This has stayed the same: comprising 20 criteria, the Sustainability Code is a source of orientation for businesses. It assists companies with their strategic management and future orientation. Customers and investors have greater transparency and means of comparison as a result: reports drafted in compliance with the Sustainability Code provide information on a company’s sustainable business strategy as well as the rules and processes it implements in order to achieve social and ecological goals. In its initiative, the German Council for Sustainable Development outlines the topics of overriding importance to the green economy. The Code can be applied by all companies regardless of their size or legal form.
The transparency initiative launched by the German Council for Sustainable Development follows on from existing, voluntary reporting standards. Last year’s introduction of the G4 sustainability reporting guidelines by the Global Reporting Initiative (GRI)
triggered a review of the Sustainability Code.
The number of EFFAS indicators
has changed. These have shrunk from 19 to 16, while the GRI indicators have risen by one to 28 in total. The indicators complement the information contained in the Code criteria by incorporating quantitative information that is especially crucial for comparing information furnished by companies. The latest sets of indicators are currently being integrated into the database, after which it will be possible to choose between GRI G3.1 and GRI G4
standards or EFFAS KPIs for ESG. Until 31.12.2015, declarations of conformity can be issued on the basis of the GRI G3.1 set of indicators. This period marks the GRI transition phase.
The content of the Code criteria themselves has been brought into line with the definition of the forthcoming EU Directive on the disclosure of non-financial and diversity information. As a result, information provided on ecological goals and processes, for example, no longer relates exclusively to products but also services. The relevance of sustainability issues for a company’s operative business has been articulated even more. Redundant items have been removed and the requirements placed on declarations of conformity concretized, in terms of both the terminology and the reporting formats.
By updating the Sustainability Code, the German Council for Sustainable Development is reinforcing its goal of advancing sustainability and making the sustainability performance of companies transparent and comparable – in Germany and in the Single European Market. The paths that nation states need to follow in order to realize this will no doubt vary. This will also most likely be reflected in the implementation of the EU Directive by 2016. Some countries have, for years, introduced legislation to advance sustainability reporting. In turn, others are pressing ahead with market implementation, such as the Greek Sustainability Code partner, QualityNet Foundation
. This foundation is planning to offer a sustainability index on the Athens stock exchange and to help Greek businesses become more competitive by virtue of the “Sustainable Greece 2020”
strategy. To underline how the Sustainability Code directly ties in with various approaches, the Code also specifies the possibility of making declarations of conformity more reliable by having them reviewed by third parties.
Just how important it has since become for companies to provide information on their sustainable management strategy can also be seen here: the Foreword for the revised edition of the Sustainability Code has been contributed by Chancellor Angela Merkel no less. In the month to come, both the Sustainability Code and a manual for using the code in medium-sized companies will be made available as brochures which can then be ordered free of charge from the German Council for Sustainable Development.
Global Reporting Initiative (GRI)
Greek QualityNet Foundation