Checklist helps trade unions assess sustainability reports

By May 18, 2009News

The Trade Union Advisory Committee to the OECD (TUAC) recently published the first ever trade union “checklist”* on the Global Reporting Initiative (GRI). The checklist, which is designed to be applied to the GRI’s most recent G3 Guidelines, both identifies and explains eleven “expectations” that should be met by corporate sustainability reports.

Increasingly, companies are facing scrutiny to ensure that published sustainability reports connect with material corporate goals, as part of strategic operations rather than mere CSR-oriented communications or marketing objectives. Reports prepared to the G3 standard are in practice meant to serve as a basis for assessing the social and environmental impacts of a company. However, TUAC reminds that “such reports should not be regarded as proof or certification of ‘good’ social or environmental behaviour by the reporting organisation.”

While not advocating “for or against the GRI or for or against corporate sustainability reporting in general,” TUAC reports that the checklist was created as a guidance tool for worker representatives with an interest in monitoring and assessing the sustainability reporting process of companies.

The eleven components of the checklist follow, and the complete document is available in English, French, Spanish, and Portuguese directly from the TUAC website:

MONITORING THE REPORTING PROCESS

1. Does management’s interpretation of the G3 encompass a rights-based approach to labour and employment issues as defined under national and international laws and regulations? The G3 allows considerable latitude in interpretation in the implementation by company management.

2. Did management consult with trade unions when preparing the reports and has it recognised industrial relations as one of the most important forms of “stakeholder engagement”? The likely pitfalls and mistakes are well understood and it is important that these are avoided during the reporting process by management.

3. Does the scope of the report cover all operations, entities and workforce that come under significant influence of the company, regardless of legal ownership or contractual terms?

MINIMUM REPORTING REQUIREMENTS

4. Does the report provide an introductory statement by the CEO referring to internationally agreed standards (such as the ILO core labour standards)? Information on changes in the workforce, restructuring operations and the share ownership structure, including for the purpose of shareholder remuneration, should be included in the general presentation.

5. Does the report provide information on works councils, board level employee representation and other regulated or independent forms of worker representation and on what sustainability issues have been addressed by these bodies

6. Does the report contain information on at least 10 performance indicators and are a third of these labour and employment-related? It is important to give particular attention to indicators LA1 (workforce by employment type and contract), LA4 (coverage of collective bargaining agreements), LA5 (Minimum notice period) and LA7 (rates of OHSE incidents)

A TARGET REPORTING STANDARD

7. Is adherence to internationally-agreed standards referenced in the report; e.g., OECD and ILO instruments on corporate responsibility? Does disclosure on stakeholder engagement refer to collective bargaining and any other forms of agreement or dialogue with trade unions; e.g., the Global Unions International Framework Agreements?

8. Does the report contain specific information on management policy and procedures to uphold labour and human rights within the company’s operations; including freedom of association and collective bargaining?

9. Does the report include at least 20 performance indicators? In addition LA1, LA4, LA7, particular attention should be paid to LA2 (employee turnover), LA14 (gender ratio of basic salary) and HR5 (freedom of association).

SUSTAINABILITY REPORTING FOR RESPONSIBLE INVESTMENT

10. Does the report disclose how the company communicates with shareholders on sustainability issues?

11. Do trade union-appointed pension trustees and other trade union-appointed directors whose financial institutions make them shareholders of the reporting company actively promote reporting of non-financial performance?