abstract
We live, breathe, create, extract, produce, pollute and consume in our daily life. We currently
use 1.5 times capacity of the earth each year to absorb our waste and provide renewable
resources. If we don't act properly,by 2030 this number will be two planets every year. This
needs to change, change into a sustainable global economy.
Sustainability is notan only environmental issue, it also takes into account economic & social
issues, labor practices, human rights, economic performance, community, society, corruption,
corporate governance and responsibility of product & services. And a sustainable global
economy is not a luxury. Without a sustainable business model, environmental and social issues
will continue to badly impact our economy and compromise for our future needs. The planet
and society need a sustainable global economy and an organization needs at first a long time
strategy and success. How do it get started? The change to a sustainable economy requires
organizational change. To drive change,the organization needs to set goals and measures how
the organization will forward.
Keywords: Sustainability, Sustainability, Sustainability Reporting, Global Reporting Initiative,
GRI, Triple Bottom Line, ISO 26000, OECD, GRI 3, GRI 3.1, GRI G4, IIRC, CERES, UNEP, ISO,
Sustainable Development, Sustainability Reporting Milestone, GRI G4, DMA, UNGC, ISAE,
AA1000.

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capacity to sustain". As per Oxford Dictionary,

sustainability means "able to be maintained at a
certain rate or level" i.e. sustainable economic
growth.

Introduction
An increasing number of companies and
organizations want to make their operations
sustainable and contribute to sustainable
development. Sustainability reporting can help
organizations to measure, understand and
communicate their economic, environmental,
social and governance performance. Sustainability the ability for something to last for a long time, or
indefinitely - is based on performance in these
four key areas:

Systematic sustainability reporting helps

organizations to measure the impacts they
cause or experience, set goals, and manage
change;
A sustainability report is the key platform for
communicating sustainability performance and
impacts - whether positive or negative;
To produce a regular sustainability report,
organizations set up a reporting cycle - a
program of data collection, communication,
and responses. This means that their
sustainability performance is monitored on an
ongoing basis. Data can be provided regularly
to senior decision makers to shape the
organization's strategy and policies, and
improve performance;
Sustainability reporting is a vital resource for
managing change towards a sustainable global
economy - one that combines long term
profitability with ethical behavior, social justice
and environmental care.

Sustainability
Sustainability is the state of global system, which
includes environmental, social and economic
subsystems, in which the needs of the present are
met without compromising the ability of future
generations to meet their own needs.
Sustainability is combination of two words;
'Sustain' and 'Ability' i.e. SustainAbility. The simplest
and most fundamental meaning of sustainability is:
"the ability to sustain" or, put another way, "the

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"Sustainability is defined as requirement of our

generation to manage the resource base such that
the average quality of life that we ensure ourselves
can potentially be shared by all future
generations. Development is sustainable if it
involves a non-decreasing average quality of life".[Geir
B. Asheim, "Sustainability," The World Bank, 1994]

Sustainability Reporting
Sustainability Reporting is a key tool to help the
organization to set goals, measure progress and
manage sustainability within the organization.
Reporting on the organization's sustainability
performance will give internal and external
stakeholders a clear idea of its impact and can
increase the efficiency and improve the
performance. And reporting enables the
organization to forward into successful sustainable
future.
In a word, a sustainability report is a report
published by a company or organization about the
economic, environmental and social impacts
caused by its everyday activities. A sustainability
report also presents the organization's values and
governance model, and demonstrates the link
between its strategy and its commitment to a
sustainable global economy. Sustainability reporting
may be called in different names such as, a nonfinancial reporting or triple bottom line reporting
(i.e. People, Planet and Profit) orcorporate social
responsibility (CSR) reporting, and more.

Why sustainability reporting

As per definition of Global Reporting Initiative (GRI),
"A sustainability report enables companies and
organizations to report sustainability information in a
way that is similar to financial reporting. Systematic
sustainability reporting gives comparable data, with
agreed disclosure and metrics."
Many
organizations
are
incorporating
environmental and social information into their
public reports in response to demands from
shareholders and other stakeholders for more
information so that they may make betterinformed decisions about a company's

performance in this area. Organizations of all sizes

(including commercial companies, organizations,
NGOs, schools and small & medium companies)
are choosing to report on their sustainability
strategies for several reasons.
An effective sustainability reporting cycle should
benefit all reporting organizations. There are two
types of benefits; one is internal and the other is
external.
Internal benefits for
organizations include:

companies

and

Increasing understanding of risks and

opportunities;
Emphasizing the link between financial and nonfinancial performance;
Influencing long term management strategy and
policy and business plans;
Streamlining processes, reducing costs and
improving efficiency;
Benchmarking and assessing sustainability
performance with respect to laws, norms,
codes, performance standards, and voluntary
initiatives;
Avoiding being implicated in publicized
environmental, social and governance failures;
Comparing performance internally, and between
organizations and sectors.

External benefits of sustainability reporting

include:

Mitigating - or reversing - negative

environmental, social and governance impacts;
Improving reputation and brand loyalty;
Enabling external stakeholders to understand
the organization's true value, and tangible and
intangible assets;
Demonstrating how the organization influences,
and is influenced by, expectations about
sustainable development.

What is GRI
The Global Reporting Initiative (GRI) is a leading
organization in the sustainability field. GRI
promotes the use of sustainability reporting as a
way for organizations to become more sustainable
and contribute to sustainable development. A
sustainable global economy should combine longterm profitability with ethical behavior, social
justice, and environmental care. This means that
when companies and organizations consider
sustainability - and integrate it into how they
operate - they must consider four key areas of

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their performance and impacts: economic,

environmental, social and governance.
The Global Reporting Initiative (GRI) promotes
the use of sustainability reporting as a way for
organizations to become more sustainable and
contribute to a sustainable global economy.
GRI is an international, network-based
organization; its activity involves thousands of
professionals and organizations from many
sectors, constituencies and regions.GRI's mission
is to make sustainability reporting standard
practice. To enable all companies and organizations
to report their economic, environmental, social
and governance performance, GRI produces free
Sustainability Reporting Guidelines. (GRI website:
https://www.globalreporting.org/). GRI was set up
in the US in 1997 by CERES ("Coalition for
Environmentally Responsible Economies" is a non-profit
sustainability advocacy organization based in Boston,
Massachusetts. Founded in 1989, Ceres' mission is to
"mobilize investor and business leadership to build a
thriving, sustainable global economy". Ceres brings
together disparate stakeholders - investors, companies
and public interest groups - to accelerate and expand
the adoption of sustainable business practices and
solutions to build a healthy global economy), with
support from the United Nations Environment
Program (UNEP). Its Secretariat is located in
Amsterdam, The Netherlands, and there are GRI
'Focal Points' - regional offices - in Australia, Brazil,
China, India, South Africa, and the USA. GRI enjoys
strategic partnerships with the Organization for
Economic Co-operation and Development
(OECD), the UN Global Compact, UNEP and the
International Organization for Standardization (ISO).
Structure of GRI
The Global Reporting Initiative (GRI) is an
international non-profit organization, with a
network-based structure; and a Collaborating
Centre of the United Nations Environment
Program. GRI's Board of Directors has ultimate
responsibility for GRI.
Funding of GRI
GRI is supported by a global network, and has
diverse sources of funding as under:

Project grants from governments and

foundations;

Corporate sponsorship of projects and events;

Provision of learning and other services;

Support from a large international community

of
Organizational
Stakeholders
and
Stakeholder Council members.

Scope of the work of GRI

GRI works within a global network that is open to
all individuals and organizations with an interest in
sustainability reporting. This collaborative network
includes representation from corporations,
governments, non-governmental organizations,
consultancies, accountancy organizations, business
associations, rating agencies, universities, and
research institutes. They contribute to the ongoing
development of GRI's Sustainability Reporting
Framework.
Major contributors of Sustainability
Reporting under GRI method
The major contributors of Sustainability Reporting
guidance include as under:

The Global Reporting Initiative (The GRI

Sustainability Reporting Framework and
Guidelines);
The Organization for Economic Co-operation

and Development (OECD Guidelines for

Multinational Enterprises);

The United Nations Global Compact (the

Communication on Progress);

The
International
Organization
for
Standardization (ISO 26000, International
Standard for social responsibility)
Sustainability Report: Who will prepare?
Companies and organizations of all types, sizes and
sectors, from every corner of the world, may
prepare sustainability reports. GRI's guidance is
designed to be used by all companies and
organizations, and can play a major role in the
future of organizational reporting. Thousands of
companies across all sectors have published
reports that address some or all of the disclosures
in GRI's Sustainability Reporting Framework and
Guidelines. Presently, public authorities and nonprofits are also big reporters.

Milestone of Sustainability Reporting

The year-wise development of Sustainability Reporting under GRI method is as under:

2000

2002

The first version

of GRI launched.

The second
generation of
guidelines, known
as GRI G2, was
unveiled at the
world Summit on
Sustainable
development in
Johannesburg.
GRI was formally
inaugurated as
UNEP
collaborating in the
presence of thenUN Secretary
General Kofi
Annan, and
relocated to
Amsterdam as an
independent nonprofit organization.

2014
Declaration of 5th
Global GRI Conference
to be held18-20 May,
2016 in Amsterdam, the
Netherlands

2006
Launched GRI's guidance in
the name of GRI G3 i.e.
third generation of
guidelines. Over 3,000
experts from business, civil
society and the labor
movement participated in
G3's development.
Accounting for Sustainability
launched by the Prince of
Wales
Sector-specific guideline
was produced for diverse
industries in the form of
Sector Supplements (i.e.
sector guidelines).
GRI introduced service for
its users expanded to
include coaching and
training, software
certification, "beginners''
reporting guidance for small
and medium-sized

2013
Norway and Colombia
join the Group of
Friends of Paragraph
47 in the first four
months of 2013
European Commission
launches proposal
amending Council
Directives
Amsterdam Global
Conference on
Sustainability and
Reporting
Launch of G4, the fourth
generation of GRI
Guidelines (from May
22, 2013)

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2007

2008

Taken 'Growth and

Responsibility in a
World Economy',
Held G8 Summit
Heiligendamm,
Summit Declaration on
GRI
Published 'Guidelines
for GRI based external
reporting by stateowned companies
(Sweden)
Published 'Guidelines
on Fulfilling Socia
Responsibility' by
State-Owned
Enterprises (China)
certification,
"beginners'' reporting
guidance for small and
medium-sized
enterprise.

Declared Financial
Statements Act
where requires
CSR disclosure for
large businesses in
Denmark
Held Amsterdam
Global Conference
on Sustainability
and Transparency

2012
Rio+20 summit in Brazil;
The Group of Friends of
Paragraph 47 founded by
the governments of Brazil,
Denmark, France and
South Africa
Genelle II passed in France
Work on the post-2015
development agenda gets
underway

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2009
Published White Paper on 'CSR in
a global economy' in Norway;
The Corporate Social Responsibility
Voluntary Guidelines in India
launched by the Ministry of
Corporate Affairs
Launched GRI's Amsterdam
Declaration on Transparency and
Reporting
Update of King Code of
Governance for South Africa (King
III)
SEC shifts policies to incorporate
ESG concerns (USA) European
Workshops on the disclosure of
ESG information (European
Commission)
Initiation of review of OECD
Guidelines for Multinational
Enterprises (OECD)
Accounting for Sustainability
launches 'A Practical Guide to
Connected Reporting'
Inauguration of Sustainable Stock
Exchanges Global Dialogue

2011
Updated OECD Guidelines
adopted at the 50th
Anniversary Ministerial
Meeting
GRI G3.1 Guidelines
launched, with updates on
gender, community and
human rights
A renewed EU strategy
2011-14 for CSR'
published by the
European Commission,
with new definition of CSR
and announcement of
future mandatory
sustainability reporting
UNGC women's
empowerment principles
Launch of the UN Guiding
Principles
Launch UN Guiding
Principles on Human
Rights
7th KPMG global survey on
corporate responsibility
reporting

2010
SEC releases interpretive
guidance on climate change
risk disclosure (USA)
Final EU Workshop on the
disclosure of ESG
information (European
Union)
Held Amsterdam Global
Conference on Sustainability
and Transparency
Revision of OECD Guidelines
Launch of ISO 26000
Johannesburg Stock
Exchange requires
integrated reports from listed
companies
United Nations Global
Compact:10 year
anniversary
Launch of the UNGC
Differentiation Framework
GRI Guidelines: 10 year
anniversary
Establishment of the
International Integrated

Sustainability Reporting
Reporting Initiative (GRI)

and

Global

Since 1999, GRI has provided a comprehensive

Sustainability Reporting Framework that is widely
used around the world. The cornerstone of the
Framework is the Sustainability Reporting
Guidelines. As a result of the credibility,
consistency and comparability it offers, GRI's
Framework has become a de facto standard in
sustainability reporting in the world.
GRI: Defining reporting content
Organizations around the world can take one of
the many different approaches, based on local
cultures and regulatory differences, and on
availability of the different mandatory and
voluntary initiatives. The most commonly accepted
framework has been created by the Global
Reporting Initiative (GRI). The vision of the GRI is
that disclosure on economic, environmental
and social performance is as commonplace and
comparable as financial reporting. The GRI
guidelines present four principles for defining
report content:
Materiality: The report should cover topics and
indicators that reflect the organization's significant
economic, environmental, and social impacts, or
would substantively influence the assessment and
decisions of stakeholders.
Stakeholders' inclusiveness: The reporting
organization should identify its stakeholders and
explain in the report how it has responded to
their reasonable expectations and interests.
(Stakeholders are defined as entities or individuals that
can reasonably be expected to be significantly affected
by the organization's activities, products, and services
and whose actions can reasonably be expected to
affect the ability of the organization to successfully
implement its strategies and achieve its objectives).
Context: The report should present the
organization's performance in the wider context
of sustainability.
Completeness: The information presented in
the report should be sufficient to reflect significant
economic, environmental, and social impacts, and
enable stakeholders to assess the reporting
organization's performance in the reporting
period.
Principles of defining GRI report
The guidelines have six principles defining report
quality. These are:

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Reliability: Information and processes used in

the preparation of a report should be gathered,
recorded, compiled, analyzed, and disclosed in a
way that could be subject to examination and that
establishes the quality and materiality of the
information.
Clarity: Information should be made available in a
manner that is understandable and accessible to
stakeholders using the report.
Balance: The report should reflect positive and
negative aspects of the organization's performance
to enable a reasoned assessment of overall
performance.
Comparability: Issues and information should be
selected, compiled, and reported consistently.
Reported information should be presented in a
manner that enables stakeholders to analyze
changes in the organization's performance over
time, and could support analysis relative to other
organizations.
Accuracy: The reported information should be
sufficiently accurate and detailed for stakeholders
to assess the reporting organization's
performance.
Timeliness: Reporting occurs on a regular
schedule and information is available in time for
stakeholders to make informed decisions.
Set of indicators:
The guidelines have an extensive set of indicators,
which give details on the kind of data that should
be included in reports. The indicators cover
several areas, including economics, environment,
human rights, labor, product responsibility and
society. There is also guidance on unique indicators
for particular industry sector (sector
supplements) and country-level information. GRI
provides special guidance for SMEs and
microbusinesses and has several examples of
reports produced by these guidelines.
Disclosure on Management Approach (DMA)
DMA provides best overview of the organization's
management approach to Aspects defined under
each Indicator Category. Organization can
structure its DMAs to cover full range of aspects
under a given Category or group its responses on
the aspects differently. However, disclosure should
address all aspects associated with each Category.
The DMA is intended to give the organization an
opportunity to explain how the economic,
environmental and social impacts related to
Material Aspects are managed. The Guidance for

DMA is divided in two types: Generic and Aspectspecific Guidance. Generic DMA Guidance is
designed to be used with any Aspect. Aspectspecific DMA Guidance is designed to give
additional detail on the information to report for
the Aspect.
Criteria to be applied by an organization to
prepare its sustainability report 'in
accordance' with the guidelines:
The guidelines under GRI offer two options to an
organization in order to prepare its sustainability
report 'in accordance' with the guidelines: the
'Core'option and the 'Comprehensive'option.
Each option can be applied by all organizations,
regardless of their size, sector or location. The
focus of both options is on the process of
identifying material aspects. The Core option
contains the essential elements of a sustainability
report. It provides the background against which
an organization communicates the impacts of its
economic, environmental and social & governance
performance.
The Comprehensive option builds on the Core
option by requiring additional Standard
Disclosures of the organization's strategy and
analysis, governance, and ethics and integrity. In
addition, the organization is required to
communicate its performance more extensively by
reporting all indicators related to identified
material aspects.An organization, whether it is a
new or experienced reporter, has to choose the
option that best meets its reporting needs and,
ultimately, enables it to meet its stakeholders'
information needs.The options do not relate to
the quality of the report or to the performance of
the organization. They reflect the compliance of
the organization's sustainability report with the
Guidelines.
Sustainability Reporting Guideline under GRI
The Guidelines are developed through a global
multi-stakeholder
process
involving
representatives from business, labor, civil society,
and financial markets, as well as auditors and
experts in various fields; and in close dialogue with
regulators and governmental agencies in several
countries. The Guidelines are developed in
alignment with internationally recognized
reporting related documents, which are
referenced throughout the Guidelines. The
Guidelines are divided into two parts: one is
Reporting Principles & Standard Disclosures and
another is Implementation Manual. The first part Reporting Principles and Standard

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Disclosures - contains Reporting Principles,

Standard Disclosures, and the criteria to be
applied by an organization to prepare its
sustainability report 'in accordance' with the
Guidelines. The second part - Implementation
Manual - contains explanations of how to apply
the Reporting Principles, how to prepare the
information to be disclosed, and how to interpret
the various concepts in the Guidelines.
Transition to the G4 Guidelines from G3
and G3.1
GRI recommends that first time reporting
organizations use the G4 Guidelines, even if they
do not fulfill the requirements of the 'in
accordance' options in the first reporting cycles.
Reporting organizations using the G3 or G3.1
guidelines need to decide for themselves when to
transition to the G4 Guidelines. For this reason,
GRI will continue to recognize reports based on
the G3 and G3.1 guidelines up to 2015. However,
reports published after 31 December 2015 should
be prepared in accordance with the G4
Guidelines.
Main features of the G4 guidelines
The G4 Guidelines have increased userfriendliness and accessibility. This means
organizations and report users can concentrate on
the sustainability impacts that matter, resulting in
reports that are more strategic, more focused,
more credible, and easier for stakeholders to
navigate. Among many other features, key
enhancements in G4 include:

Up-to-date disclosures on governance, ethics

and integrity, supply chain, anti-corruption and
GHG emissions.
Generic format for Disclosures on Management
Approach (DMA).

Two 'in accordance' criteria options, both

focused on Material Aspects.

GRI Content Index offering a transparent

format to communicate external assurance.

Technically-reviewed content and clear

disclosure requirements.

Detailed guidance on how to select material

topics, and explain the boundaries of where
material impacts occur.

Flexibility for preparers to choose the report

focus.

Flexibility to combine with local and regional

reporting requirements and frameworks.

Up-to-date harmonization and reference to all

available and internationally accepted reporting
documents.

Categories and Aspects in the guidelines:

Category

Social

Subcategories Labor Practices

and Direct work
Aspects

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Employment
Labor/Management
Relations
Occupational Health
and Safety
Training and Education
Diversity and Equal
Opportunity
Equal Remuneration
for Women and Men
Supplier Assessment
for Labor Practices
Labor Practices
Grievance Mechanisms

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Human Rights

Investment
Non-discrimination
Freedom of Association
and Collective Bargaining
Child Labor
Forced or Compulsory
Labor
Security Practices
Indigenous Rights
Assessment
Supplier Human
Rights Assessment
Human Rights
Grievance Mechanisms

Society

Local
Communities
Anti-corruption
Public Policy
Anti-competitive
Behavior
Compliance
Supplier
Assessment for
Impacts on Society
Grievance
Mechanisms for
Impacts on Society

Product
Responsibility

Customer Health
and Safety
Product and
Service Labeling
Marketing
Communications
Customer Privacy
Compliance
Product Portfolio
Audit
Active Ownership

Category

Economic

Aspects

Economic Performance
Market Presence
Indirect Economic Impacts
Procurement Practices

Environmental

Materials
Energy
Water
Biodiversity
Emissions
Effluents and Waste
Products and Services
Compliance
Transport
Overall
Supplier Environmental
Assessment
Environmental Grievance
Mechanisms

capital formation, corporate governance,

management of environmental risks and liabilities.
Sustainability reporting shows an understanding of
the external environments (products, labour, and
capital markets and regulatory structures) in
which the company conducts its business. Besides,
it assesses the elements that emphasize in the
company's competitive advantage (through cost
leadership and product/service differentiation and
the formation of intellectual capital). Sustainability
reporting also discloses known future
uncertainties (risks) and trends that may
materiality affect financial performance.
The
major
differences
sustainability reporting and
reporting are as under:
Elements

Financial Reporting

Time-scale
Focus

The reported year

Issues that
organization directly controls
Economic view Material
Data
Financial
Materiality
Financial significance
Users

Shareholders and investors

between
financial

Sustainability Reporting
Future orientation
Wider sustainability impacts
Intangible
Non-financial
Any information that is
significant to readers
Stakeholders

GRI G4 guidelines: Links with United

Nations Global Compact (UNGC)
'TenPrinciples', 2000:
United Nations Global Compact GRI G4 Guidelines
(UNGC) 'Ten Principles
Principle 1
Businesses should support and
respect the protection of
internationally proclaimed
human rights

Sub-Category: Human Rights (all

Aspects)
Sub-Category: Society
Local Communities

Principle 2
Businesses should make sure
they are not complicit in human
rights abuses

Sub-Category: Human Rights (all

Aspects)

Principle 3
Businesses should uphold the
freedom of association and the
effective recognition of the right
to collective bargaining

G4-11? Sub-Category: Labor Practices

and Decent Work
Labor/Management Relations
Sub-Category: Human Rights
Freedom of Association and
Collective Bargaining Sub-Category:
Human Rights
Forced and Compulsory Labor

Principle 4
Businesses should uphold the
elimination of all forms of forced
and compulsory labour

Sub-Category: Human Rights

Child Labor G4-10

Principle 5
Businesses should uphold the
effective abolition of child labour
Principle 6
Businesses should uphold the
elimination of discrimination in
respect of employment and
occupation

Sub-Category: Labor Practices and

Decent Work (all Aspects)

Principle 7
Businesses should support a
precautionary approach to
environmental challenges

Category: Environmental (all Aspects)

Principle 8
Businesses should undertake
initiatives to promote greater
environmental responsibility

Category: Environmental (all Aspects)

Sub-Category: Human Rights

Non-discrimination

Principle 9
Category: Environmental (all Aspects)
Businesses should encourage the
development and diffusion of
environmentally friendly
technologies
Principle 10
Businesses should work against
corruption in all its forms,
including extortion and bribery

Sub-Category: Society
Anti-corruption?
Public Policy

GRI G4: Corporate Corruption and Compliance

Transparency International defines Corruption as 'the abuse of entrusted power for private gain' and
covers individuals in the public or private sector. The GRI G4 framework includes reporting on corrupt
practices such as bribery, fraud, extortion, collusion, conflict of interest, and money laundering. These
activities are liable to result in an improper and illegal advantage to a business and adversely affect all pillars
of the society and stakeholders.
Banks involvement in environmental issues
The banking sector has responded far more slowly than other sectors to the new challenges that sustainability
presents. Bankers generally consider themselves to be in a relatively environmentally friendly industry (in
terms of emissions and pollution). However, given their potential exposure to risk, they have been surprisingly
slow to examine the environmental performance of their clients. A stated reason for this is still that such an
examination would 'require interference' with a client's activities. The role of banks in contributing toward
sustainable development is, however, potentially enormous, because of their intermediary role in an economy.
Banks transform money in terms of duration, scale, spatial location and risk and have an important impact on
the economic development of nations. This influence is of not only quantitative, but also of a qualitative nature,
because banks can influence the pace and direction of economic growth.

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Empirical research from 1990 concluded that

banks were not interested in their own
environmental situation or that of their clients.
This situation is now changing. There is growing
awareness in the financial sector that environment
brings risks (such as a customer's soil degradation)
and opportunities (such as environmental
investment funds). On the risk side, there has been
an enormous rising of concern in the United
States since the late 1980 as per act
Comprehensive Environmental Responses,
Compensation, and Liability Act (CERCLA).
A potentially Responsible Party (PRP) is a possible
polluter who may eventually be held liable under
CERCLA for the contamination or misuse of a
particular property or resource; Under this act,
four classes of PRPs may be liable for
contamination under this act:

the current owner or operator of the site.

the owner or operator of a site at the time
that disposal of a hazardous substance,
pollutant or contaminant occurred.
a person who arranged for the disposal of a
hazardous substance, pollutant or contaminant
at a site.
a person who transported a hazardous
substance, pollutant or contaminant to a site,
who also has selected that site for the disposal
of the hazardous substances, pollutants or
contaminants.

Banks could, under CERCLA, be held directly

responsible for the environmental pollution of
clients and obliged to pay remediation costs. Some
banks even went bankrupt under this scheme. Due
to these developments, American banks became
the first to consider their environmental policies,
particularly with regard to credit risks. European
banks were not exposed to these liabilities and
only began to develop policies toward
environmental issues during the mid-1990s. The
focus here was less on risk assessment and more
on internal environmental care and later the
development of new products such as
environmentally friendly investment funds.
Both risk and opportunity are now becoming
established elements in banking policies towards
the environment in different countries including
Bangladesh. Empirical research from 1995 on the
environmental activities of the signatories of the
'UNEP Statement by Financial Institutions on the
Environment and Sustainable Development', which
was launched in Rio showed that 80% of the
respondents made some kind of assessment of

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environmental risks. An investigation amongst the

signatories concluded that many banks have set up
environmental departments and are developing
environmentally friendly products. In Asia, South
America and Eastern Europe, change is also under
way, mostly through the influence of
environmental standards from multilateral
development banks. Strong evidence that
sustainability reporting has now reached the
mainstream of reporting activities in each year
with financial reporting.
Sectoral Sustainability Reporting for banks
and financial institutions
The Financial Services Sector Disclosures
document is based on the 'GRI Financial Services
Sector Supplement (FSS)'. This Sector Supplement
was issued in 2008 and developed based on the
G3 Guidelines (2006). After launching G4
Guidelines in May 2013, the complete Sector
Supplement content has been modified and
reorganized in a new format to facilitate its use in
combination and to fit with the G4 Guidelines'
content, structure and requirements.
The financial sector was segmented into four
categories for the purposes of developing these
Sector Disclosures, i.e. retail banking, commercial
and corporate banking, asset management, and
insurance. The table below outlines the working
definitions used for these categories in developing
the Sector Disclosures:
Category

Definition

Retail Banking

This category refers to everyday high street banking

including the provision of private and commercial
banking services to individuals. It also includes
banking for more affluent clients, including wealth
management and portfolio management services
(either on a discretionary or managed basis). It may
also include everyday transaction management, payroll
management, small loans, foreign exchange,
derivatives, etc. for individuals in their business
activity

Commercial and
This category includes all transactions with
Corporate Banking organizations/business counterparts of all sizes,
including but not limited to commercial and
corporate banking, project and structured finance,
transactions with small and medium enterprises
(SMEs) and the provision of financial services to
governments/ government departments. It also
includes corporate advisory services, mergers and
acquisitions, equity/debt capital markets, and
leveraged finance.
Asset Management This category refers to the management of pools of
capital on behalf of third parties. This capital is
invested in a wide range of asset classes, including
equities, bonds, cash, property, international equities,
international bonds, alternative assets (e.g. private
equity, venture capital, and hedge funds).
Insurance

This category refers to both pension and life

insurance services provided directly or through
independent financial advisors to the general public
and employees of companies. It also covers the
insurance of products or services for businesses and
individuals and re-insurance services.

Green Banking in Bangladesh

Sustainability Reporting

and

Special remarks by Governor of Bangladesh

Bank on Sustainability

The banking sector in Bangladesh is considered to

be in a relatively environmentally friendly industry
(in terms of emissions and pollution). However,
environmental impact of banks is not physically
related to their banking activities but with the
activities of the customers. Banking sector is one
of the major sources of financing investment for
commercial projects, which is one of the most
important economic activities for economic
growth and encouraging environmentally
responsible investments and prudent lending.

Bangladesh Bank (BB) Governor Dr. Atiur Rahman

made a presentation at the Third Advisory Council
Meeting of UNEP's Inquiry on 'Design of a
Sustainable Financial System' held in Zurich,
Switzerland on 05 May 2015. While giving his
reflections on the findings of the UNEP Inquiry to
design a sustainable financial system, Dr. Rahman
opted for transition to long-termism and
described BB's engagement in reshaping
financial system to support sustainable
development in Bangladesh.

Under special initiative of Dr. Atiur Rahman,

Governor of Bangladesh Bank (i.e. central bank),
Bangladesh Bank issued a circular on 27th
February, 2011 (BRPD Circular No.2) on Policy
Guideline for Green Banking towards banks
stating, " to adopt a comprehensive Green Banking
Policy in a formal and structured manner in line with
the global norms so as to protect environment
degradation and ensure sustainable banking
practices." As stated by Bangladesh Bank, "Green
Banking" generally refers to banking practices that
foster environmentally responsible financing
practices and environmentally sustainable internal
processes minimizing *GHG emissions. ((*A
greenhouse gas (abbreviated GHG) is a gas in an
atmosphere that absorbs and emits radiation within
the thermal infrared range. This process is the
fundamental cause of the greenhouse effect. The
primary greenhouse gases in the Earth's atmosphere
are water vapor, carbon dioxide, methane, nitrous
oxide, and ozone.))

Regarding the Bangladesh context, the Governor

of Bangladesh Bank pointed that Bangladesh Bank
is one of the very few early recognizers of the
longer term needs of inclusivity and environmental
sustainability in its growth pursuits while
successfully navigating the conventional short term
business cycle focused monetary and financial
policy approaches. Outlining BB's approach to
sustainable development, Dr. Rahman added
that BB began with setting motivations
right in the financial sector, followed by
appropriate enablement & policy support
within
its
mandated
charter
of
developmental role. He further said, "in
Bangladesh, we have found our sustained financial
sector wide motivation campaigns as useful tool in
ingraining a socially responsible institutional ethos of
sustainable financing. This motivation effort needs to
proceed hand in hand alongside other advocacy and
leadership initiatives in embedding sustainable
financing as a core element of financial markets
development".

Green Banking involves two pronged

approaches:firstly, Green banking focuses on the
green transformation of internal operations of all
banks/FIs. It means all the banks/FIs should adopt
appropriate ways of utilizing renewable energy,
automation and other measures to minimize
carbon footprint (*a carbon footprint is an
estimate of the climate change impact of activity such as making a product, living a lifestyle or running a
company) from banking activities. Secondly, all
banks should adopt environmentally responsible
financing; weighing up environmental risks of
projects before making financing decisions and in
particular supporting and fostering growth of
upcoming 'green' initiatives and projects. As per
Bangladesh Bank's circular there are three phases
of green banking activities as under and the banks
have to prepare sustainability report in standard
format with external verification under GRI
method.

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First sustainability report in banking sector

under GRI G4 in Bangladesh
Prime Bank Limited that has shown leadership and
foresight in publicly declaring a commitment to
sustainability by publishing the first G4
Sustainability Report in banking sector in
Bangladesh in March 2015 by publishing this
report. Prime Bank has also completed the
'Materiality Disclosure Service' and has got
permission to use 'Materiality Disclosure Service
Icon' from GRI, the Netherlands, first time in
Bangladesh. Some other banks are also working on
this issue.
Sustainability Reporting and Bangladesh's
perspective
In Bangladesh, no impact study was conducted
though some organizations including banking

industry have started to prepare the sustainability

report and got high recognition internationally by
this time. For the purpose of assisting, developing,
measuring and reporting of the implementation of
CSR/Corporate Sustainability (CS) there is exigent
need for an independent organization in
Bangladesh taking the vision and commitment in
implementing and developing sustainable
development through sustainability reporting
process.
Sustainability Reporting Trend in the world
"Carrots and Sticks" (a publication of UNEP & GRI on
sustainability reporting practices in the world)in its
third edition in 2013covered 45 countries and
regions regarding practices of sustainability
reporting all over the world. As per study, it has
been seen observed that in the seven years of the
series, the volume of policy and regulation has
remarkably been increased. Thisincludes a notable
increase in the number of mandatory reporting
measures. In 2006, 58 percent of policies were
mandatory; now, more than two thirds (72
percent) of the 180 policies in the 45 reviewed
countries are mandatory.
Mandatory
Voluntary
Total
Countries & Regions

Initiatives

Carrots and Sticks Publications

2006
2010
2013
35
58%
94
26% 130
72%
25
42%
57
38%
50
28%
60
151
180
19
32
45

Assurance Standards
GRI recommends the use of external assurance
but it is not a requirement to be 'in accordance'
with the guidelines. There is no generally accepted
standard for assurance. Internationally, many
accountants use ISAE 3000 (Assurance
Engagements Other Than Audits or Reviews of
Historical Financial Information) when undertaking
assurance assignments on social responsibility or
sustainability reports. ISAE 3000, published in
2005, is for professional accountants in public
practice. It has two levels of assurance: "limited"
and "reasonable". Another standard, the AA1000
assurance standard, published in 2003, provides a
more specific framework for sustainability
assurance and it has also used by non-accountants.
AA1000 provides findings and conclusions on the
current status of an organization's sustainability
performance and provides recommendations to
encourage continuous improvement. It is not a
certification standard that leads to pass of fail, but
rather is designed to be used by organizations in
different stages. AA1000 assurance also has two
level. In the "type 1 assurance', the assurance

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provider evaluates the nature and extent of the

organization's adherence to the three principles of
participation of stakeholders, materiality, and
responsiveness. This provides limited assurance
releated to the way an organization manages
sustainability performance and how it
communicates this in a sustainability report. "Type
2 assurance" also evaluates the reliability of
specified sustainability performance information.
This information is selected based on the
materiality determination and needs to be
meaningful to the intended users of the assurance
statement. However, the ISAE 3000 standard is
commonly used for sustainability reporting
assurance till now.
The SDGs and the post-2015 Development
Agenda
The concept of Sustainable Development Goals
(SDGs) was originally proposed by the
governments of Colombia, Guatemala and Peru
during the Rio+20 Conference in 2012. The UN
member states at the conference agreed to launch
a process to develop a set of SDGs. This process is
intended to converge with a Post-2015
Development Agenda, following the expiry of the
Millennium Development Goals (MDGs) in this
year.
The SDGs due to be launched in September 2015,
will embrace a triple bottom-line approach to
human well-being, covering environmental,
social and economic challenges and their ambition
is to be global and inclusive.
GRI supports the view that the SDGs should be a
universal set of goals that not only address issues
under the responsibility of governments, but also
those that fall under the responsibility of business
and civil society. They will set the scene for a new
era of sustainability and critically inform the
sustainability context in which all actors operate.
Businesses will be encouraged to contribute to
the sustainable development agenda and be
expected by governments to collaborate in the
implementation of the SDGs. Measuring and
reporting will be a key element here, therefore
there is an opportunity for GRI to contribute with
its expertize on corporate sustainability and
reporting and offering the GRI Guidelines, a free
public good which represents the global standard
on sustainability reporting.
GRI joined forces with the United Nations
Global Compact (UNGC) and the World
Business Council for Sustainable

Development (WBCSD) to develop private

sector guidance that will help companies enhance
their sustainability management and reporting with
a view to global sustainable development goals and
targets. The Alliance partners will work together
to add a chapter to the GRI's global standard to
make the connection to the forthcoming
Sustainable Development Goals (SDGs).
World Bank GRI Report for the fiscal 2014
(July 2013 - June 2014)
The World Bank supports the Global Reporting
Initiative (GRI) and is one of the GRI Chapter
Group of founding members. The World Bank has
prepared the sustainability report in accordance
to the GRI G4 guidelines: core option and
provides an overview of sustainability
considerations within the World Bank's lending
and analytical services as well as its day-to-day
operations and management of staff. Their aim to
be comprehensive in their reporting and thus
include indicators from GRI's Financial Sector
Supplement. Interested concerns may also take a
view of the Report at:
(https://crinfo.worldbank.org/wbcrinfo/sites/wbcrinfo/fil
es/GRI%20Annex%2010-2-14.pdf)
Challenges for implementing sustainability
reporting
Awareness: Many accountants simply don't see
sustainability as relevant to their job. The first
step is to raise awareness about their crucial role
and provide them with further resources and
training at all levels to allow them to incorporate
these issues into works.
Quantifying the qualitative: There are many
difficulties in estimating the costs of environmental
and social issues across the full lifecycle of a
product or process. And it is sometimes more
difficult to measure for service industries like
banks and financial institutions.
Moving from costs to revenues: There is a
need to move beyond seeing environmental
initiatives and values as just costs to be suffered or
costs to be reduced at the first possible
opportunity. Companies need to identify the
business benefits, and ultimately profits, that
correspond to the costs that must be incurred for
better environment and social performance.
Consumers: Responsible companies have
competitors who often price their goods below
their production cost, discounting the social and
environmental costs. In some cases managers who

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price their goods and services based on full social

and environmental costs will suffer until
consumers recognize this in their purchasing
decisions.
Traditional accounting systems: Traditional
accounting system were not designed to enable
environmental data to be separately identified or
evaluated -such as data on waste management,
compliance with laws, insurance. There is need for
more robust information, data, methodologies, and
collection systems to allow for more integration
of these factors into decision.
Assets versus costs: Using traditional accounting
methods, end-of-pipe technologies to reduce
environmental impacts are accounted for assets,
while attempts to eliminate sources of pollution at
the source appear as costs. Similarly, investments
in training and development are recorded as costs,
while the collective knowledge and experiences
not recorded as an asset.
Short-term versus long-term: There is need
to shift the mentality and accounting practices to
look more at the long-term effects, as opposed to
simply short-term implications of decisions. The
challenge is to incorporate longer-term, less
tangible environmental and social costs into the
balance sheet rather than just measuring shortterm tangible merits.
Information not tracked adequately or not
available: Available information is often not
sufficiently accurate or detailed for decisionmaking purposes. Sometimes, the information is
not collected, but stays within different divisions of
the company, where the accountants may never
even become aware of its existence.
Comparability of data: Company disclosures
on sustainability issues are often inconsistent and
difficult to compare across a single industry.
Several sustainability threads are common to all
sectors and should be reported consistently
across industries.
The Future of Sustainability Reporting: The
Way Forward
Governments around the world have already
taken remarkable steps to make sustainability
reporting a standard practice to reach sustainable
development. Thousands of organizations in the
world are now reporting on their economic, social
and environmental performance, showing that
sustainability reporting adds value.
The government of Bangladesh has to encourage

to all that if the businesses and all other

organizations monitor and report data on their
sustainability performance, they will have the vital
information needed by executives to manage risk
and
identify
sustainable
opportunities.
Government should adopt a uniform reporting
practice to prepare sustainability reporting by all
organizations for ensuring a level playing field,
transparency, innovation, flexibility, better
regulation and progress towards sustainability.

Capacity Building: This is an urgent need to

develop in-house capabilities to assess impact of
operations in an objective manner, and measure
and monitor such capabilities, as mitigation
strategies are implemented. Now, the educational
institutions are expected to customize their
programs to include sustainability as a discipline
and Bangladesh should focus on industryuniversity linkages to develop an institutionalize
knowledge base.

The followings are the recommendations to way

forward on sustainability reporting:

Synchronizing reporting guideline with local

conditions: It is very sensitive to describe
materiality disclosure including some other
indicators of the company as per GRI guidelines
within the present local corporate structure in
Bangladesh. It requires synchronization in
Bangladesh's context based on GRI framework,
globally acceptable framework, in all sectors
including small & medium enterprises.

Increasing awareness: Awareness building

initiatives need to be undertaken for various
stakeholder communities, both at the firm level as
well as sector level. This would lead to useful
stakeholder
engagement
and
strategic
commitment of the top management, making
sustainability an imperative and ensuring reliable
and transparent disclosures.
Industry commitment: Industry has to
demonstrate a long-term commitment both at a
strategic and operational level to sustainable
business practices. This is essential for them to
realize the potential benefits as they refine their
business processes and merits for performance
measurement and success.

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Government's initiative: The government can

be a catalyst for ensuring speedy adoption of
sustainability through policy initiatives immediately
pave the way for a sustainable society committed
to sustainable development.
Civil Society: It is well accepted that the
competitiveness of a company and the well being
of the communities around it are inseparable. A

successful community can create demand for

products and can also provide a supportive
environment to business.

Conclusion
Sustainability reporting is being emerged as a
common practice of 21st-century business.
Where once sustainability disclosure was the
province of a few unusually green or communityoriented companies, today it is the best practice
employed by companies worldwide. A focus on
sustainability helps organizations manage their
social and environmental impacts and improve
operating efficiency and natural resource
stewardship, and it remains a vital component of
shareholder, employee, and stakeholder relations.
Peter Drucker, writer, professor and management
consultant told, "What you can't measure, you
cannot manage. What you can't manage,
you cannot change". Sustainability reporting is
therefore a vital step for managing change towards
a sustainable global economy-one that combines
long-term profitability measuring social justice and
environmental care.And a dedicated sustainability
report is a reflection of the company's
commitment to the issue of sustainability, which
helps companies and their stakeholders identify a
comprehensive reference point for reporting,
thereby aligning many of their CSR initiatives with
goals that can be measured and monitored.
Mahatma Gandhi said, "Earth provides enough
to satisfy every man's need, but not every
man's greed". By 2050, if current consumption
and production patterns remain the same and with
a rising population expected to reach 9.6 billion,
we will need three planets to sustain our way of
life. As such, living well within planetary boundaries
with limited resources giving upour greedy lifestyle
will be the most promising strategy for ensuring a
healthy and sustainable future for our next
generation. I humbly quote:
"A new child is born; we will have to make room
for him.
I shall make this world a habitable place for him to
live in." - ShukantaBhattacharchy

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References:
"Carrots and Sticks - Sustainability Reporting Policies Worldwidetoday's best practice, tomorrow's trend" (2013 edition,
Published by UNEP and GRI ).
"Small, Smart and Sustainable - Experiences of SME Reporting
in Global Supply Chains." (a GRI publication).
"Ready to Report? - Introducing sustainability Reporting for
SMEs." (A GRI publication).
"Sustainability Reporting and SMEs: A closer look at the GRI
published by Strategic Sustainability Consulting."
"The future of corporatereporting: toward a common vision"
published by KPMG International.
GRIwebsite:https://www.globalreporting.org
Sustainability Reporting-Practices and trends in India (2012).
Theme
of
World
Environment
http://www.unep.org/wed/2015_slogan/

Day

2015:

Empowering green initiatives with IT: A strategy and

implementation Guide by Carl H. Speshhock.
Harvard Business Review on Green Business Strategy, a
publication of Harvard Business School Press, Boston, USA.
The Sustainable MBA : A Business Guide to Sustainability by
Giselle Weybrecht (2nd Edition).
(Sustainability Report: Sustainable
Earth), published in BonikBarta, Bangladesh, November 14,
2014
How sustainability reporting is making a good journey
(https://www.globalreporting.org/resourcelibrary/StartingPoints-2-G3.1.pdf)
Sustainability Reporting- External Assurance matter
(https://www.globalreporting.org/resourcelibrary/GRI_Trends
-in-External-Assurance-of-Sustainability-Reports_July2014.pdf)

"Don't walk behind me; I may not lead.

Don't walk in front of me; I may not follow.
Just walk beside me and be my friend."
- Albert Camus