Corporate Triple Bottom Line Reporting in Pakistan

“The companies can no longer afford the luxury of ambiguity,” states WBCSD report titled ‘Corporate Social Responsibility: Making Good Business Sense’. The trend of environmental reporting started in 1990s and a few reports came out from some very progressive companies in the world. This became a fashion with the turn of the century. In 2002, environmental reporting became a legal requirement in Denmark, France and Netherlands. Till now, this has remained as a voluntary tool without specified legal codes and requirements.

However, in many countries, guidelines and frameworks have come to fore to assist corporations in reporting. The notable among those are Best Practice Guidelines of UK (2002) and Global Reporting Initiative Guidelines (2002). The later is by far the best effort in developing a common reporting ground for companies around the world as it has developed an increased and visible interest of businesses in environmental reporting since then.

“Many multinational companies are now issuing social responsibility reports. While environmental, health, and safety reports are common, reports tackling issues such as human rights or child labor are not. In order for these reports to be useful, a global consensus needs to evolve on the type of information to be disclosed, the reporting format to be used, and the reliability of the evaluation and audit procedures”, according to the ‘Green Paper on Corporate Social Responsibility’ published on Europa, portal site of the European Union.

“CSR reports of the progressive companies showcase their social and environmental profiles on periodic basis as they highlight their financial standing to their stakeholders. Some nations require CSR reporting, though agreement on meaningful measurements of social and
environmental performance is difficult. Many companies now produce externally audited annual reports that cover Sustainable Development and CSR issues but the reports vary widely in format, style, and evaluation methodology”, states a blog on corporate social responsibility.

CSR Reporting Initiatives in Pakistan

In Pakistan, several multinationals are regularly producing their environmental reports in line with their global commitment and policy. These reports however mostly contain positive impacts and company actions and not the negative ones. Some local firms from the carpet industry, sporting goods industry and surgical industry are also partnering with government agencies, NGOs and UN agencies to further their social and economic goals and report them periodically. In particular, these firms are improving labour standards, protecting biodiversity, and providing health facilities to numerous local
communities in Pakistan.

World Wildlife Fund (WWF) took an initiative in association with ACCA Pakistan in May 2002 under the title of Pakistan Environmental Reporting Awards to promote Environmental Reporting in national and
international companies operating in the country. As a principle, PERA (Pacific Employment Relations Association) does not provide any particular guidelines of its own. Rather, it promotes the GRI guidelines.

There is a progressive trend in environmental reporting as shown under the PERA scheme which received 8 reports in the first year, 18 in the second and 12 in the third year. These reports have a varying degree of thorou-ghness, objectivity, transparency and clarity. Their formats also vary and social and economic dimensions of corporate sustainability are not very distinct.

Many specialized organizations are now working to sell the idea of CSR reporting to corporations in Pakistan. CSR Pakistan, Global Compact Pakistan, Responsible Business Initiative (RBI) and the Pakistan Center for Philanthropy (PCP) are some organizations which are promoting social and environmental responsibility reporting in the country.

In general, the multinationals and big national companies have been reporting so far. Most of the businesses that fall in SME category and the industrial sectors have never learnt the concept at all.

The Cleaner Production Institute, which is the research and development organization in the non governmental sector and works to enhance the competitive ability of industry, has partnered with more than 500 industrial units in the paper, textiles, leather and sugar sectors, through imple-mentation of environmental and energy technologies, certifications and reporting etc.

Case in Point: Programme for Industrial Sustainable Development

The CPI is currently carrying out its Programme for Industrial Sustainable Development (PISD) in collaboration with Royal Netherlands Embassy and intends to facilitate at least 43 industrial units to generate their annual CSR reports during the project life (2007-2010).

The CPI teams chose two important models and guidelines for this purpose, that is, the Global Reporting Initiative and UNIDO’s Responsible Entrepre-neurs Achievement Program (REAP). The earlier is an acceptable international model while the later provides customized guidelines for SMEs especially of the developing countries. The GRI’s G3 guidelines are more comprehensive and contain well-stated indicators and parameters. CPI and PISD teams use customized versions of G3 indicators.

So far, more than 10 reports have been submitted for approval to respective industries and will be published in due course of time. A survey of the industry is conducted through its outreach mechanism through the liaison person in the industry, Human Resource and Accounts departments, a top management representative and workers’ representatives. The data is collected in one or two visits along with the pictorial session. The missing data is collected later on in liaison with the contact person in the industry.

CPI Challenges

The main problems that the CPI’s CSR team faces are as follows:

• The CSR reporting is a brand new idea for most of the local industry.
• A lot of time is wasted in developing a rapport with the management and confidence building to sell the new idea.
• The economic data is readily available with the public limited companies while private companies either don’t want to retrieve, share and publish their data or they provide fake data.
• The hindrances in publication include religious, social and cultural values. For example, many people are reluctant to show off their philanthropy while many directors give away money in their indi-
  vidual capacity and the corporate philanthropic spending is either negligible or is not documented in their organization.
• It is very difficult to make a business case for CSR reporting and as yet intangible benefits are not lucrative for the local SMEs.
• One of the important benefits of CSR reporting is Brand Image Development. Since most of the local industry don’t have their own brands, they don’t see a business benefit in it.
• SR and environmental reporting is as yet voluntary, so reports which are already being published in the Pakistani companies are mostly developed without an established set of parameters or style, yielding non standardized, incomparable and inconsistent results and containing a good deal of non verifiable information.
• Although CSR reports are essential to give a picture of a company’s social and environmental performance, they have limitations as tools for inclusive dialogue. The amount of complex information demanded by reporting best practice means that reports can make dull reading for non-expert audiences.

Still however, the PISD targets in CSR reporting will be completed in anticipation that the voluntary action is in fact more helpful and shows that business is intrinsi-cally involved and committed to bring socio environmental and economic welfare of the communities of their operation.

References

http://europa.eu/scadplus/leg/en/lvb/n26039.htm
http://kuliahlagi.blogspot.com/2007/08/
corporate-social-responsibility.html
www.cpi.org.pk
www.pisd-pak.org

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