Global Reporting Initiative

Besides auditing processes, an increasing number of corporations prefer publishing their own CSR reports, which allow them to approach CSR as a more sophisticated and strategic tool. Some stakeholders may also find them easier to read and understand. But the question remains: How to develop a CSR framework that may be used as a benchmark across all sectors and organizations?

Such framework was developed by more than 3 000 experts from business and civil society under the name of Global Reporting Initiative (GRI). In fact, GRI appears to be one of few organizations that stressed the importance of stakeholder diversity, which contributed to the formulation of GRI guidelines. Perhaps, this is the reason why GRI has become the most trusted framework used by 3 922 organizations globally. ⁸⁷ Originally, the GRI framework was developed for companies only, but later the usage spread among other institutions too, e.g. European Investment Bank or MTR Corporation, a provider of public transportation in Hong Kong. Draft version of sustainability reporting guidelines GRI was released in 1999 and the real version appeared in 2000 as the first generation of GRI guidelines. The second generation (G2) was developed after the World Summit for Sustainable Development in Johannesburg in 2002. The third generation (G3) was launched in 2006. The fourth generation (G4) is under preparation with an expected launch in 2013. The usage of GRI guidelines is growing every year. 95% of 250 world’s largest companies regularly publish sustainability reports, and 80% out of them use the GRI guidelines.⁸⁸

GRI framework covers economic, social and environmental performance while using a comprehensive set of indicators. In other words, it provides a triple bottom line framework for sustainability reporting with the objective of making the sustainable reporting as common as financial reporting across industries and service sectors. The set of CSR indicators according to GRI G3 guidelines consists of economic (9),

87 GRI Sustainability Disclosure Database, 2011.

88 Global Reporting Initiative, 2010/2011, p.7.

environmental (30), labor practice and decent work (14), human rights (11), society performance (8) and product responsibility (9) indicators. Clearly, GRI’s priority is environmental reporting since the highest number of indicators is attributed to environmental area. Lite-On follows this GRI framework in its CSR reporting too.

According to the GRI’s statistics, 59% of Chinese companies (including Hong Kong SAR) and 37% of Taiwanese companies reported on their CSR activities in 2011.⁸⁹ Specifically, 47 Chinese companies (including Hong Kong) and 11 Taiwanese companies followed the GRI methodology when reporting, and had their reports checked by an independent auditor. Such a small figure implies that GRI methodology is still in its initial phase in Taiwan. Perhaps, some companies in Taiwan are not willing to disclose information and are afraid of a potential harm that greater transparency might bring with.

Once the company decides to use GRI framework for its CSR reporting, it should notify the GRI organization. Only after this notification may stakeholders find the company in question in the GRI database. Some Taiwanese corporations (Lite-On, TPO, Inventec Appliances, BenQ, Chunghwa Telecom) registered their reports with GRI in the years of 2008 and 2009, but did not do so in 2010 or stopped using the GRI framework.

Below is the list of Taiwanese companies, which published their sustainability reports based on GRI framework in 2010 and reported this information to GRI. The data were collected from the GRI database accessed as of June 2012:

89 Global Reporting Initiative, 2010/2011, p.7.

Company Application level

Status

Advanced Semiconductor Engineering A+ Third party-checked

China Steel Corporation A+ Third party-checked

Chimei Innolux Corporation A+ Third party-checked

Taiwan Semiconductor Manufacturing Company A+ Third party-checked

Chunghwa Picture Tubes A+ Third party-checked

CTCI A+ Third party-checked

Asus A+ Third party-checked

Qisda A+ Third party-checked

United Microelectronics A+ Third party-checked

AU Optronics A+ Third party-checked

China Trust Financial Holding B+ Third party-checked

In Win Development B GRI-checked

Taiwan Power Company A Self-declared

Taipower A Self-declared

Feng Tay Group B Self-declared

Hannstar B Self-declared

Acer B Self-declared

IIYAMA Corporation C Self-declared

Figure 10: List of Taiwanese companies that reported about their CSR based on GRI standards in 2010.

Source: GRI Sustainability Disclosure Database, 2011.

The application level indicates how much information the company is willing to disclose and the number of indicators reported on (A the most, C the least). The sign

“+” means that the report was assured externally. Organizations, which use the GRI framework, should have their sustainable reports registered with GRI in order to be included in the GRI database. However, it should be noted that as long as the organization notifies GRI about the usage of GRI framework in its report, the report automatically enters the GRI database regardless the quality of the report. Thus, a

closer examination of reports is needed in order to understand the organization’s real performance.

Although GRI is regarded as the most credible CSR framework, all the CSR reports are self-declared. In order to add credibility to companies’ self-declarations, organizations sometimes choose to have their reports checked by the GRI itself or by an external verification body. In Taiwan, only the first 11 companies in the table above had their reports verified by third-party assessment providers (BSI, SGS and DNV in Taiwan), which are certified to verify this kind of sustainability reports. Yet, some stakeholders wonder about the credibility of A+ rating granted to some companies. For example, AU Optronics is known for repetitive serious violations of environmental laws in Taiwan,⁹⁰ but it reaches A+ consecutively. This paradox may be explained by two facts: first, auditors sometimes work with false information provided by the company. In the worst scenario, employees are trained how to respond to auditors in order to cover illegal or unethical practices. Second, the auditing schemes are young and change significantly every year. Thus, auditors may find themselves inexperienced with audits and facing new challenges every time they inspect a facility. Additionally, auditors are few in number (only three providers as mentioned above) and thus their shared experience limited, too.

Interestingly, the Ministry of Economic Affairs in Taiwan published in its Report on CSR implementation in Taiwan⁹¹ data, which differs from the GRI database.

According to the Ministry, there were 9 companies that applied to the level A+ in 2010 in Taiwan: CTCI, AU Optronics, Chimei Innolux, Taiwan Semiconductor Manufacturing Company (TSMC), United Microelectronics, Chunghwa Telecom, CHC Resources Group, Bayer Taiwan and Cathay Pacific Airways. In fact, only 5 of these companies are registered in the GRI database (CTCI, AU Optronics, Innolux, TSMC and United Microelectronics). Moreover, Bayer Taiwan belongs to the German Bayer Group and Cathay Pacific Airways is a Hong Kong company.

90 For example Taipei Times, March 17, 2012.

91 CSR in Taiwan, 2011e.