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GLS Sustainability Report 2021

Where the difference to conventional sustainability reports lies

Status quo: Environment, social issues and corporate governance (ESG)

Sustainability reports can be an effective, controlling, inspiring and honest instrument for steering and accountability in regard to socio-ecological aspects. However, in practice they often are not. Companies that issue sustainability reports use ESG performance numbers and in the best case present the improvement of these numbers in time – the so-called ESG-progress. These are supported by qualitative descriptions of measures, management systems and such. These include how people are handled, environmental topics, diversity, and a good corporate governance.

But what does this form of sustainability communication express? Is a reduction of CO2-emissions enough to do business compatible with the 1.5° limit? Are guidelines and internal examination procedures enough to really prevent human rights violations? Not at all.

Sustainability reporting in context

The boundaries of our planet are non-negotiable, they are the natural laws and foundation of life for all. Only if we actively use them as an indicator, sustainability reports can tell an honest story and help us stabilize the system earth.

To present a company’s contribution towards a sustainable development we must clearly define the planetary boundaries like 1.5°C compatibility and social target conditions like human rights. These help companies measure whether they do business within those boundaries or not. In technical jargon this is called contextualization.

Donut Economy

Return is not enough: Success must be newly defined

In conventional calculations of success, entrepreneurs consider real values that reflect in their balance.

In integrated reports, the multi-capital approach is mentioned more and more often. In this approach, the logics of capitalism are transformed to consider and estimate the value of further resources, so values apart from the known financial capital. Because not only the amount of financial capital defines a company’s success.

Therefore, additional values for success, like satisfied clients, are being neglected. The GLS Bank is taking a different road.

In our chapter “Scalability“, we show our categories of values that we need for our work and that our success depends on. We have made the conscious decision against the terms “natural capital“ and “human capital“. For us, living beings and nature as well as humans carry their value inside themselves already. That value is independent from the use for human or economic purposes. We therefore just speak of “values“.

Our values are: Nature, humans, knowledge, relationships, attitude and opinions, and money

We have identified the following values as relevant for us: nature, humans, knowledge, relationships, attitude and opinions, and money. The value attitude and opinions plays a superordinated role. It determines what we work towards and expresses the foundation for our banking business.

We use the available money and knowledge by having the most positive impact possible on the values nature, humans, and relationships.

To make sure our impact is a positive one, we must define target conditions for each value category. For each value, there are global scopes for action that we cannot exceed. An example for the value category nature in the function of climate regulation is the 1.5°C goal. Otherwise, the value will suffer. Therefore, we consider an ecological budget that cannot be exceeded and socio-economic ideal states, that we must maintain. This is discussed in international (and scientific) debates as “Carrying Capacities“.

Integrated reporting

Why financial figures and sustainability belong together

Integrated reporting is a form of corporate reporting. The goal is to combine different reporting formats like sustainability reports and financial reports to draw relationships between their content. Because economic performance must be regarded together with the socio-ecological performance of a company. This report takes us a step in that direction.

That is why you can find elements of our non-financial statement, our annual accounts, and an indexation according to GRI indicators and the Economy for the Common Good.

To ensure the best possible comparability of our report, we have based it on the recommendations of the ‘Reporting Blueprint‘ from r3.0. According to r3.0, reports should be written with the interest of the reader in mind to convey an all-round complete understanding of sustainability and address the key areas “Purpose“, “Success“ and “Scalability“.

Keeping these principles in mind, a company can add value to the sustainable development of society through their action. By becoming clear on their vision and understanding of impact and success, companies foster trust in themselves and their innovative capability and resilience.

Inside-Out and Outside-In

We have based the structure of our reported values on stock-and-flow models. Accordingly, we break down our values into their main components - in other words their stocks. In order to present our influences on the values in a next step, we have first subdivided the stocks (where necessary) into more detailed elements.

On the one hand, these elements are influenced by us as GLS Bank. On the other hand, external factors also influence the elements and require a reaction on our part. With this distinction, where the system boundaries also become blurred, we try to integrate the idea of double materiality into the report and take both an inside-out (the bank‘s effect on the outside) and an outside-in perspective (the effect from the outside on us as a bank). Influences appreciate or depreciate the state of the elements and therefore the values.

Our core business’ success is measured with our unique GLS Impact Transparency: The Visions of Change of our GLS sectors (Renewable Energies, Sustainable Business, Food, Housing, Social & Health and Education & Culture) make a targeted measurability and steering of the impact of our credit customers possible. Learn more about our Impact Transparency here.

You choose how deeply you would like to immerse into this report’s world. You can choose an overview on surface level, or you dare to enter the depths of our GLS understanding of sustainability. No matter what you decide: We hope you will enjoy it.