164. Corporations around the world are making progress in adopting responsible business practices. Yet serious implementation gaps remain. The Global Compact is a strategic policy initiative established by the Secretary-General for businesses that are committed to aligning their operations and strategies with 10 universally accepted principles in the areas of human rights, labour, environment and fighting corruption.

165. A number of other voluntary schemes exist within the private sector that can help investors, companies and other stakeholders to measure their environmental and social impact. The Global Reporting Initiative and the International Integrated Reporting Committee, for example, provide a template for corporate reporting on environmental and social performance. The Carbon Disclosure Project provides information to investors and other stakeholders on companies’ carbon liabilities. Some companies have recently introduced their first environmental profit and loss accounts, detailing the full economic cost of natural resources used and environmental effects caused by providing products to customers.

166. However, the uptake of such reporting measures remains limited: currently, only 3 per cent of Fortune 250 companies utilize integrated reporting, which aims to offer investors and regulators a single report addressing a company’s overall performance on economic factors as well as environmental, social and governance practices. For a real step change to take place, mandatory reporting should be considered.

167. Capital markets can play a major role in driving this change, by encouraging companies to improve their reporting. In Turkey, recent attempts by the Istanbul Stock Exchange to initiate a sustainability index provide an interesting example of progress in this area (see box 17).

Recommendation 29 (originally in A.)
163. Governments should develop standards for production and resource extraction to support the transition to a sustainable global economy. They should further encourage widespread adoption and uptake by business of voluntary sustainability principles derived from international agreements and conventions.