Comment: reporting: setting standards for social reporting

As more companies seek to measure and report their impacts on society, both GRI and BITC have issued new lists of indicators. But are these helpful guidelines or unworkable standards?

Who described the draft GRI guidelines as “overly prescriptive”, “mostly too complex and ill defined” and failing “to address the real issues of performance in a meaningful way”, concluding that “as currently configured, the Guidelines are unworkable and fail in their objective”? Answer: not a stick-inthe- mud reporting refusenik, but Shell, probably the largest and most advanced social reporter. True, that was about the consultation draft, but the final guidelines are not materially different in scale or scope. Other companies concurred, though less trenchantly.

These, the third round of sustainability reporting guidelines, mark a significant transition towards creating a standard with which companies must comply in order to ensure global consistency and comparability, and away from helpful encouragement to embark on the reporting journey. Therein lies the danger. For so long as social reporting remains voluntary, most companies will only publish what they need to communicate effectively with stakeholders that really matter. One-size-fits-all GRI indicators alone can’t achieve this, so companies may either have to issue telephone directory-sized reports or – more likely – pick and choose (thereby defeating GRI’s whole raison-d’être). If GRI is to maintain credibility, it will rapidly have to slim down the core to a manageable minimum that is genuinely applicable at global level, while greatly expanding the optional indicators to encourage innovation and experimentation. Closer to home, BITC runs similar risks with its very detailed 82- questions.

Expect more companies to insist that social reporting is at heart about providing an effective account of performance against principles, policies and commitments and thereby engaging better with stakeholders – and not about complying with externally imposed standards, however laudable in intent.