The Mission of Sustainability Reports: The GRI and Vale's case
BBC
Julio F. Campos
What is questioned here is the validity, effectiveness or even the connection with the reality of corporate sustainability reports, in the case of GRI, of which Vale holds the Gold Seal.
But a brief historical review of events is required.
Back in 2013 Samarco, a joint venture between Vale and BHP was aware of a report warning of problems in Bento Rodrigues, which indicated the risk of its dam.
In 2015 the risk became a reality with the rupture of the dam resulting in the death of 15 people, the destruction of the Rio Doce and the contamination of the coastal region. So far the survivors of the tragedy still suffer from the company's unwillingness to assume its indemnity responsibility. The previous report of 2013 pointing out the risk of the dam was rebutted by BHP.
The direct consequence of the "accident" was the re-evaluation of the existing dams and in 2016, in its own GRI, Vale reports that (page 38):
"In June, the Environment Secretariat of the State of Minas Gerais ordered the suspension of part of the activities of the Jangada and Feijão mines due to alleged impacts on cavities located in the area. Against the measure, Vale obtained a preliminary [injuction] decision authorizing mine activities. "
As we know in 2019 the dam I of the Feijão mine collapsed, resulting in the second tragedy caused by the company.
I am not going to question the relation of the impacts pointed out by the Secretariat of the Environment with the rupture, since I do not have competence for such analysis, but what I question is the system of sustainability reporting itself.
According to GRI, its mission is "To empower decisions that create social, environmental and economic benefits for everyone".
I questioned GRI at its LinkedIn discussion group (the option for this was to discuss the subject publicly) the qualification of Vale as a gold member, the seriousness of its sustainability report, as well as the role played by the auditors who evaluated the report and their fail to perceive an announced tragedy.
I received as a response from its Chief External Affairs Officer:
"First off all, we are deeply concerned and upset about the events unfolding in Brazil and extend our condolences to those effected (sic) by this tragedy. In response to your question we can confirm that Vale S.A is a member of the GRI Community, and its sustainability reports are written in line with the GRI Sustainability Reporting Standards. However, it is important to note that membership is neither a seal of approval by GRI nor does it imply that the report of the member company has been assured by GRI. GRI reserves the right to review or end the membership of any company that is found to engage in activities that are contrary to GRI’s mission and values. We will await the full evaluation of the event by the appropriate agencies of the Brazilian government and further determine the status of membership for Vale SA. "
Well, let's analyse the answer.
"... its sustainability reports are written in line with the GRI Sustainability Reporting Standards. However, it is important to note that membership is neither a seal of approval by GRI nor does it imply that the report of the member company has been assured by GRI. "
What can be verified from this statement is that GRI only evaluates if the report is within its standards, making no judgment of value on the actual effectiveness of the corporation's sustainability policy, remaining neutral on this.
However, following the answer we have:
"GRI reserves the right to review or end the membership of any company that is found to engage in activities that are contrary to GRI’s mission and values."
Recalling that GRI's mission is to create benefits for everyone, and considering that in the 2016 report, Vale's reported its injunction to reverse the order of the Secretariat of the Environment, making clear the interest in its own economic benefit in detriment of social, environmental and the whole of society, it is questioned whether what "everyone" in the mission of the GRI means? Is the society effectively included or only the company investors?
Finally:
"We will await the full evaluation of the event by the appropriate agencies of the Brazilian government and further determine the status of membership for Vale SA."
In this way, GRI washed his hands by leaving his decision about the association of the company linked to the decision of the government. Those killed by the "accident" apparently are not enough argument for GRI to independently, based on its mission statement, decide about the association of Vale.
Considering the company's recurrence in this very type of catastrophe, and its presence so far as an associate of GRI, there is nothing new here.
Being presented in 2016, in its report, in such a striking way (something that is usually in between the lines of the sustainability reports) the position of its economic interests over the others, why its association to the GRI was not reviewed at the time, since it is (?) flagrantly in opposition to the GRI mission?
While the company met GRI reporting standards, didn't it acted in a way that was contrary to the GRI mission?What, then, is the purpose of the sustainability reports themselves if their approval is based solely on what is reported and not on the corporation actual results, not just in the economic sphere?
Vale is unfortunately not the only one to present such nonconformities between what's reported and what's realized, also this problem likewise occurs in other reporting systems, but while at those the problems must be found between the lines and are not exposed so clearly as in Vale's 2016 report, it raises the question about the effectiveness of the report for the company to carry out the mission proposed by GRI.
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