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The Corporations’ Non-Financial Disclosures

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The American Institute of Certified Public Accountants’ Jenkins Report may be considered as one of the major documents that has provided the foundations for non-financial disclosures. Notwithstanding, there were other guidelines that were developed by other non-governmental organizations (NGOs), including; the Global Reporting Initiative, AccountAbility, Accounting for Sustainability (A4S), the World Intellectual Capital Initiative (WICI), the Enhanced Business Reporting Consortium, the CDP (formerly known as the Carbon Disclosure Project), the International Corporate Governance Network, the Sustainability Reporting Standards Board and the Climate Disclosure Standards Board, among others. The International Standards Organization (ISO), Forest Stewardship Council (FSC), Greenpeace, Rainforest Alliance and Home Depot Certifiable, Fair Trade and the US Department of Agriculture’s USDA Organic Labelling, among others, have formulated uncertifiable, multi-stakeholder standards and instruments to support organizations in their CSR communication. In addition, certain listed corporations are adopting Fortune’s reputation index, the KLD Social index or RepTrak (Camilleri, 2017). Such measures require corporate executives to assess the extent to which their organization behaves responsibly towards the environment and the community. Despite the development of these guiding principles and indices, their appropriateness remains doubtful (Camilleri, 2015).

In 2010, the development of ISO 26000 had represented a significant milestone in integrating socially and environmentally responsible behaviors into management processes. ISO 26000 was developed through a participatory multi-stakeholder process as the International Labor Organization (ILO) had established a Memorandum of Understanding (MoU) to ensure that ISO’s social responsibility standard is consistent with its own labor standards. In fact, ISO 26000’s core subject on ‘Labor Practices’ is based on ILOs’ conventions on labor practices, including; Human Resources Development Convention, Occupational Health and Safety Guidelines, Forced Labor Convention, Freedom of Association, Minimum Wage Fixing Recommendation and the Worst Forms of Child Labor Recommendation, among others. Moreover, ISO’s core subject on ‘human rights’ is based on the Universal Declaration of Human Rights (that was adopted by the UN General Assembly in 1948). On the other hand, many academic commentators argue that ISO 26000 has never been considered as a management standard (Camilleri, 2017). The certification requirements have not been incorporated into ISO 26000’s development and reinforcement process, unlike other standards, including ISO 9000 and ISO 14001. Notwithstanding, ISO 14001 belongs to a larger set of ISO 14000 certifications that conform with the European Union’s Eco-Management and Audit Scheme (EMAS).

The European Union (EU) has developed its non-binding guidelines for the non-financial disclosures of large, public-interest entities that engage more than 500 employees (Stubbs and Higgins, 2015; EU, 2014). The European Parliament mandated Directive 2014/95/EU on non-financial reporting; that was subsequently ratified by the European member states. Therefore, large undertakings are expected to disclose material information on their ESG behaviors. These entities are required to explain any deviations from their directive’s recommendations in their annual declaration of conformity, as per the EU’s “Comply or Explain” principle (Camilleri, 2015; EU, 2014). Their non-financial disclosures include topics, such as; social dialogue with stakeholders, information and consultation rights, trade union rights, health and safety and gender equality, among other issues. Moreover, the organizations’ environmental reporting could cover; material disclosures on energy efficiencies, the monitoring of efficiency levels their energy generation capacities, assessments on the co-generation of heating facilities, the use of renewable energy, greenhouse gas emissions, water and air pollution prevention and control from the production and processing of metals, mineral industry, chemical industry, waste management, livestock farming, etc. (Camilleri, 2015). Therefore, large undertakings are expected to bear responsibility for the prevention and reduction of pollution. The EU recommends that the large organizations implement ILO’s Tri-partite Declaration of Principles on Multinational Enterprises and Social Policy, as well as other conventions that promote the fair working conditions of employees. It also makes reference to the OECD Guidelines for Multinational Enterprises, the 10 principles of the UN Global Compact, the UN Guiding Principles on Business and Human Rights, and mentions ISO 26000 Guidance Standard on Social Responsibility (EU, 2014). Following, the EU’s mandate for non-financial reporting, it is expected that 6,000 European public interest entities will be publishing their sustainability reports in 2018, covering financial year 2017-2018 (GRI, 2017).

 


Additional Reading:

Camilleri, M.A (2015). Environmental, Social and Governance Disclosures in Europe. Sustainability Accounting, Management and Policy Journal. 6 (2), 224 – 242. Emerald.  http://www.emeraldinsight.com/doi/abs/10.1108/SAMPJ-10-2014-0065 Download this paper

Camilleri, M.A. (2015). Valuing Stakeholder Engagement and Sustainability Reporting. Corporate Reputation Review, 18 (3), 210-222. Palgrave Macmillan DOI:10.1057/crr.2015.9 http://www.palgrave-journals.com/crr/journal/v18/n3/full/crr20159a.html Download this paper

Camilleri, M.A. (2017). Measuring the corporate managers’ attitudes toward ISO’s social responsibility standard. Total Quality Management & Business Excellence. (forthcoming). http://dx.doi.org/10.1080/14783363.2017.1413344 http://www.tandfonline.com/doi/full/10.1080/14783363.2017.1413344 Download this paper

Camilleri, M.A. (2017). Corporate Sustainability, Social Responsibility and Environmental Management: An Introduction to Theory and Practice with Case Studies. Springer, Heidelberg, Germany. ISBN 978-3-319-46849-5 http://www.springer.com/us/book/9783319468488

CSRWire (2015). Environmental, Social and Governance Reporting in Europe. http://www.csrwire.com/blog/posts/1574-environmental-social-and-governance-disclosures-in-europe

 

 

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Quality Education for Smart, Inclusive and Sustainable Growth

imagesThe promotion of quality education has re-emerged as an important policy objective across many countries during the past decade. For instance, the aims of Europe 2020 strategy (that was launched in 2010) were to improve the EU’s competitiveness and productivity that underpin a sustainable social market economy (EU, 2010 a,b). The strategy identified three priorities as the main pillars of this strategy:

  • Smart growth—developing an economy based on knowledge and innovation;
  • Sustainable growth—promoting a more resource efficient, greener and more competitive economy; and
  • Inclusive growth—fostering a high-employment economy delivering economic, social and territorial cohesion (Pasimeni & Pasimeni, 2015).

Significant investments have already been made across the globe to raise relevant competencies that help to improve social outcomes (e.g. social inclusion, social equity and social capital) since these are known to affect educational and labour market success.

In a similar vein, the fourth United Nations’ Sustainable Development Goal (SDG4) and its 10 targets represent an ambitious and universal agenda to develop better skills for better lives. Five of its 10 targets are concerned with improving the quality of education for individual children, young people and adults, and to give them better and more relevant knowledge and skills. During the last few decades; major progress has been made towards increasing access to education at all levels; from school readiness among young children through achieving literacy and numeracy at primary school, increasing enrolment rates in schools particularly for women and girls to equipping young adults with knowledge and skills for decent work and global citizenship (UNSDG4, 2015). In this light, the SDG4’s targets are the following (UNSDG4, 2015):

Quality education

By 2030, ensure that all girls and boys complete free, equitable and quality primary and secondary education leading to relevant and Goal-4 effective learning outcomes;

By 2030, ensure that all girls and boys have access to quality early childhood development, care and pre-primary education so that they are ready for primary education;

By 2030, ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university;

By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship;

By 2030, eliminate gender disparities in education and ensure equal access to all levels of education and vocational training for the vulnerable, including persons with disabilities, indigenous peoples and children in vulnerable situations;

By 2030, ensure that all youth and a substantial proportion of adults, both men and women, achieve literacy and numeracy;

By 2030, ensure that all learners acquire the knowledge and skills needed to promote sustainable development, including, among others, through education for sustainable development and sustainable lifestyles, human rights, gender equality, promotion of a culture of peace and non-violence, global citizenship and appreciation of cultural diversity and of culture’s contribution to sustainable development;

Build and upgrade education facilities that are child, disability and gender sensitive and provide safe, nonviolent, inclusive and effective learning environments for all;

By 2020, substantially expand globally the number of scholarships available to developing countries, in particular least developed countries, small island developing States and African countries, for enrolment in higher education, including vocational training and information and communications technology, technical, engineering and scientific programmes, in developed countries and other developing countries. By 2030, substantially increase the supply of qualified teachers, including through international cooperation for teacher training in developing countries, especially least developed countries and small island developing states (UNSDG4, 2015).

However, The Programme for International Student Assessment (PISA) the world’s most widely used global metric to measure the quality of learning outcomes, as well as its adult version, the Programme for the International Assessment of Adult Competencies (PIAAC), underlined that although many countries may have  their children in school; only a proportion of them achieve adequate levels of proficiency by the end of lower secondary education (PISA, 2012). This finding does not augur well for economic, social and sustainable development.

Bolder efforts are required to make even greater strides to achieve the sustainable development goal of quality education for all. A centralised educational policy may help to achieve the desired outcomes. Well-laid out curricula are capable of successfully developing the full potential of lifelong learners. In addition, the government’s policies of taxation and redistribution of income may also help to counteract inequalities in some segments of society.

The provision of quality education introduces certain mechanisms that equip people with relevant knowledge and skills that they need for today’s labour market. Active employment policies are required to help unemployed people find work. The overall objective of the employability programmes is the reintegration of jobseekers and the inactive individuals into the labour market as well as the provision of assistance to employed persons to secure and advance in their job prospects.

 

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