Over recent years we hear more and more about the Sustainability Report (also called the Social Responsibility Report), but many still do not understand exactly what this is or what function it serves. It is often confused with the Financial Statements: a document that a company is obliged by law to prepare every year, in order to report to the national government (now to the European government as well) the economic situation that outlines costs, proceeds, and profits.
The Sustainability Report is similar in form, but not in substance; it is also a document that enables periodic communication, on a voluntary basis, concerning the results of the economic situation of the Organisation, while also reporting the social and environmental impact that it has on the territory where it operates.
The Sustainability Report is a document prepared for a readership consisting of all the stakeholders, in reference to all those categories of persons who are involved or come into contact with the activities carried out by a specific company, a public agency, or even an association: citizens, employees, those who have economic relations with the business, agency or association on the territory, communities, suppliers, local authorities, and journalists.
So we are speaking about large and diversified groups, every business must enter a very precise mindset in that it has responsibilities towards each of them.
In the green book of the Commission in 2001, the European Union defines Social Responsibility as “The voluntary integration of social and environmental issues of companies into their commercial operations and in their relations with the parties involved.” Even the Ministry of the Interior, six years later, defined it as follows: “The social responsibility report is the result of a process with which the administration reckons with decisions, activities, results, and the use of resources over a specific period, in such a way as to enable citizens and different stakeholders to know and formulate a judgement on how the administration interprets and carries out its institutional mission and its mandate.”
As of today there are still no binding laws or regulations that impose a uniform method, but there are guidelines like those of the Global Reporting Initiative, a no-profit group founded in Boston in 1997 that reports the standards within which the companies can act in demonstrating their commitment to sustainability and the contents to be included in the Sustainability Report.
In mid-October 2016 the GRI published new standards that have replaced previous ones as of 1 July 2018. These are 36 guidelines to be followed in order to draft a transparent and homogeneous Sustainability Report that covers a long series of topics: the emissions of greenhouse gases, the hydraulic footprint, energy consumption, policies adopted with workers, etc. Companies, by doing so, can follow these indications to publish a Sustainability Report that is comprehensive from a viewpoint of the aspects treated by the indicators and draft detailed reports on individual topics.
Directive n.95 of 2014 (2014/95/EU), incorporated only at the end of 2016 by the Parliament and the European Council, made this type of report obligatory; but not for all businesses. In fact, only “large businesses that constitute bodies of public interest and the bodies of public interest that are holding or parent companies of a large group, in each case with an average of more than 500 employees, in the case of a group, to be calculated on a consolidated base.”
The term “consolidated base” is intended as a consolidated report that meets specific criteria established by law: the total of the assets of the financial statements must be greater than 20 million euro or, alternatively, the total of the net proceeds from sales and services must exceed 40 million. Moreover, the same directive indicates that this should not prevent Member States from asking for the communication of information of a non-financial nature of companies or groups other than businesses that are subject to this directive.”
The principle expressed by this directive is that of “comply or explain”: European businesses will have to communicate their policies in terms of sustainability or will have to explain the reason why they did not do so.