GRI Releases New Version of Sustainability Reporting Guidelines
Bloomberg BNA -- The Global Reporting Initiative, the organization that develops the most widely used sustainability reporting framework in the world, released an updated version of the guidelines May 22.
The guidelines, called the G4 guidelines, provide guidance for organizations to voluntarily report on their environmental, social, and governance performance.
The newest version encourages organizations to report only on information that is material to their business. Under the guidelines, organizations are directed to state why a certain disclosure, such as greenhouse gas emissions, is material to the organization. The previous version identified which issues were relevant and material to most organizations.
“This means organizations and report users can concentrate on the sustainability impacts that matter, resulting in reports that are more strategic, more focused, more credible, and easier for stakeholders to navigate,” the Global Reporting Initiative said in a statement.
GRI defines material topics in the guidelines as those that reflect the organization's significant economic, environmental, and social impacts or that substantively influence the decisions of interested parties. The guidelines also encourage organizations to disclose the process by which they determined which issues are material.
Christian Mouillon, global vice chair of assurance at Ernst & Young, said in a statement that G4's focus on material issues will “increase the transparency and value of sustainability reporting for stakeholders and provide a more accessible framework for organizations.”
Guidance Contains New Disclosures
The G4 guidelines also include new or updated disclosures on governance, supply chain, greenhouse gas emissions, and other issues.
New disclosure items include:
- the energy intensity of the organization or unit of energy used per unit of product or service provided;
- greenhouse gas emissions intensity, including the extent of emissions considered and type of gas included;
- percentage of new suppliers screened using environmental criteria;
- significant actual and potential negative environmental impacts in the supply chain; and
- whether the organization's board has oversight of sustainability-related issues.
G4 also does away with the application levels—A, B, and C—with which, under the previous guidelines, organizations self-declared the degree to which they applied the guidelines. Critics said the application levels mislead readers to believe they indicate the quality of a sustainability report.
"This means organizations and report users can concentrate on the sustainability impacts that matter..."
The application levels have been replaced with a two-tiered system for expressing the degree to which an organization complies with the guidelines.
Organizations again will self-declare whether they prepared a “core” or “comprehensive” report. Core reports must include the standard disclosures for all material issues and at least one relevant indicator per material issue. Comprehensive reports must include all standard disclosures and all indicators for each material issue.
The G4 guidelines will be compatible with a framework for integrated reporting, or combining sustainability and financial data, which is being developed by the International Integrated Reporting Council. The framework is scheduled to be released in December. Information generated using the GRI guidelines can be used in an integrated report, GRI said.
Kate Turner, a spokeswoman for IIRC, told BNA May 22 the integrated reporting framework will encourage organizations to make use of existing guidelines, such as G4.
“Both organizations share a common view of the evolution of corporate reporting—one in which integrated reporting and sustainability reporting play a vital and complementary role,” Turner said in an email.
Charts Reflect Relation to Other Guidelines
G4 contains charts showing how the GRI guidelines coincide with other guidelines, including the Organization for Economic Cooperation and Development Guidelines for Multinational Enterprises, the United Nations Global Compact Principles, and the U.N. Guiding Principles on Business and Human Rights.
The G4 guidelines were developed over a two-year period involving two public consultation periods and involved 120 contributors, according to GRI. The last version of the guidelines was released in 2006 and updated in 2011.
Marjella Alma, a spokeswoman for GRI, said May 16 that organizations will likely be able to use the third version of GRI guidelines until May 22, 2015, though the official announcement on timing will be made soon.