The SSE Initiative was launched in 2009 by the UN-supported Principles for Responsible Investment, the United Nations Conference on Trade and Development, the United Nations Environment Programme Finance Initiative, and the UN Global Compact. The SSE Initiative seeks to explore how stock exchanges can work together with investors, regulators and companies on environmental, social and corporate governance issues, and encourage responsible long-term approaches to investment. Member exchanges voluntarily commit to promoting these principles.

Other exchanges that have joined the SSE Initiative include BM&FBOVESPA (Brazil), the Bombay Stock Exchange, Borsa Istanbul Stock Exchange, Egyptian Exchange, Johannesburg Stock Exchange, NASDAQ OMX and New York Stock Exchange Euronext.

Click for press release (link to SSE Initiative website).

The WBCSD is a CEO-led organisation of over 200 companies that seeks to create a sustainable future for business, society and the environment, through thought leadership, effective advocacy, sharing of best practice and the development of innovative tools.

The report, Business Guide to Water Valuation: an introduction to concepts and techniques, builds on an earlier publication, Water valuation: Building the business case, and seeks seeks to ensure entities account for the real value of water they are using to respond to growing water demand and stressed water supplies.

The introduction to the report notes:

Water can have a high value but a low or zero price, as it can be withdrawn for free or is supplied at a subsidized price. The price of water indicates its financial or market value, but rarely reflects the full cost of supplying it or the full amount people would be willing to pay for it.

The guide argues that as water demand continues to rise and outstrips supplies, water costs to business will escalate and supplies may be threatened. In this context, the document argues two cases for businesses to undertake water valuation:

Two sets of drivers are pushing and pulling businesses towards undertaking water valuation. On the one hand is the underlying global and regulatory trend towards natural capital and water valuation and improved water pricing, while on the other is the evolving business case and potential benefits to be gained.

The guide suggests that water valuation should always start with a qualitative valuation (a scale of value, such as high, medium or low) before moving to a quantitative valuation, which is based on quantifying physical units or indicators associated with the values and should reflect actual "value" such as a number of people or yield affected, rather than simply the volume of water consumed. Once these initial steps are determined, a monetary valuation is undertaken which determines a monetary value, e.g. value of water in particular catchments for particular industries. The "total economic value" (TEV) concept may also be utilised to allow monetary value estimates to be incorporated for environmental and social values, to compliment market-based economic values, but even then the guide argues that broader social and ecological aspects may need to be considered when valuing water to ensure all elements of human well-being are considered. The guide outlines the main valuation techniques that can be used to determine water-related values.

The guide also outlines the business applications of water valuation, including operations and management, pricing and sustainable financing, product development and marketing, environmental and social considerations and reporting performance. For example, water valuation processes may assist in investment decisions such as the optimal location for business operations, or long-term pricing decisions for an entity's products and services, or cost-saving initiatives such the identification of water-saving and conservation measures.

On the topic of reporting performance, the guide notes the strong linkage with the concepts in the report with integrated thinking and integrated reporting:

Water-related valuation can help enhance the level and usefulness of information provided externally within company accounts and reports. Putting monetary values on externalities such as GHG and air emissions, and water consumption can help shareholders understand how sustainable a company is and the extent of possible future liabilities. In addition, it can highlight the extent to which a company is providing positive impacts through, for example, pollution prevention, pollution removal activities and habitat enhancements. As the concepts of integrated reporting and accounting and demonstrating net positive impacts take off, the number of companies including valuation of water (and other environmental and social parameters) within their accounts and company reports should escalate significantly.

Click for access to the guide (link to the WBCSD website).

The draft taxonomy is designed to allow entities preparing sustainability reporting in accordance with the GRI's 'G4' Guidelines to tag sustainability data in reports. It builds on an earlier taxonomy which was developed in collaboration with Deloitte Netherlands, who are also collaborating with GRI on the revisions proposed.

The taxonomy is open for comment until 25 October 2013 and the GRI has scheduled a webinar to discuss it on 4 October 2013.

Click for more information (link to GRI website).

The paper on 'connectivity' notes themes such as the linkage between 'integrated thinking' and 'integrated reporting', the need to convey a holistic view of strategy, governance, performance and prospects, that connectivity does not mean 'monetisation', and that connectivity is "enhanced when the integrated report features a logical structure, linked sections, cross-referencing and navigation devices such as icons, color coding or other tools". It also notes that communications technology such as extensive business reporting language (XBRL) play a critical role in sharing and connecting information electronically.

The 'value creation' background paper relates the concept to the other fundamental integrated reporting concepts of the business model and capitals, noting that inputs of capital are transformed through the entity's business model to produce both positive and negative effects. It then goes on to conclude that an integrated report should allow for the assessment of whether an entity's business model affects the wider context that supports or threatens value creation in the short, medium and long term.

Click for access to the background papers (link to IIRC website).

CDP is a not-for-profit organisation providing a global system for companies and cities to measure, disclose, manage and share environmental information. The Climate Disclosure Standards Board (CDSB) is a special project of the CDP and provides a framework for disclosure about the risks and opportunities that climate change presents to business. CDP, CSDB and IIRC consider their roles to be complementary, "on the basis that reporting on the use and depreciation of natural capital – including carbon, energy, water and forest commodities, is integral to Integrated Reporting (<IR>) and a key pillar on which <IR> is based".

The MoU follows an earlier agreement between the IIRC and the World Intellectual Capital Initiative (WICI), which seeks to promote cooperation between the organisations in "ensuring that 'intellectual capital' is reflected as a crucial and essential source of... value creation within Integrated Reporting".

These agreements follow broader agreements between the IIRC and the International Federation of Accountants (IFAC), International Accounting Standards Board (IASB) and Global Reporting Initiative (GRI), and may be considered the 'next phase' of alliance creation between the IIRC and organisations that focus on particular topics that will commonly play key roles in integrated reporting under the IIRC proposed international integrated reporting framework. Comments on the IIRC's Consultation Draft of its proposed framework closed on 15 July 2013, and the IIRC has announced an intention of producing a first version of its finalised framework by the end of calendar 2013.

Click for (links to IIRC website):

• Press release on IIRC-CDP-CDSB MoU
• Earlier press release on IIRC-WICI MoU.

The letter explores the benefits of integrated reporting in the context of continuing concern about streamlining of existing reporting and the broadening of reporting beyond pure financial reporting, but notes concerns about entity's preparedness to move to an integrated thinking and reporting model:

In today’s business environment, there is general agreement that various aspects of the current business reporting framework need to be streamlined. As well, there is increased demand for environmental, social and governance information that has the potential to affect investment decisions to be better integrated and connected in one external report, instead of using today’s separate reporting strands. In our view, however, few organizations currently have sufficiently integrated and robust systems and processes or an integrated thinking mindset necessary to generate a reliable integrated report

On the issue of demand for integrated reporting, the letter note "we see little evidence, at least in Canada, that providers of financial capital are demanding an integrated report" and "there will need to be clearly demonstrated capital allocation benefits to encourage widespread voluntary adoption".

In terms of the IIRC's expectations of finalising the proposals by the end of 2013 , the letter suggests the IIRC's pilot programme should be a key driver of the finalisation process, which may warrant a delay:

The concept of an integrated report as proposed by the IIRC is both new and complex. Accordingly, we are pleased that the IIRC has established a pilot program for both preparers and investors. The current workplan, however, calls for version 1 of the Framework to be published in December 2013, and for the pilot program to conclude in September 2014. There is much to be learned from the pilot program about issues with the Framework and how it can best be applied. Therefore, to maximize these insights, we believe the pilot program should be extended beyond September 2014. As well, we believe version 1 of the Framework should not be published until the pilot program is complete, to enable revisions to the draft Framework to consider everything learned from the pilot

The letter also outlines various other concerns about the IIRC's proposals, including such matters as the prescriptive nature of some terminology used, the level of detail required in integrated reports, a need for a more integrated discussion of 'capitals', whether the 'business model' concept should be defined, potential confusion on the definition and application of 'materiality', and the interaction with statutory reporting.

CPA Canada was formed at the beginning of 2013 by the Canadian Institute of Chartered Accountants (CICA) and The Society of Management Accountants of Canada (CMA Canada), which are currently undergoing the final phases of unification. The comment letter effectively represents the views of both antecedent organisations.

Click for access to the comment letter (link to CICA website).

The new materials are (are links to GRI website):

• Overview of changes in standard disclosures between G3 and G4
• Overview of changes in standard disclosures between G3.1 and G4
• G4 Frequently Asked Questions
• Slide deck: Main Features of G4
• Video materials from the G4 track of the recent GRI Conference where G4 was launched 

An overview of the G4 is available in out earlier story GRI updates sustainability reporting guidance.

The new MoU are:

• MoU between SASB and CDP signed for an initial period of three years. The purpose of the MOU is to promote greater understanding, visibility and support for the development of disclosure standards for climate change-related and sustainability issues. Under the MOU, SASB will utilise CDP’s data as evidence for determining the materiality of climate change-related issues in more than 80 industries. Please click for the press release on the CDP website.
• MoU between CDP and GRI to promote the harmonisation and clarification of corporate sustainability reporting guidelines, standards and frameworks. CDP and GRI will work together to improve the consistency and comparability of environmental data, make corporate reporting more efficient and effective and ease the reporting burden for companies. Please click for the press release on the CDP website.
• MoU between GRI and CSR Europe signed for an initial period of three years. Against the backdrop of the recent EU Commission proposal on non-financial reporting, CSR Europe and GRI seek to build a productive relationship to exchange information in support of enhanced sustainability management and transparency, delivering on the broader EU goals to build capacity. They will also explore the opportunity to host a European Center of Excellence that could accelerate the awareness and capacity building of companies, investors and governments on integrated performance and reporting. Please click for the press release on the GRI website.

We have already reported earlier that the GRI and United Nations (UN) Global Compact have recently renewed their MoU aimed at ensuring alignment of the guidance of the two organisations on sustainability performance and reporting. The press release is also available on the GRI website.

The Panel was convened in July 2012 by United Nations (UN) Secretary-General Ban Ki Moon to advise on the global development framework beyond 2015 when the existing Millennium Development Goals (MDGs) are targeted to be completed. The MGGs were themselves established following the UN Millennium Summit in 2000 and target eight goals, including alleviating poverty, education, gender equality, environmental sustainability and building a global partnership for development.

The Panel's report, A New Global Partnership - Eradicate Poverty and Transform Economies Through Sustainable Development, recommends twelve universal goals. The ninth goal, relating to managing natural resource assets sustainably, includes a call to "publish and use economic, social and environmental accounts in all governments and major companies", noting:

We embrace the positive contribution to sustainable development that business must make. But this contribution must include a willingness, on the part of all large corporations as well as governments, to report on their social and environmental impact, in addition to releasing financial accounts. Already about one quarter of all large corporations do so. We suggest that a mandatory ‘comply or explain’ regime be phased in for all companies with a market capitalization above $100 million equivalent.

The report notes that the measures of Gross Domestic Product or profit are not themselves sufficient to measure progress and achieve the wider sustainable development goals. It states:

This leaves out the value of natural assets. It does not count the exploitation of natural resources or the creation of pollution, though they clearly effect growth and well-being. Some work is already being done to make sure governments and companies do begin to account for this: the UN System of Environmental-Economic Accounting, the Wealth Accounting and Valuation of Ecosystem Services and corporate sustainability accounting have been piloted and should be rolled out by 2030. More rapid and concerted movement in this direction is encouraged

In noting that similar principles should also apply to governments, the report states in its tenth goal around governance and effective institutions, that publishing of accounts, including sustainability accounts, "brings ownership and accountability" and "encourages societies to measure more than money". This links to commentary around the ninth goal:

National accounting for social and environmental effects should be mainstreamed by 2030. Governments, especially in developed countries, should explore policy options for green growth as one of the important tools available to promote sustainable development. Besides protecting natural resources, these measures will support a movement towards sustainable consumption and production. And, if sustainable consumption is to be a part of everyday life, as it must, tomorrow’s consumers will need to be socially aware and environmentally conscious.

The report calls for any new goals to be accompanied by an independent and rigorous monitoring system, including a "data revolution for sustainable development" initiative which would improve the quality of statistics and information available to people and governments.

Click for press release (link to Panel website).

Background on the three reports is outlined below:

Sector topics

Sustainability Topics for Sectors: What do stakeholders want to know? (link to GRI website), resulted from research which had the objective of collecting documentation from different stakeholder groups identifying sustainability topics considered to be relevant by them in relation to the different business activity groups: business associations, labour representatives, civil society organisations, information users, and experts.

The report provides information on 52 different business activity groups across numerous industry sectors, dividing the identified sustainability topics into three categories (economic, environmental and social), listing the topic names and specifications, providing references to supporting documentation and identifying the constituency that supports the topic. The report notes the lists "are to be considered as an initial point of reference when organizations or information users are identifying sustainability topics they wish to assess" and, as they result from a research project rather than through the GRI's normal due process, are not considered part of the GRI Reporting Framework.

Sustainability content of integrated reports

This report, titled The sustainability content of integrated reports - a survey of pioneers (link to GRI website), outlines the results of combined quantitative and qualitative research undertaken by GRI to review the different ways in which self-declared ‘integrated reports’ are taking shape around the world. The research encompassed a review of 756 reports published between 2010 and 2012 in accordance with the GRI Guidelines where the reports were identified as 'integrated', and further surveys of 52 companies that consistently issued 'integrated reports' in all three years.

Some highlights of the report's findings include:

• The number of 'integrated' reports were highest in the sample were from South Africa, the Netherlands, Brazil, Australia and Finland, largely reflecting regulatory developments in those countries
• Top sectors preparing 'integrated reports' were financial institutions, energy utilities, energy and mining
• Approximately a third of all integrated reports clearly embed sustainability and financial information together, and more reports are being titled 'integrated report'
• Around half of all integrated reports are two separate publications (annual report and sustainability report) published together under one cover
• Companies embarking on integrated reporting do so for many purposes, including seeking efficiency gains, to encourage integrated thinking and break down 'silos', provide a 'one stop shop' to stakeholders, or because it "seems like a logical and natural thing to do when sustainability is already embedded in their core business"
• Stakeholders have responded positively to integrated reporting initiatives.

Assurance

The third report, The external assurance of sustainability reporting (link to GRI website), aims to help sustainability reporters and report readers understand the external assurance of sustainability reporting. The report explains the concept and use of external assurance of sustainability reports (noting differences with external audit of financial reporting), describes issues and processes to consider, and explains the role of assurance for reporters using the G4 version of the GRI Sustainability Reporting Guidelines.

In related news, the GRI and United Nations (UN) Global Compact have announced the renewal of a Memorandum of Understanding between the two organisations, aimed to ensure alignment of their guidance on sustainability performance and reporting. The recently released fourth version of the GRI sustainability reporting guidelines ('G4') already incorporate the Global Compact's ten principles in the areas of human rights, labour, the environment and anti-corruption.