FINAL CAPSTONE PAPER - COMPLETE DRAFT

The ensuing questions focused on the types of corporations and nonprofit organizations that do and do not report on their sustainability performance, as well as the incentives and obstac

Sustainability reporting has grown tremendously over the past twenty years For-profit companies have issued a greater number of sustainability reports, and new reporting frameworks have both proliferated and developed Despite this progress, the number of nonprofits

participating in sustainability reporting has remained low, especially in comparison to the privatesector The goal of this project is to assess whether sustainability reporting can and should be utilized by NGOs The team evaluated the most widely accepted sustainability frameworks as well as the benefits, incentives and obstacles to NGOs reporting The group also explored the best practices of sustainability reporting and noted the importance of tangential topics such as third-party assurance, environmental impact and the importance of tone and voice in reports Ourproject was composed of literature reviews, the development of evaluation criteria and a case study, in which the team evaluated Fordham University’s ability to report on their sustainability performance Based on this research, it is essential that nonprofits should participate in

sustainability reporting and use the Global Reporting Initiative (GRI) framework to report Thesereports should also be assured by an external assurance agency

2012, more than 5,500 organizations, including over 60 percent of the Fortune Global 500 companies, issued sustainability reports (“Sustainability” 1) There has been an increase in the

demand for accountability from wide range of corporate stakeholders, such as investors,

politicians, journalists, community groups, environmentalists, consumers and NGOs (Corporate Register 2001) Businesses are facing increasing pressure to be transparent about their business behaviors and environmental impacts (Savitz 54)

The roots of sustainability reporting can be traced back to the social movements of the

1960’s In many ways, Rachel Carson’s Silent Spring catalyzed the birth of the environmental

movement; its publication fueled consumer demand for companies to disclose information about the health and ecological implications of products, and questioned the sustainability of a market that treated natural resources as disposable commodities (Savitz 45) Later, large NGOs formed

to voice the concerns of civil society and began to put pressure on companies to disclose

information about their operations to the public (“Towards Transparency” 12)

Sustainability gained further international recognition and eventually found a place in international dialogue with the publication of the 1987 Brundtland Report, which defined

sustainable development as that which “meets the needs of the present without compromising theability of future generations to meet their own needs” (United Nations 41) The report advocated for an integrated view of economic and environmental policy, rather than viewing them as separate issues (“Sustainability Reporting Program” 1) This was the beginning of an

international commitment to sustainable development and coincided with the creation a number

of nonfinancial reporting frameworks, such as the Global Reporting Initiative, the

Eco-Management and Audit Scheme (EMAS) and the U.N Global Compact, which introduced a

unified set of indicators with global application (Sustainability Reporting Matters 13) These

frameworks also encompassed the market-based social activism of the 1970’s and 80’s that centered on the nonfinancial performance of firms (Brown 9) In the late 1980’s, the first

sustainability reports were published as a response to emissions data that was released to the public in the U.S 1987 Superfund Amendments and Reauthorization Act, also known as the

“right to know” legislation, which created the Toxic Release Inventory (Baue, 1)

Globalization, mass media and the Internet have increased the demand for more public information about how organizations conduct their business and daily operations

(Environmental, Social and Sustainability Reporting on the World Wide Web, 7) In the 1990’s, reporting became more widely practiced and included broader issues of sustainability in addition

to environmental impact, such as social and economic implications (Baue 1) As a result, the percentage of reports that focused solely on the environment fell from 63 percent to 42 percent from 2000 to 2002, while sustainability reports that focused on the social, economic and

environmental factors increased 10 percent

As more companies and select nonprofits have started to report on their sustainability performance, several developments have helped advance sustainability reporting, including the creation of sector-specific supplements and frameworks, the dissemination of tools for first-time reporters and the advancement of third-party assurance Sector-specific frameworks were

developed to cater to certain industries that wanted to report on their sustainability performance (Hohnen 6) However, sector-specific applications are often necessary because different

industries use specific metrics, address divergent sustainability issues and require reporting protocols tailored to their sector (Hohnen 6) These frameworks have increasingly been traded for sector-specific supplements, which help diverse industries report on the same framework and have been spearheaded by the GRI (Hohnen 6) These supplements highlight the most relevant impacts of specific industries by providing detailed indicators related to certain sustainability issues and with sector-specific metrics (Hohnen 6) Along with these supplements, frameworks

and sustainability reporting advocates began to produce helpful “how to start reporting” guides (Starting Points 1) The GRI has made the most advancements in this category by providing

“Learning Series” publications and the GRI certified training program (Starting Points 1-22) These programs and resources have helped entry level reporters understand the framework, learn how to gather indicator data and produce quality reports (Starting Points 20-22) Third-party assurance, which serves to verify the accuracy, materiality and transparency of a report, has also become an integral part of sustainability reporting (Towards Transparency 8) In 2003, nearly 40 percent of sustainability reports included external assurance, a 23 percent increase from just ten years before (Towards Transparency 8) These advancements have made it easier to report for organizations of all sectors and all sizes

The size and reach of the NGO sector is growing In terms of funds and power, NGOs arebecoming comparable to corporate and governmental organizations Nonprofit organizations often exist to fill government and market gaps in providing services and products NGOs have filled those gaps increasingly on “nearly every matter of public concern” (Nelson 4) The Ford Foundation, for example, has a $10 billion endowment, has employed over 550 people, has offices all over the world, and works on over 25 diverse initiatives such as HIV/AIDS

discrimination and climate change responses in rural communities (Financial Statements 2) (“Issues and Initiatives” 1) (Wilhelm 1)

With an increase in power and size is likely to come a larger environmental footprint and

a greater number of affected stakeholders Many argue that any organization with the potential tosignificantly affect people and ecosystems should be held accountable for those impacts both good and bad In terms of stakeholders, one in five individuals are involved with a NGO in some way; NGO employees make up 7 percent of the workforce, and one in eight are service sector

workers (Nelson 5) Since the goal of many NGOs is social, political or environmental

betterment, many argue that it is important that NGOs take responsibility for their impacts When

a powerful group affects a relatively less powerful one, the former should be held accountable for decisions that affect the latter (Bendell 6)

Since many NGOs are widely trusted by their constituents and have positive public images, the influence of NGOs is deeply felt across many public sectors and organizations (Nelson 5) For example, companies and governmental departments looking to boost their own reputations might seek the approval of or a relationship with a NGO (Nelson 5) As a result, NGOs are capable of building extensive, powerful and influential networks The watchdog nature of many NGOs has had a significant influence on corporate behavior, especially in the extractive sector (Nelson 6) Because of this powerful influence, many argue that NGOs should acknowledge their corporate partners and make relationships public (Nelson 6)

As the nonprofit sector continues to grow, proponents of sustainability reporting argue that nonprofit organizations should explain their operations, outline their sustainability impacts and publicly track their development progress Because monetary profit is not the main objective

of an NGO, an integrated framework is necessary to track social and environmental performance.Not only does reporting encourage accountability, but it also has the potential to improve

operations and reveal internal problems NGOs often have poor internal governance; Reviewing internal data and structures for a sustainability report can improve the efficiency and ethics of a nonprofit’s decision-making process (Bendell 14-15) Therefore, developing a framework that addresses characteristics and issues specific to NGOs could potentially benefit NGO programs, a variety of stakeholders and other organizations

Despite these arguments for nonprofit transparency and sustainability reporting, obstacles

— many of which are tied to cost — still remain (Bendell 14, 62-63) Given that many for-profit companies voluntarily produce sustainability reports and argue that it has been an invaluable tool, this project explored if and why nonprofits should participate in sustainability reporting (Lyndenberg 2).

Methodology

To tackle this research project, a theoretical basis to guide the group’s decisions and project design was developed via a comprehensive literature review and analysis, which entailed analyzing published, peer-reviewed studies, published sustainability reports and expert

interviews The team assessed existing reporting frameworks and researched trends, themes and issues related to the difference between corporate and NGO reporting This comprehensive approach allowed the team to become acquainted with current research and practices related to sustainability reporting

The group determined four themes to serve as a basis for research questions that would provide ample information for the primary literature review and guide the subsequent research and reviews The first theme is the basis of our overall report, and in essence, the current

challenge: Should nonprofits produce sustainability reports, and if so, how? The ensuing

questions focused on the types of corporations and nonprofit organizations that do and do not report on their sustainability performance, as well as the incentives and obstacles to nonprofit reporting To determine why there is a lack of reporting in the nonprofit sector, it was important

to first assess why sustainability reporting is increasing as a trend in the corporate world, and then to use this trend to highlight the key differences between the two sectors to provide reasons for the subsequent differences in reporting (Ernst & Young) This theme also provided insight as

to why nonprofits chose to report or not report, partially based on best practices and reporting

indicators This research theme was designed to yield data that could help determine if and how sustainability reporting can be incorporated into nonprofit strategic planning.

The second research theme included assessing the reasons and subsequent trends found among nonprofit organizations that do report This theme helped the group rank and analyze reporting criteria, and to select a case study to apply our research to a concrete organization Because reporting is not mandatory in the nonprofit sector, this research centered on finding specific nonprofits that do and do not report so that similarities and difference could be

determined and analyzed, therefore providing insight into the incentives and disincentives for reporting (Sustainability Reporting Guidelines 6) After noting these trends, research was

conducted to determine if there is a link between reporting and minimizing an organization’s environmental impact Although the definition of sustainability includes environmental, social and economic prosperity, it is important to assess organizational reporting as a tool for increasingsustainable business practices (Epstein 19) This theme made it possible for the group to identify the most important criteria when comparing different reporting frameworks, and to choose the best framework to apply to our chosen client

The third theme focused on the best practices among all sustainability reports, regardless

of the sector, and how organizations can ensure they are following these best practices when gathering data and presenting their sustainability reports Research included identifying how organizations that report ensure the accuracy, quality and transparency of their data, and how they communicate this process to their audience This information not only provides more insight

as to which reporting frameworks are most effective, but also helps illustrate if and how the frameworks would need to be adjusted for a specific client Additionally, because one common incentive to report is improving an organization’s image, it was important to research effective

methods of ensuring the quality of data in reports This research investigated whether there are ways to assure the objectivity of data, which ensures stakeholder confidence, as well as the credibility and reliability of the report (Sustainability Reporting Guidelines 2000-2011, 2) Lastly, research touched on whether language or tone affects the presentation of organizational information, and thereby the credibility of the report and organization.

Because invalid data undermines the main goal of sustainability reporting, the final themefocused on problematic areas in sustainability reports and how current practices can be

improved Specifically, it was important to ask why organizations may be compelled to

manipulate data, whether organizations are penalized for providing invalid data, and whether there are any measures to prevent this

With the research from the literature review serving as a basis, the group analyzed and compared six existing sustainability frameworks: the Global Reporting Initiative (GRI),

International Organization for Standardization (ISO), Climate Registry, UN Global Compact, Carbon Disclosure Project and the Eco-Management and Audit Scheme (EMAS) These

frameworks were selected because they are among the most widely used, accepted and credible standards around the world and therefore have the most data and a significant number of

corporate and nonprofit participants The frameworks were critically assessed to determine why they are commonly used, and how efficiently they allow organizations to report on their

sustainability performance The frameworks were also critiqued for their shortcomings that may compromise comparability and transparency Because some of these frameworks were initially designed for corporate use, the group used the information gathered in the literature review to analyze how effective these frameworks are for NGOs and nonprofits to report Finally, based onthe literature review, the team assessed which qualities and criteria from these frameworks to

include as part of an ideal framework customized for a nonprofit organization.

In conjunction with our literature review, the analysis of these frameworks helped the group determine the best five criteria for a sustainability reporting framework:

comprehensiveness, cost, efficiency, participatory and third-party assurance After selecting thesecriteria, the group analyzed each framework to determine which of these criteria were

represented This comparison led the group to determine which frameworks would serve as the most comprehensive template for a feasible nonprofit reporting framework Because the GRI

represented more of these criteria than any other framework, it was chosen as our framework,

because it is comprehensive, cost-effective, efficient and participatory

After choosing the GRI as the best and most comprehensive reporting framework, there were three remaining steps to our project methodology: analyzing the GRI, choosing a local nonprofit as a case study and determining what a quality sustainability report looked like The group chose to apply the GRI to an existing nonprofit organization to further assess if it would befeasible for a nonprofit to report using the GRI Before doing so, the group led a comprehensive analysis of both the G3.1 framework and the GRI NGO Sector Supplement to better understand the framework indicators and processes for reporting A comprehensive list of all indicators was assembled for each GRI application level (A, B and C), and the group compared indicators and requirements across the three levels to determine the requirements for each This included

identifying how many profile disclosures, management performance disclosures and

performance indicators were required per level This process helped the group determine the typeand quantity of data required to complete any given application level With this information, the group was able to choose a nonprofit based on the data they already collected and identify which level this nonprofit would be able to report

Although literature reviews played an extremely important in this project, textual analysiscouldn’t fully convey the practical issues and obstacles in sustainability reporting The group set out to choose an existing nonprofit as a case study to further our research and understanding of sustainability reporting First, the group listed criteria that an ideal case study would meet Then, the team compared five nonprofits to this criteria and found that Fordham University was our best match The group used Fordham as a case study to see what it would be like to complete a GRI report and to gain more intimate knowledge on obstacles and incentives to reporting via an in-person information session.

Within the scope of this project, the group wanted to choose a nonprofit that had much of its information publicly available so that the group could easily complete a sample GRI report This way, the group could spend its valuable in-person information session asking more complexquestions about sustainability reporting Furthermore, the group wanted to choose a nonprofit that was representative of both environmental and non-environmental nonprofits to gain a deeperunderstanding of all nonprofits On top of choosing a nonprofit that had a multitude of public information available and encompassed most of the NGO world, the group sought a nonprofit that had a great number of stakeholders and a large sphere of influence In other words, the groupwanted to choose a large nonprofit that has the resources and the ability to report The team believes that larger nonprofits should lead the way in sustainability reporting and set an example for smaller nonprofits who may be hesitant about disclosing their sustainability performance

Once we determined this criteria, we evaluated six nonprofits: The Lower East Side Ecology Center, WEACT, GrowNYC, the Nature Conservancy, Environmental Defense Fund and Fordham University The group easily found the mission, history, programming information and internal structures of these organization However, for The Lower East Side Ecology Center,

WEACT and GrowNYC, some of this informational was not detailed enough to complete the GRI Moreover, the Lower East Side Ecology Center, GrowNYC, WEACT, the Nature

Conservancy and Environmental Defense Fund do not disclose their environmental performance and do not fully disclose their community impacts and financial information online Besides the lack of information, every nonprofit the group reviewed except for Fordham has an entirely environmental mission Of those environmental nonprofits, only the Nature Conservancy and Environmental Defense Fund are large nonprofits with the resources to spearhead reporting

Fordham University, however, met all the of the group’s criteria Fordham University is, above all, an institution of higher learning that seeks to educate students, faculty and the

community However, Fordham has also committed itself to sustainability by forming a wide Sustainability Commission, partaking in the PlaNYC Challenge and setting sustainability goals The university’s educational goal represents non-environmental nonprofits, and the

school-school’s secondary commitment to sustainability is representative of environmental nonprofits

Fordham, like all nonprofit universities, also has a wide array of stakeholders and a large scope of influence due to the nature of the stakeholders of universities that the group believes sustainability reporting to be especially important for this type of nonprofit organization A university as large as Fordham has thousands of stakeholders, including alumni donors to adjunctprofessors However, the vast majority of and arguably the most important stakeholders are students — students on the brink of entering the workforce who will become CEOs, employees, entrepreneurs, investors and parents They are the stakeholders of the future, and their values regarding sustainability will be a pervasive influence on the behavior of organizations

everywhere This is especially important at this point in time, when NGOs are expanding in size, numbers and power, and many of these thousands of university students will have stake in a

nonprofit organization in some capacity

Universities are a type of nonprofit organization that have significant environmental, social and economic impacts and a large and varied population of stakeholders They also have the resources to partake in sustainability reporting, and should ultimately do so But universities have the potential to do more with their sustainability reporting By engaging their massive student stakeholder populations in sustainability reporting, they are simultaneously introducing and emphasizing the concept to a vast amount of people that may disperse, disseminate and insistupon this practice to whatever organizations in which they find themselves involved in the future

Although the group had chosen the GRI as the best sustainability reporting framework, the group believed it was important to identify the best practices of reporting for all frameworks The group conducted literature reviews and analyzed various sustainability reports in an effort to

determine the best qualities of sustainability reports To begin, the group read The Triple Bottom Line: How Today’s Companies are Achieving Economic, Social, and Environmental Success - And How You Can Too by Andrew Savitz and Karl Weber and Making Sustainability Work: Best Practices in Managing and Measuring Corporate Social, Environmental, and Economic Impact

by Mark J Epstein, John Elkington, and Herman B Leonard The first book stressed the

importance of abiding by the triple bottom line — measuring sustainability as economic, social and environmental success (Savitz and Weber) The second book provided more specific models and measurements of best practices that should be present in all reports in order to improve future reports and organizations as a whole (Epstein)

The group subsequently analyzed the GRI reports of specific organizations and

companies to further research best practices and to gain a better understanding of what an

outstanding sustainability report looks like To begin, the group analyzed and compared Ceres’

2009 sustainability report and Oxfam’s 2010-2011 report, both of which are Level C GRI reports.Analyzing the best and worst practices of these reports gave the group a starting point for further analysis of other GRI reports To gain a better understanding of variety (i.e indicators, data inclusion, writing) in Level C GRI and across GRI levels reports, the group decided to further analyze Level C and Level A reports of nonprofits and corporations

After gaining a deeper understanding what a comprehensive sustainability report entails, the group was able to approach our chosen case study, Fordham University, with further questions about obstacles nonprofits face in reporting The group also put together a comprehensive and exemplary Level C report for our case study

Findings

Throughout our research and analysis, there were several key recurring themes First for foremost, nonprofit organizations should report on their sustainability performance Reporting helps organizations identify weaknesses and inefficiencies in their internal processes and allows them to develop ways to strengthen long-term processes (Bendell 26) Both these benefits would

be invaluable for the development and improvement of any organization (Bendell 26) Because sustainability reporting and risk assessment and management are integrated processes, reporting could be a valuable tool for companies carrying out large, long-term projects that are vulnerable

to a variety of business risks Though there is an initial cost to create a report, it becomes an invaluable assessment and income-generating tool once completed For example, reporting metrics allows organizations to enact changes that result in cost savings in terms of energy efficiency, waste reduction, water use reduction and more (Schwarz 58-59) Similarly, for

nonprofit organizations, reporting could provide insight on project risks and inefficiencies, and

thus improve program outcomes and social profits (Nelson 26).

Many corporations also view sustainability reports as an increasingly important tool for attracting investors, and communicating their performance and future projections to interested parties, which gives investors and donors the opportunity to compare organizations within the same sector (Nelson 20) Since reporting helps organizations disclose information to pertinent parties, those who do report are generally seen as more reputable, more internationally

competitive and more trustworthy to stakeholders (Nikolaeva 137) Furthermore, NGOs have a significant influence on corporate behavior; if an NGO demonstrates a commitment to

sustainability, they can better promote similar practices in the corporate world (Nelson 4-5) Reporting can be used as a form of social auditing and aid companies in improving social

performance and promoting ethical behavior (Ebrahim 814) The development of social and environmental information systems themselves also allows organizations to better collect and analyze pertinent data and to act to improve sustainability and financial performance in the years

to come (Ebrahim 816)

Many argue that because the core mission of many environmental NGOs is centered on sustainability, they should therefore disclose their footprints in an effort to abide by their own mission and to encourage other organizations to do the same (Moore 86) Moreover, since certainenvironmental have historically demanded sustainability disclosures from corporations on account of transparency and accountability, the nonprofits themselves should report on their own impact (Nelson 26) Practicing what they preach would help them gain credibility among

corporations and nonprofits alike (Nelson 5)

Sustainability reporting can serve as an efficient mechanism for stakeholder engagement, which serves as another incentive to environmental disclosure Especially in the corporate sector,

relationships between vendors, purchasers, corporations and consumers are becoming

increasingly complex as corporations expand beyond regional and national borders (Savitz 48)

In an increasingly transparent world, maintaining stable business operations is entirely dependent

on a healthy relationship between partners, suppliers, distributors and marketers (Savitz 49) As transparency increases, reputation and brand association are important assets and can drastically drive the value of an organization (Savitz 51) For these reasons, stakeholders have never been more integral toward the success of a business or organization; both internal and external

stakeholders can wield a great influence over the success and future of a company (Savitz 180) Sustainability reporting is a way for organizations to demonstrate to stakeholders their

commitment to positive behavior, and a mechanism to involve their internal and external

constituents in future business practices Sustainability reporting is an effective way to engage and appease stakeholders, and is a significant incentive for both first-time and long-time

reporters

Sustainability reporting is an important vehicle for organizations to communicate

progress and future projections to both their internal and external stakeholders, and can help an organization identify realistic targets for economic, social and environmental improvement By reporting on sustainability and setting long-term targets to communicate progress, an

organization can more easily identify new markets, prevent crisis, reduce the cost of everyday operations, reduce harm to customers, and identify emerging risks and management failures early(Savitz 33) Organizations can be motivated to report based on its capacity to help protect and grow their business and allow them to achieve their mission more effectively and more

responsibly

Despite these incentives, obstacles do exist for reporting However, the group found that

many of them are merely perceived or exaggerated When first taking on a new project, such as asustainability report, there are generally many differences between what is perceived and what actually needs to be done due to the nature of the project being unfamiliar and new These

perceptions have scared organizations away from creating sustainability reports because they may expect a difficult task ahead of them, when in actuality they are more than capable of completing a report The most general obstacles include that organizations face include issues with the reporting process, cost, third party assurance, resource allocation and beliefs

One of the first perceived obstacles is that many organizations do not view sustainability reporting as central to their overall mission Regardless of an organization’s mission,

sustainability reporting can be used as an important management tool that allows you to track data and information relevant to your mission, attract investors and donors, improve public image, foster stakeholder engagement and explore new markets and opportunities (Savitz 21-39).The triple bottom line is essential to any organization regardless of the core mission;

sustainability reporting helps an organization recognize and address its long-term viability, and how it fits into the current social, economic and environmental fabric (Savitz 26) Many

organizations chose not to report on sustainability because they view the practice as nonessential and irrelevant to their core mission Because social, economic and environmental responsibility

is essential for the survival and success of any organization, sustainability reporting is a crucial tool to help achieve a mission or initiative of any scope

Many niche NGOs believe that existing reporting frameworks cannot facilitate a

sustainability report for their organization Though all NGOs differ in size, scope and mission, many sustainability reporting frameworks are flexible and adaptable for use by diverse

organizations Frameworks such as the GRI allow its users to select different levels of disclosure

depending on the data collected by and available to a specific organization, and also allow its users to use supplements to aid in reporting for multiple fields (GRI Application Levels) Each ofthese different levels includes different disclosures and allows an organization to select a level that they can best report on (Evers 22-23) The range of available reporting frameworks and sector supplements allow organizations to tailor their sustainability report to their needs.

Many small nonprofit organizations believe they do not have the proper resources needed

to create a sustainability report Nonprofits often argue that they cannot report due to high costs, lack of record keeping and a small workforce (Bendell 14, 62-63) Many also argue that since sustainability reporting doesn’t fit into their mission statements, they would prefer to not spend their limited resources on reporting, especially if their stakeholders don’t vocally demand

sustainability transparency (Ebrahim 816-817) Rather, nonprofits believe their limited budgets, donor money, time and staff resources should be spent providing services or programming that

do fit into their mission statements (Ebrahim 816-817) In terms of monetary costs, reporting becomes an invaluable assessment and income-generating tool once completed Although the cost of using reporting frameworks ranges, there are reporting frameworks, like the GRI, that are available free of charge Furthermore, the initial cost for the framework could be compensated for by the benefits of reporting; for example, reporting metrics allows organizations to enact changes that result in cost savings in terms of energy efficiency, waste reduction, water use reduction and more (Schwarz 58-59) Furthermore, many of these organizations already have the non-monetary resources available and are collecting the data they need to report For example, since the creation of the Kyoto protocol, participating countries have been obligated to monitor and report net changes in greenhouse gas emissions by source and removals by sinks in a

transparent and verifiable manner (UNFCCC 3) Hiring interns or volunteers to work a few hours

a week could help nonprofits gather already available data Overall, reporting should be seen as

an investment that will benefit the organization and pay for itself very quickly over time

Since the incentives to report on sustainability far outweigh reasons and obstacles to not report, it was important to determine the best reporting practices The group found these

practices to be transparency, the inclusion of third party assurance, engagement of stakeholders, and the creation of feedback mechanisms to keep track of the organization’s progress Other best practices include an effective presentation of the report, which included clear visual aids and balance of qualitative and quantitative data; using internal assessment tools such as setting goals,admitting failures and showing progress; and choosing an appropriate framework for reporting

The first best practice necessary for a quality report is addressing transparency A report that is transparent is one that addresses a wide number of indicators, including social,

environmental or economic factors Transparency can be defined as the entire disclosure of information in which display the impacts and affect the decision-making of stakeholders

(Sustainability Reporting Guidelines 6) It also embodies the procedures, assumptions and ultimate processes in which such disclosures are constructed (Sustainability Reporting

Guidelines 6) It allows the reader to interpret the company’s current impact clearly based on all relevant data (Transparency in Reporting on Anti-corruption 4) Transparency is necessary during all stages of reporting so that organizations have a realistic baseline from which to begin their evaluation and with which to set goals (“Transparency in Reporting on Anti-corruption” 17) For example, the Ceres report is not transparent because it didn’t explain its data collection process and had vague numbers and figures that were confusing (Gardiner 16)

The team determined that third-party assurance is integral to the quality of reports and a best practice in sustainability reporting Evolving auditing practices, namely diversity of

assurance standards and type of assurance providers, shape the quality of sustainability assurancestatements for all stakeholders (Perego 4) This practice adds to the transparency of the report and allows an independent and unbiased third party to evaluate the quality of an organization’s sustainability reports Third-party assurance identifies, corrects and prevents misleading and inaccurate information (Sustainability Reporting 26) Third-party assurance also provides readers

an independent, presumably objective, assessment of the data, thus giving the report more

credibility (Marx 50) This can increase the confidence of both external and internal stakeholdersabout performance information and the included data (Marx 50) Sustainability reports that are transparent, accurate and reliable will improve stakeholder trust and the legitimacy of the

organization’s operations (Marx 40)

Different types of assurance practitioners can provide third-party assurance The two main practitioners are accountants and financial auditors and specialist consultants (Hodge 183) While they have different backgrounds and focus on distinct aspects in terms of reporting, both assurance providers have their own advantages to conducting their work (Hodge 183)

Accountants are acknowledged as high-quality professionals and have built a positive reputation from their long-established history of expertise of auditing corporate financial statements (Hodge183) As a result, they are typically hired more frequently and are generally larger in size than specialist consultant firms (Hodge 183) Specialist consultants focus more on the overall

completeness and balance of the report (Hodge 183) They provide more recommendations and commentary about the organization’s processes and their internal systems (Hodge 183) Though third-party assurance is an effective way to ensure a report’s transparency and neutrality, it can

be expensive, timely and out of reach for many nonprofits with small staffs and budgets (Nelson 23-24) This is a dilemma that the group has not been able to resolve through research or

practice The GRI also continues to struggle with the question of assurance, which is why the GRI doesn’t require, but highly recommends, third-party assurance.

Stakeholder involvement should also be incorporated into the reporting process to ensure transparency and accountability (Gao, Zhang 735) Organizations must determine who their stakeholders are, which ones affect them the most, and what are the best ways for

communicating with them in a manner that allows them to understand the stakeholders’ needs and perspectives (Gao, Zhang 724-725) An NGO’s stakeholders can include donors, the

community the NGO represents, the people affected by the issues the NGO represents, the corporations the NGO coordinates with, the employees of the NGO, the government and other NGOs (Unerman, O’Dwyer 355) Although the stakeholders of any given organization can hail from diverse backgrounds, they can all affect the stability, progress and future of the NGO (Unerman, O’Dwyer 355) Each stakeholder has a particular interest in the company, and

incorporating these varying concerns and interests allows organizations to become more

sustainable by including many perspectives (Gao, Zhang 728-729) Stakeholders have an impact

on the long-term survival and the success of the organization (Collins 524) It is therefore important to improve relations, organization legitimacy and reputation with both internal and external stakeholders (Nelson 26)

For experienced reporters, the creation of feedback mechanisms is especially important because it allows organizations to incorporate external stakeholder suggestions and data updates into subsequent reports Feedback mechanisms are considered to be important measurement toolsthat connect performance to sustainability principles (Epstein 126) It measures performance and allows for continuous improvement by facilitating corrective actions and measures (Epstein 126-127) Oxfam is an example of an organization that incorporates external stakeholder suggestions

into sustainability reporting Oxfam has developed partnership principles that serve as a

mechanism for engaging with stakeholders and incorporating their feedback into their operations and initiatives (Oxfam 10) Oxfam also connects with its supporters through surveys to

understand how the confederation is perceived in different markets (Oxfam 11) Their annual survey provides information on their audience and allows them to identify areas for development(Oxfam 11)

Updating the reports also allows readers to clearly identify baseline measurements and previous targets A company should update its goals as a reflection of the progress already made

to ensure further progress in the future (Marriott International 2) Charts or data outlining this progress allows for open communication of performance evaluation as shown in the Marriott International Sustainability Report Update of 2010 Updates should be incorporated into the mostcurrent reports and be explained to show what has been accomplished and where the

organization currently stands on its impact (Marriott International 7)

Presentation of content is just as necessary as transparency and stakeholder engagement Effective presentation of a report entails using clear visual aids and metrics, balancing qualitativeand quantitative material, and using distinct language and tone throughout the report It is

important to represent data in a clear and concise way to make the report easy to read and

understand (Kolin 58) Using visual aids, such as graphs, charts and images, is perhaps the most effective way to portray complex data (Kolin 60) However, visual aids must be accurate and representative of the original data Although third-party assurance can help ensure that visual aids do not distort data, it is up to the reporting organization to honestly evaluate its own

performance (Kolin 58-59) Though positively spinning a report may seem beneficial to improve public image, this can greatly damage an organization’s reputation if their misrepresentation is

revealed to the public (Savitz 244) Thus, it is better for the company to report with honesty, transparency and third-party assurance.

A well-designed report can enhance the accessibility of the report and is therefore crucial

to good reporting For example, Ceres has an attractive report design because it is divided into eight clear sections, is uniform in length, contains subheadings and has graphs and visual aids under the appropriate section (Gardiner 12) While quantitative data is important to ensure clarity, there needs to be a balance between qualitative and quantitative information (What to Report 27) Qualitative data should complement visual aids and metrical data so the reader can easily understand it (What to Report 27) Language should be candid but balanced with a

professional tone to serve a mass audience (The Sustainability Tool 1) The language and tone of the report is essential in effectively communicating the ideas of the report to the reader

(“Assessing the Tone of Exxon Mobil’s Environmental Reporting” 1) Word choice should be appropriate for all audiences and the narrative of a report should be unbiased and comprehensive

If a goal of sustainability reporting is to help organizations become more efficient,

environmentally conscious and ethical, then reports should set goals, admit failures and

eventually show progress To do this, reports should disclose a baseline measurements and use them to set goals to reduce their impact When setting goals, organizations should establish concrete and attainable targets and explain how they can be achieved Doing so will help

organizations measure and track its sustainability impact and demonstrates an organization’s commitment to sustainability (Maclaren 187) During this process, it is important for the

organization to admit failures to recognize their shortcomings and reassess its goals (Kasser 3121)

Finally, it is imperative that organizations chose the most appropriate framework for their

organization when deciding to report on sustainability Upon our framework evaluation, the group chose the GRI and its NGO Sector Supplement as the most appropriate framework for NGOs (Sustainability Reporting Guidelines 6) The GRI is the strongest framework because it meets four out of the five criteria that the group determined to be necessary for a sustainability reporting framework: it is comprehensive, cost effective, efficient and participatory Although theGRI failed to meet the criterion of third-party assurance — it highly recommends it — this could

be easily changed to meet our criteria (GRI Application Levels 3) The group determined that theGRI would be the most appropriate framework for NGOs because it can be applied to various types of organizations differing in size and sector (Sustainability Reporting Guidelines 3) The GRI tracks the economic, environmental and social performance of organizations, therefore representing the principles of the triple bottom line (Sustainability Reporting Guidelines 3) Its reliability can be traced back to the framework’s underlying principles of transparency,

inclusiveness and auditability (Evers 22-23) The GRI also provides multiple supplements that can guide different organizations to report on sector-specific issues All of these aspects together create a sufficient framework to provide the base reporting for our chosen NGO

The GRI’s mission is to develop “globally applicable guidelines for reporting on the economic, environmental and social performance of corporations, governments and non-

governmental organizations” (GRI 1) Today, the GRI is the world’s most widely used voluntary reporting framework — 80 percent of Global Fortune 250 companies adhere to GRI

Sustainability Reporting Guidelines (KPMG, 2011) In 2011 alone, 273 of 345 sustainability reports published in the United States followed the GRI framework, a 50 percent increase from the previous year (CSRwire, 2012)

Because the GRI measures social, economic and environmental performance through a