GRI G3 – serving the next generation?

October 24, 2006

The third-generation Global Reporting Initiative guidelines help businesses both understand and report on their impacts on society. But, argues Chris Perceval of Earthwatch, there’s still a lot of work to be done.

The third generation of the Global Reporting Initiative guidelines – so called GRI G3 – was launched on October 5 and is an important landmark on the journey towards sustainability.

With its multifaceted reporting framework, sector guidance, indicator protocols and associated courses, it boldly grapples with the complexity of how business impacts society and the environment. The framework makes strides towards helping organisations report in a way that is meaningful and relevant to a range of stakeholders. It increases transparency, accountability and responsiveness of business to civil society. It clarifies some of the social and environmental issues that are important to the long-term financial health of companies, in the eyes of ethical investors.

However, there is still much work to be done and Earthwatch have identified four key areas for further consideration:

  • The framework needs to prompt responses to the scientific evidence of the scale of ecosystem challenges. The indicators do not, for example, reflect the findings of the 2005 UN Millennium Ecosystem Assessment – the largest study ever into the current state of the world’s ecosystems.
  • Emphasis needs to shift towards identifying tomorrow’s opportunities as well as controlling today’s risks. Most indicators are geared towards minimising impacts and increasing efficiency of corporate activities, and not yet on responding to the scale of sustainability challenges and finding new solutions.
  • It is not clear that the right issues are always being monitored within the framework. For example, biofuels are endorsed as a renewable energy source by the guidelines without consideration of the associated potential biodiversity impacts.
  • While the GRI has committed to offer training for new and experienced reporters, it is not clear whether those courses will incorporate the context and science necessary to form the backdrop to the processes that they will learn about.

As an environmental stakeholder that provides written feedback and seeks dialogue with individual members of the Corporate Environmental Responsibility Group on the content of CSR reports, Earthwatch is interested in the practice behind reports.

We believe that many companies are still geared towards appearing to outstrip competitors with PR-driven anecdotal examples of good practice, and distributing hefty reports that are only read by professional stakeholders. For that reason, we apply certain ‘litmus tests’ of the true sustainability ethic of a company’s behaviour by inquiring about its approach to certain key issues: asking, for example, whether a company has a position statement and policy on climate change, has conducted an audit of its impact on ecosystem services, and monitors the level of efficient resource use of its suppliers?

The shared challenge is therefore to find a way for reports and reporting processes to communicate concisely the true level of commitment that business has in bringing about a sustainable future. Through business-NGO partnerships, and further modifications to the global reporting framework, we have a vision for true sustainability behaviour by business that is motivated by disruptive innovation (innovation that create a step-change towards the possibility of sustainability actually being achievable – such as GE’s ecomagination initiative), competitive imagination and deep listening to fringe stakeholders. To achieve the vision, we will need to identify further key ‘litmus tests’ within and across sectors, that address the underlying behaviour and motives of companies, as well as what they should report upon.

Al Gore, speaking at the launch of the GRI G3 Guidelines, suggested that future generations are crying out to business leaders of today: “Act Now!”

Earthwatch Institute is an international environmental organisation whose mission is to engage people worldwide in scientific field research and education to promote the understanding and action necessary for a sustainable environment. Earthwatch currently support over 130 field research projects worldwide.

Earthwatch’s Corporate Environmental Responsibility Group (CERG) is a platform for enhancing good practice amongst the business sector. CERG members benefit from: networking and shared learning with other companies committed to good environmental practice; stakeholder dialogue through report/policy feedback services and disseminating good practice through presentations at Earthwatch seminars.

Chris Perceval is Corporate Development Manager at the Earthwatch Institute. He promotes sustainability in extractive industries and other partnerships advancing biodiversity, climate change and supply chain issues. Previously, Chris worked with corporate citizenship issues for the United National Global Compact, The International Business Leaders Forum and Business in the Community. For two years before joining Earthwatch, he also worked as a risk analyst for ENI, a multinational oil company.