Charlie Ashford introduces the Global Reporting Initiative’s newly-updated Standards for sustainability reporting.
On 19 October, the Global Reporting Initiative (GRI) launched the latest evolution of its guidelines – the world’s most widely used set of sustainability reporting disclosures.
The new GRI Standards, which the organisation describes as the “first global standards for sustainability reporting”, introduce a new structure, clearer terminology and new opportunities for flexible reporting. Companies currently reporting in line with the previous ‘G4’ Guidelines will need to make the switch by 2018, so it’s worth getting up to speed with them now.
Although the Standards are similar in many ways to GRI G4, there are some key differences too. So what exactly do you need to know?
Don’t panic – yet!
You’d be forgiven thinking that it hasn’t been long since the transition to GRI G4. In fact, the last update was all the way back in May 2013 – although companies had until the end of 2015 to make the switch.
This time, there’s a similar grace period. You can continue using G4 for reports published up until 30 June 2018. That should give you plenty of time to get familiar with the new Standards.
This is G4+, not G5
Another reason not to panic – no new topics have been added, and most key concepts remain the same. The focus is on creating a “more flexible”, “more credible” and “more future-proof” structure, without rocking the boat too much.
The G4 Guidelines introduced major new concepts, like the two “in accordance” levels (Core and Comprehensive), and a new emphasis on reporting only material topics.
In the GRI Standards, none of this has changed. In fact, if you’ve previously completed or are planning to take a GRI G4 training course, GRI estimates that 80% of the content is still directly applicable to the new Standards.
GRI is going modular
The most significant change in the new Standards is the structure, not the content. The two key GRI G4 documents – the G4 Reporting Principles and Standard Disclosures and the G4 Implementation Manual – have been restructured into a set of interrelated “Standards” documents: 3 universal Standards, and 33 topic-specific Standards, organised into Economic, Environmental and Social buckets.
The basic process remains unchanged. Companies still report on general disclosures, define their material topics, and report on topic-specific disclosures and management approach (either one disclosure per material topic for Core, or all material disclosures for Comprehensive).
So why swap two long documents for 36 shorter ones? There are two key reasons. Firstly, it means each of the topic-specific Standards can be updated individually – and new topics can be introduced – without requiring an overhaul of the whole set. Secondly, companies who want to produce standalone reports on specific material topics – like Coca-Cola’s Water Stewardship report, or Unilever’s Human Rights report – can now report that these are “GRI-referenced”.
Goodbye to Aspects and Indicators
More good news: less jargon! There is no longer a distinction between GRI “Aspects” and “topics” – “topic” is now the catch-all term. Similarly, “disclosure” now refers to any qualitative or quantitative disclosure in the report, removing the distinction with “indicators”.
Other terms have also been clarified, such as the distinction between “employees” and “workers”. It all adds up to a more intuitive, less technical set of Standards.
Shall, should, can
In the Standards, the wording around each disclosure has been rewritten, to distinguish between “requirements”, “recommendations” and “guidance”. This is a welcome change from G4, where it was sometimes difficult to tell which parts of the guidance were mandatory, and which weren’t.
The three categories, clearly denoted by the words “shall”, “should” and “can”, make it easy to tell at a glance what you need to do to produce a report in accordance with GRI.
Anything else?
One key change concerns the GRI Index, which directs readers to the individual disclosures in your report. The index is now supposed to include all of the topics which you consider to be material, regardless of whether a topic-specific Standard has been defined by GRI. This means that if you’re reporting on a material topic for which no GRI guidance exists, you should still include it in your index.
Oh, and one more thing – GRI’s sector disclosures, which are published for ten specific sectors (including construction, mining, financial services and oil & gas) are no longer mandatory under the GRI Standards. This strengthens GRI’s focus on materiality, freeing companies to report only against the disclosures that they consider material to their impacts and stakeholders.
So what happens now?
It’s up to you! Some companies will no doubt be racing to publish one of the first GRI Standards reports. But we expect that most will begin work on the transition during the 2016/17 reporting cycle, investing in training and knowledge-building, before switching fully to the Standards in 2017/18.
GRI offers a useful spreadsheet tool to help you map your existing G4 disclosures against the Standards. But bear in mind that you can’t make the switch by halves – it’s G4 or the Standards, not a mix of the two.
Where will GRI go from here? Part of the aim of the Standards is enable incremental improvement, removing the need for G4-style updates every few years. But it would be wrong to expect this to be the last major overhaul. GRI is keen to harness new digital opportunities, with the announcement this year of a Digital Reporting Alliance, promoting the use of clever markup language to “liberate” data from company reports. As online reporting gets increasingly sophisticated, expect the GRI to continue evolving.
Corporate Citizenship has two upcoming GRI-certified training sessions in London, 5-7 December 2016 and 11-13 January 2017. Each will consist of a two-day intensive workshop (GRI G4 Training) followed by a standalone half-day Transition to Standards module. Find out more and sign up here.
Corporate Citizenship in Singapore has trained over 100 individuals on GRI over the last 2 years. For questions on GRI Standards in Singapore, contact Junice Yeo at junice.yeo@corporate-citizenship.com.
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