What's behind the Global Reporting Initiative G3 Guidelines?
by Katherine Sharp, BITC
On October 4th, the Global Reporting Initiative (GRI) launched the latest version of its reporting guidelines, the so called G3 Guidelines. Set up in 1997 to develop and disseminate globally applicable Sustainability Reporting Guidelines, the GRI has set a high bar for transparency. 91 UK companies have produced a GRI Report – 77 of them members of Business in the Community.
Many current users are the sorts of companies you would expect to see: companies with a large global social, environmental and economic footprint. These companies live in the spotlight, a frequent target for pressure group campaigns against either aspects of their business conduct or the very nature of their business.
One committed GRI reporter explains the value to them of using the guidelines: "Because the guidelines are driven by a multi-stakeholder forum that is open to all we are confident that not only does GRI allow us to address the majority of issues that our stakeholders would expect us to but more importantly, their use internally ensures that we continue to have a holistic approach to business management".
But omissions from this group of users are also notable. Marks & Spencer, rewarded for its responsible business practice through the Business in the Community Company of the Year award in 2006, chooses a different approach. Rowland Hill says: "As a 100% own brand retailer, the Marks & Spencer strategy on CR has been to prioritise and adopt positions of leadership on key product issues. This approach is intended to ensure a genuine strategic fit with the businesses overall aims and has been developed through extensive consultation with stakeholders. However, giving emphasis to these opportunities can sit awkwardly against the more risk based approach of GRI which assumes a large number of common and comparable issues. This year for the first time we supplied detailed references against GRI in our CSR Report and in the future we plan to bring the Marks & Spencer and GRI approaches closer together by adopting the new C level of context and measurements"
The principle through which GRI hopes to reconcile the approaches here is that of materiality. The content of the GRI guidelines reflects an agreement on the issues and accountabilities which members of a wide multi stakeholder process view as critical to making economic development sustainable – explicitly bringing issues such as labour rights, environmental protection and consumer health and safety on to the radar of corporate accountability. Of course it is up to business whether it chooses to accept this proposition, so long as GRI guidance is voluntary. The GRI deems its 79 core indicators to be material unless shown otherwise.
The Amsterdam based secretariat developed their goals for improvement in 2004 through the thorough and systematic feedback process which is a hallmark of the organisation.
What’s new in G3?
- New guidance on defining the content of a report and the process of reporting
- New guidance on setting the report boundary
- Each reporting principle is accompanied by a set of tests to help with their application
- New section on strategy and analysis that highlights key issues, risk and opportunities
- Indicator section has been restructured and new focus on disclosing management approach
- Indicator protocols introduced
The Guidelines are divided into three organising sections: Economic, Social and Environmental. Each one includes standard disclosures on the company’s management approach. So to introduce its economic performance, the reporting organisation will in future need to include information on organisation-wide goals, policies defining overall commitment, additional relevant information such as key successes and shortcomings, major organisational risks and opportunities and key strategies for implementing policies or achieving performance.
This will be familiar territory for companies reporting through Business in the Community’s CR Index and is a development likely to sit well with companies.
One of the innovations introduced with the G3 guidelines is the option for companies to self-declare the level to which they have used the guidelines based on their own assessment against some criteria provided by GRI. In other words companies can for the first time use take the approach that suits their level of sophistication, from entry level to expert and communicate this. For each of the three levels A to C the company can add a + if they have also included external assurance .
The changes mean that the new Guidelines will be a more palatable proposition than their predecessor. The practical reality is that corporate responsibility involves a permanent cycle of change. Reporting guidelines are important and GRI can certainly claim legitimacy for how it has arrived at its guidelines. But these latest guidelines are just that - guidelines for reporting and companies would do well to learn from them, use what is useful and move at the pace that means change is real.
