TBL Reporting Frameworks

To assist in the process of developing TBL reports, several frameworks have been developed such as the Sustainability Guidelines (Global Reporting Initiative 2006b), which provides guidance for organisations that seek to develop sets of sustainability indicators to use in TBL reporting. The Guidelines represented the first global framework for broad reporting (Coalition for Environmentally Responsible Economies 2003; Global Reporting Initiative 2006b). The Global Reporting Initiative guidelines are generic and can be used by any organisation regardless of size, industry or sector. The Global Reporting Initiative framework is based on two areas, namely, how to report and what to report. How to report includes the principles and guidelines and a range of technical protocols that provide the means to calculate aspects such as water and energy use. What to report includes standard disclosures as well as a number of sector-specific supplements such as Financial Services, Mining and Metals, Public Agency and Telecommunications (Global Reporting Initiative 2006a, 2006b). Wallage (2000) discussed a range of different TBL-style guidelines and stated that, from the range of existing standards that could be considered, the Global Reporting Initiative guidelines were the most comprehensive. In addition, a comparison of a range of different indicator development frameworks was presented by Veleva and Ellenbecker (2000) and the authors concluded that the GRI Guidelines were the only ones that covered all three TBL dimensions.

A pertinent example for event evaluation is the Tour Operators’ Sector Supplement (Tour Operators Initiative 2002), which was developed based on extensive consultations with a number of European tourism operators and practitioners (Tour Operators Initiative 2002). The aim of the initiative was to address the range of tourism-specific aspects of sustainable development within the sector. These included environmental (materials and waste), social (labour practices and training and education), economic (benefits to destination) and cultural aspects. Whilst there are strong links between tourism and special events, however, this framework offers only a general guide, and a suite of event-specific TBL indicators is needed.

The Sustainability Reporting Guidelines (Global Reporting Initiative 2006b) proposed that organisations should slowly build their capacity for TBL reporting, beginning with an informal approach that would be consistent with their current capacity. The guidelines suggested that many organisations find that they are already collecting much of the data as a matter of course, and it is a process of collating this information in the form of a report. In addition, the existing data are readily adaptable into the TBL reporting requirements (Andrews 2002). Accordingly, an incremental approach is usually taken, whereby existing measures and indicators such as key performance indicators are combined with other data. Unfortunately, this can result in a myriad of reporting formats, from environmental, health and safety and sustainability reports ( Sustainable Investment Research Institute 2002). This lack of consistency can limit the degree to which comparisons can be made of TBL reporting across a range of businesses and/or business sectors.

There is evidence that a growing number of organisations are publishing TBL-style reports, although these are also referred to as Sustainability reports and Sustainable Development reports (Brown & Fraser 2006). Figure 2.4 reveals the range of different types of reports published in Australia in 2003. The most common report was a Sustainability report (26%), followed by Environment report (20%) and Environment, Health, Safety and Community report (16%). It is also interesting to note the interchange of terms that was alluded to earlier, namely Corporate Citizenship and Corporate Responsibility. Figure 2.4 also shows that only 6% of the reports were called TBL. As evidenced by the range of reports shown in Figure 2.4, researchers in the area of TBL reporting are confronted by the need to compare the reports in order to determine the quality and the extent to which businesses are addressing sustainability reporting.

Figure 2.4 Categories of Sustainability Reports in Australian in 2003

Source: Department of the Environment and Heritage (2004), cited in Foran, Lenzen and Dey (2005, p. 16)

2.4.5

Sustainability Reporting Scorecards

To counter the confusion surrounding the range of reports, sustainability reporting scorecards emerged as a way to compensate for the inconsistencies of TBL reporting. The scorecards have been used both as a tool to evaluate the TBL reporting of individual businesses against the Global Reporting Initiative Guidelines and to enable a comparison of TBL reporting across a range of businesses, notwithstanding the variety of reports (Dias-Sardinha, Reijnders & Antunes 2002; Epstein & Wisner 2001; Hepworth 1998; Hussey, Kirsop & Meissen 2001; Mordhardt et al. 2002; Spiller 2000; SIRIS, 2002).

One of the first of these scorecards was developed by UNEP/SustainAbility, which initially produced a set of 50 environmental criteria (SustainAbility 1996). Because of the changing nature and scope of TBL reporting, however, the scorecard was modified to include social and economic perspectives. The result was a Sustainability

Scorecard, which was used for the Global Reporters Benchmark Survey (1997) and the subsequent surveys in 2000 (SustainAbility 2000) and 2002 (Robinson et al. 2002). Similarly, both Kolk (Kolk 2003; Kolk, Walhain & van de Wateringen 2001) and KPMG (2002a; KPMG/WIMM 1999) extended their reporting analyses from environmental to sustainability assessment to reflect the changes in reporting.

As a result, the scoring systems and scorecards became more conventional, notwithstanding their limitations (See, for example, Deloitte Touche Tohmatsu 2002; Sustainable Investment Research Institute 2002). For example, the scoring system used by Sustainable Investment Research Institute (2002) used a quantitative approach and scored the reports from 0 (No coverage) to 4 (Issue fully discussed) and was based on the UNEP/SustainAbility Revised 50 Environmental Criteria (SustainAbility 1997) and the Global Reporters scorecard (SustainAbility 2000). The aim was to analyse the reports and assign a score according to the degree to which each of the Sustainability Reporting Guidelines indicators was addressed. The dimensions that were covered in the analysis were management policies and systems, input/output inventory, finance, stakeholder relations and sustainable development. The report noted that there were limitations to this approach such as not all indicators being relevant to each business assessed.

There were other limitations to this approach, which were noted by Mordhardt (2001) and Mordhardt et al. (2002). For example, Morhardt (2001) compared three different scoring systems and found that the three systems significantly correlated, but one had higher averages and a shorter list of topics. Morhardt also claimed that despite the acceptance of these scoring systems by practitioners and businesses there were inherent problems. For example, because the scoring systems that were used measured the number of topics covered and the depth of discussion rather than the quality of performance, maximum scores could be obtained despite poor performances in the first instance (2001). In addition, Mordhardt et al. (2002) claimed that by aligning scores to the content of the report rather than the actual performance, companies have the potential to manipulate scores by adding a topis and discussing it. As one of the drivers of corporate sustainability is the maintenance of reputation, a favourable score from a reputable organisation could be a public

relations boon. Consequently, Jones and Alabaster (1999, p. 57) cautioned that businesses ‘must be aware of and understand the issues associated with the use of scoring systems and be cautious of reaping rewards or be ready to dispel bad publicity’. This view was also supported by Cerin (2002) who claimed that many of the reports were defined more as public relations products than as effective methodologies to control and manage the corporate performance, or more company conformance that company performance (Bhimani & Soonawalla 2005). Therefore, despite the advances in this type of analysis, the limitations are such that it would not be an appropriate framework for the TBL evaluation of special events.

2.4.6

Sustainability Balanced Scorecards

Another method of that was developed in response to the need for a broader approach to business performance evaluation was the sustainability balanced scorecard. Sustainability balanced scorecards were based on the Balanced Scorecard, which was developed by Kaplan and Norton (1996), and represented ‘a strategic management system that links performance measurement to strategy using a multidimensional set of financial and non-financial performance metrics’ (Epstein & Wisner 2001, p 2). The aim was to merge TBL reporting with a type of balanced scorecard, to develop a tool which can assist internal management and decision-making in order to help organisations to understand key risks, raise awareness and identify opportunities to improve environmental and social performance (Andrews 2002). It was further argued that this approach assists with overcoming ‘the shortcomings of conventional approaches to environmental and social management by integrating the three pillars of sustainability into a single and overarching management tool’ (Figge et al. 2002).

Bieker et al. (2001) suggested that managers face a large number of management systems on a range of topics such as quality (ISO 9000), environmental management (ISO 14000) and corporate social responsibility (SA 8000, AA 1000), however, these lack a grounding in traditional management systems. As a result, environmental sustainability remains largely separated from the traditional core business strategies and management systems, which are focused on financial performance indicators (Bieker et al. 2001).

Bieker (2002) suggested that Balanced Scorecards had limitations in three areas. Firstly, they were focused on financial aspects, secondly, they were limited to 20 indicators and thirdly, that often there was too narrow an integration of stakeholders, which resulted in some important stakeholders being excluded. A further limitation was noted by Figge et al. (2002) that balanced scorecards were firm-specific and were not readily transferable to other businesses. In short, the scorecard is a tool which can assist internal management and decision-making, thus, helping organisations to understand key risks, raise awareness and identify opportunities to improve environmental and social performance, however, the effectiveness of the tool is reliant on the development of suitable indicators (Andrews 2002).

2.4.7

Ethical Scorecard

An alternative to the sustainability scorecard is the ethical scorecard. Spiller (2000, p. 149) outlined the ethical reasons for businesses to be’ doing well while doing good’. The author developed an Ethical Scorecard based on the Balanced Scorecards developed by Kaplan and Norton (1996) and suggested that there were four P’s of ethical business which were purpose, principles, practice and performance measurements. The purpose of the ethical business is to create environmental, social and financial wealth thereby making a positive contribution to the environment and society in a financially responsible manner (Spiller 2000). The author identified ten key business practices for each of the six main stakeholder groups: community; environment; employees; customers; suppliers and shareholders. Within the framework represented by these ten groups, 60 practices were identified, which formed the Ethical Scorecard. Spiller (2000) noted that although there was a growing demand from stakeholders for businesses to report on their performance in relation to issues that affected the stakeholder, businesses were reluctant to publish such reports. The Ethical Scorecard sought to address this problem.

In summary, Elkington (1999a) stated that driving businesses towards sustainability will require dramatic changes in their performance against the triple bottom line. However, even though the 1992 Earth Summit enlightened many businesses as to what their role and responsibilities were in regards to sustainable development, there

appeared to be a lack of understanding about what had to be done. Atkinson (2000) suggested that after the 1992 Earth Summit, most governments adopted sustainable development as a notional goal, however, there was some debate concerning how businesses could contribute to this objective. Concepts such as the ‘sustainable business’ and ‘corporate sustainability’ emerged, as did a number of proposals to monitor progress towards corporate sustainability (Atkinson 2000). Atkinson (2000, p. 235) claimed that a response to this measurement problem was ‘the proposition that there is little in the notion of a ‘sustainable business’ or ‘corporate sustainability’ beyond defining a set of pragmatic guidelines whereby a corporate entity can monitor and improve its sustainability performance. The measurement issue here is to find meaningful indicators that capture the flavour of the broader sustainability debate’. Similarly, Bartelmus (1999) claimed that the more contentious debate is the assessment side of the coin. Andrews (2002) maintained that the core challenge of TBL reporting is defining an approach that is grounded in appropriate principles and that employs meaningful, pragmatic indicators.