GRI G4 – Quick Look on what’s hot and what’s not!

By Karthik Subburaman, Country Manager, ECCI Group

GR4 logoGRI guidelines has been the globally accepted gold standard in non-financial reporting over the last decade . But with several questions around the credibility of the basis for rating companies as superior vs otherwise using applicability levels and different types of assurance, improvement of the guidelines for sake of clarity and better hold of the sustainability context was imperative.

GRI G4 – the next generation guidelines was released last thursday (May 23) officially at the Global Reporting Initiative Conference held in Amsterdam between May 22-24 2013. A bi-annual affair, this year’s event attracted close to 1600 practitioners from over 60 countries – with exactly equal number of men and women registrations. The script for inclusiveness and equality could not have been written better…

The G4 guidelines was touted to be an enhancement of the G3.1 guidelines in many areas while several of the components have been retained. Largely, some key objectives the guidelines that this change aims to achieve include:

  • Simpler and clearer guidelines that leave not too much to interpretation (by convenience)
  • Grounded on principles that help companies focus on ‘material issues’ rather than go merely by number of indicators
  • Make it simple for new reporters to take on the responsibility of non-financial reporting and take transparency to the next level

How far these objectives will be achieved will be answered in time as companies start adopting G4 guidelines but as in any new focus area there is clamor from the other side for intentional omission of focus / clarity on ‘sustainability context’ making the guidelines still a difficult set of best practices from the perspective of true sustainability!

Leaving opinions for a different post, here is a list of

Whats HOT – New additions / changes to the guidelines
Whats NOT - Omissions from G3.1

Whats HOT!

  • New ‘in accordance‘ criteria – It consists of two options: “Core” and “Comprehensive.” Core reports will include majority of the standard disclosures and a minimum of one relevant indicator per material aspect. Comprehensive will include all the standard disclosures and all of the relevant indicators for each material aspect. The biggest change from G3.1!
  • Its ALL about ‘Materiality‘ – While materiality is not new, the G4 framework more explicitly requires reporting efforts to center on materiality — impacts, risks and opportunities. What used to be a bunch of protocols to determine report content, now forms the crux of G4 reporting!
  • Open up your ‘boundary‘ – There is an exemplified need to consider supply chain and downstream processes through customer use as part of reporting still in line with materiality!
  • DMAs a double! – There are two separate DMAs (Disclosures on Management Approach) – general standard disclosures and specific standard disclosures. The latter along with the indicators are clubbed under the 3 major categories (Social, Economic and Environmental)
  • Indicators & disclosures plus some more! – There are some new indicators added with very few deletions. Special focus on governance related standard disclosures leading to 10 new additions!
  • Increased focus on Ethics & Integrity - Special mention as a standard disclosure area which was not originally separate. Calls for specific attention to aspects such as remuneration, transparency etc. making it relevant in today’s scenario

Whats NOT!

  • No A,B,C application levels – Application levels have been removed to give way to ‘in accordance’ criteria and increased focus on materiality!
  • No assurance based on application levels – With the removal of application levels, external assurance leading to ‘+’ ratings of sustainability reports is also not part of the G4 guidelines. However, assurance as a potential value-added intervention for credibility still exists!
  • Value chain assessments are gone – Value chain reporting of the organization has been removed and there is a specific intent to include supply chain as mentioned before

Personal Highlights

  • Potentially shorter reports - With a clear trend towards considering materiality aspects before reporting, overall length of reports might become shorter (especially as companies figure to perform appropriate assessments and prioritization)
  • Probably lesser uptake for assurance – to begin with! - With lesser clarity around the types as well as intensity of assurers on the aspects of materiality, going for external assurance could remain a wait and watch game for many!
  • Guidelines and implementation manual – The what & how… connected! With the intent to keep the guidelines close to inputs on its usage, there is a sense of ease and connection which might make it reporter-friendly.

To learn more about the GRI G4 guidelines and the updates from G3.1, please attend our upcoming Friday Forum on 7 June 2013 organized by Apex Global.

About Apex Global & ECCI

ECCI is the leading process improvement solutions provider in Southeast Asia, focused on process consulting, automation solutions and learning outsourcing services. We help companies achieve performance excellence by assisting them implement management systems and international standards/best practices across multiple domains and industries. ECCI has helped several top companies in the region implement GRI guidelines and prepare externally assured sustainability reports!

APEX Global (The Academy for Professional Excellence) is the learning solutions arm of ECCI – the leading process improvement solutions provider in Southeast Asia. Our sole aim is to promote performance excellence among professionals. We help our customers achieve greater success through effective, experiential and results-oriented training delivery.

Another milestone in Sustainability Reporting for ECCI

ECCI helped Ayala Corporation in developing their 2011 Sustainability Report for at the conglomerate Level. The report focuses on the Environmental, Economic and Social performance of the group for the past year based on the GRI G3.1 Guidelines. The report was released during the recently held  Sustainability Summit at the Ayala Museum on Friday, October 5, 2012. The report was officially launched by its Chairman, Jaime Augusto Zobel de Ayala. The event was organized by Ayala Corporation to strengthen the sustainability initiatives in the group. Lory Tan, WWF President, Philippines and Adam Brennan, Global Sustainability Manager for Puma where speakers in the event who shared their views on the Climate Adaption Project in the Philippines by WWF and implementing sustainability measure in their organizations respectively. At the end of the Sustainability Summit JAZA’s message was “We all have a big job to do”. This statement by the chairman clears out the vision and direction given by the Chairman to its subsidiaries.

Another milestone in Sustainability Reporting for ECCIIn their third conglomerate sustainability report, it reinforces the group’s commitment in creating shared value to the broader communities in which they operate. It highlights Ayala’s pledge to improve their sustainability impact through their operations, products and services, supply chains, human resources practices, community involvement and management approach.

After helping Globe Telecom’s 2011 Sustainability Report and helping them achieve a B+ level of external assurance, ECCI assisted Ayala Corp to attain GRI Application Level B Check for the report to strengthen the credibility of the report.

Being one of the leading training and consulting companies in Southeast Asia, ECCI has been taking active participation in helping companies developing their Sustainability initiatives and disclosing them through reporting. Some of the key areas where ECCI helps clients are in Energy Management, Carbon Footprint, Sustainability Reporting and CSR.

For more information on ECCI’s Corporate Sustainability & Governance services portfolio, please email info@eccigroup.com

ECCI helps Globe Telecom in achieving External Assurance for its 2011 Sustainability Report

Globe telecom released its 2011 Sustainability Report on April 17, 2012 during its Annual Stockholders Meeting. With “Transformation” as the central theme of the report, it reflects the cultural and network transformation within the company – focused on providing excellent customer experience.

The report is based on GRI G3.1 Guidelines covering the Environment, Economic & Social aspects of its performance.

ECCInternational is the leading process consulting and training company in SE Asia when it comes to Corporate Sustainability & Governance (CSG). ECCI helped Globe Telecom in creating their 2011 Sustainability Report and achieving a B+ level of external assurance. This makes Globe Telecom the first telco company and one in few in Philippines to achieve external assurance for its Sustainability Report.

Globe Telecom has also achieved the distinction of being the first company in the country to have the external assurance done by an AA (Accountability) accredited third party assurance provider. The external assurance of the report was conducted by TUV Rheinland, one of the very few.

Globe Telecom has achieved external assurance for its 2011 report to further strengthen its credibility in the market, emphasize management’s commitment towards sustainability, and increase the level of confidence among its stakeholders.

With the increasing popularity of promoting sustainability, more and more organizations are leaning towards developing Sustainability Reports which give a holistic information on the financial, environmental, and social performance of a company. Meanwhile, external assurance helps protect the interest of stakeholders and provides a level of comfort to key decision makers, allowing them to know that the information they are using for their business decisions are reliable and comply in all material aspects with the relevant reporting frameworks. By taking the lead in this practice area, ECCI has helped companies in Philippines, Vietnam, China and India create their sustainability reports.

View Report or Learn More about ECCI’s CSG services

Technology interventions for Sustainability Reporting

Making an organization’s performance sustainable and tracking their resource consumptions, GHG emission and reporting this to the top management and stakeholders is becoming an ever increasing challenge.

The size and growth of a business has become directly proportional to the extent to which an organization manages its sustainability. Leading companies realize sustainability is not just about “going green” for the sake of going green. To be feasible, sustainability practices and processes must work in concert with core business goals and strategies and improve enterprise profitability.

Though manual methods of collecting and interpreting data exists, evolution of sustainability software solutions has helped the optimal alignment of an organization’s financial and operational performance, and enable organizations to get insight into the opportunities where sustainability is profitable. Some of the advantages that organizations can benefit from are:

  • Reduce cost of measuring sustainability performance
  • Turn strategy and data into actionable insights where sustainability performance improvements also improve profitability
  • Provide sustainability results to the right levels in the organization so information is actionable

GRI (Global Reporting Initiative)  has  certified a number of sustainability software’s and  verified the solutions on criteria’s like completeness of GRI content, appropriate division of the elements or clear distinction between GRI and other reporting frameworks, among others. Some of the GRI certified software’s include:

  • SAP (Sustainability Performance Management) helps in managing multiple sustainability frameworks, Data collection, helps converting sustainability data into actionable information, Aligns sustainability KPIs to corporate objectives and risks
  • SOFI Solution 4 helps companies to integrate sustainability into their core business.
  • Enablon (Sustainability Management Platform)  enables companies to meet their needs in terms of nonfinancial reporting, operational performance and regulatory compliance

While most new areas in industrial development has such globally acclaimed solutions that there are many challenges that companies face  in choosing a solution in the developing economies (ex: Asia and Africa):

  • Accessibility to solution provider
  • Success stories from near shore countries
  • Hesitation to become early adopters
  • Ability to synchronize and synergize solutions already in place in the organization

SUPM (Sustainability Performance Management) of SAP builds on proven management processes and tools developed over decades of managing compliance and improving corporate performance and helps align a company’s operational and financial performance ultimately identifying how to convert sustainability into profitability.

ECC International being one of the leading training and consulting firms in the field of Corporate Sustainability and Governance in South East Asia recently partnered with SAP’s Extended Business Member program to help organizations generate more consistent and accurate sustainability reports and ultimately achieve sustainable performance.

APEX Global successfully holds 3 public trainings on week of May 30 – June 3

Last week, APEX Global successfully conducted 3 trainings at the New World Hotel, Makati City. Forty-five professionals and executives from various firms attended the Business Continuity Management Practitioner, Sustainability Reporting Practitioner and Combined Lead Auditor trainings.

On May 30-31, the Business Continuity Management Practitioner training was held to help professionals learn the best practices of BCM implementation using the BS 25999 standard. Business Continuity is a key factor for an organization to maintain its critical operations during and following a disruption and the speed at which it is able to re-establish its full functionality. RCBC, Smart Communications, Allied Bank and Jollibee Foods Corporation are some of the companies who sent representatives to learn from this course.

Simultaneously, the Sustainability Reporting Practitioner workshop was conducted focusing on the principles and best practices of structuring, designing and developing a successful corporate sustainability report. Tips from GRI (Global Reporting Initiative) G3 Guidelines, AA1000 (AccountAbility and ISO 26000 (Guidelines for Corporate Social Responsibility) were shared to participants from Ayala Corporation, Development Bank of the Philippines, Bangko Sentral ng Pilipinas and Globe Telecom.

The Combined Lead Auditor Training was also conducted from May 30 to June 3. The training course is the first of its kind in the Philippines combining ISO 27001 (Information Security Management System) and ISO 9000 (Quality Management System).  Whereas conventional training programs would require 10 days for the two standards, the duration of APEX Global’s delivered the program in only 5 days. Participants come from companies such as UnionBank, BlastAsia, Toshiba Information Equipment, SPI CRM, Zuellig Pharma, HP and Fujitsu.

ECCI becomes Key GRI Organizational Stakeholder

ECC International (ECCI) has officially become a key organizational stakeholder of GRI (Global Reporting Initiative). ECCI from now on will be recognized by GRI as an organization seeking to demonstrate a leadership position and commitment towards sustainability. As a leading process improvement consulting and training solutions provider in South East Asia, ECCI has long been deeply involved with and fully committed to helping companies achieve corporate sustainability and performance excellence.

ECCI has been working with leading SE Asian companies for over 10 years to promote good practices around corporate responsibility, social accountability, good governance and corporate citizenship through the implementation of ILO (International Labor Organization) regulations, GRI guidelines, CSR best practices and Environmental management standards, among others.

As an official organizational stakeholder of GRI, “we take another key step towards deepening our commitment to the practice of sustainability and promoting ESG best practices with our clients”, says Ms. Mayeen Magno, CEO, ECCI. Some of the key benefits of being a GRI stakeholder includes regular contact with GRI personnel, access to all the latest information and updates on sustainability reporting framework and the ability vote annually to elect Stakeholder Council members.

The Global Reporting Initiative (GRI) is a network-based organization that pioneered the world’s most widely used sustainability reporting framework. GRI is committed to the Framework’s continuous improvement and application worldwide. GRI’s core goals include the mainstreaming of disclosure on environmental, social and governance performance. To learn more about GRI, please visit http://www.globalreporting.org.

APEX Global launches Sustainability Series

Corporate Sustainability is imperative for business survival — let alone market leadership. Organizations are experiencingpressures to be more accountable, transparent, socially responsible and more eco-friendly. In addition to generating profits, there is also significant focus being directed at protecting people and the planet.

In its efforts to help organizations reach greater heights, APEX Global launched the “Sustainability Series”— trainings on competencies and implementation infocus areas that include Sustainability Reporting, Energy Efficiency, Corporate Social Responsibility and Climate Change.

The following workshops will be held at the New World Hotel, Makati City:

  • Sustainability Reporting Practitioner
  • Certified Sustainability Assurance Practitioner
  • Carbon Neutrality
  • Energy Efficiency Excellence (ISO 50000)

For more information, please contact +6324038668 or email training@eccigroup.com

ECCI shares about Integrated Reporting at the Business World Corporate Governance Forum

BusinessWorld hosted the Best Practices in Corporate Governance on May 6, 2011 at Discovery Suites, Ortigas Center, Pasig City. The Best Practices Forum Series is a venue where BusinessWorld subscribers may interact with key figures in the private sector who will impart best practices in their respective company and industry.

Several topics such as Responsibilities of the Board of Directors, Improving the Effectivity of the Audit Committee, Best Practices for Transparency and Accountability, and ‘What is a well-governed company?’ have been discussed by leaders from various organizations.

Karthik Subburaman, ECCI Country Manager shared about Integrated Reporting – The impending convergence in reporting and its influence in good corporate governance.

ECCI helps its clients at multiple levels with the sole objective of improving sustainability performance by driving social responsibility, operational efficiency in terms of energy & environmental management and more importantly paving effective communication & reporting mechanism.

PUTTING GOOD DEEDS ON PAPER

by Karthik Subburaman, ECCI Country Manager

Corporate Sustainability and the initiatives around such have come to mean many things to organizations today – ranging from ‘sign of excellence, leadership & transparency’ to mere ‘buzzword to put out there for compliance’. A 2008 EIU survey in Asia reveals that sustainability would be the most critical to company strategy in the next 3 years. Irrespective of companies’ stand on this scale, those implementing sustainable practices & initiatives have found the process of sustainability reporting (SR) a truly rewarding process.

Countries (in SE Asia) such as Malaysia, Indonesia, Vietnam and Thailand lead the race in terms of corporate sustainability over the last 5 years – the common manifestation being generation of a Sustainability Report! Often dubbed as the ‘Corporate Communication of Commitment to Sustainability’. And fittingly these companies and countries have shown tremendous growth in operational performance.

Sustainability reporting while is still in great demand, now there is integrated reporting. It has been primely set up to be the way companies report their annual financial and sustainability information. Integrated reporting, occasionally called connected reporting, aims to provide a consolidated report that conveys to stakeholders, how the company impacts on the environment and community in which it operates, and how the environment and community impact the company’s business.

It’s succinctly defined in a recent publication on ‘Integrated Reporting’ that… reporting on CSR should be a part of mainstream reporting, as a logical outcome of the integration into daily business. It seems time for a transformation in corporate reporting: from a focus on financial information to a concept where all types of relevant information for assessing and evaluating a company’s quality, performance, value and impact are reported in a comprehensive way.”

As of today, only 3% of the companies on the Global Fortune 250 list report on an integrated basis, according to KPMG. But things are sure to change.

Frameworks

The Global Reporting Initiative (GRI) is a network-based organization that pioneered the world’s most widely used sustainability reporting framework. GRI is committed to the Framework’s continuous improvement and application worldwide. GRI’s core goals include the mainstreaming of disclosure on environmental, social and governance performance.

The GRI is strongly looking at Integrated Reporting. It proposes that ESG reporting and financial reporting need to converge over the coming decade, and advocates for a standard for integrated reporting to be defined, tested and adopted by 2020. The GRI is a member of the International Integrated Reporting Committee (IIRC).

In August 2010, at the launch of the IIRC, the GRI said “As the global leader in the field of non-financial reporting guidance, the GRI co-leads the development of this (integrated reporting) framework. GRI’s Guidelines will shape the ESG content for the integrated reporting architecture developed by the IIRC. The next generation of GRI’s Guidelines, G4, will boost the robustness of the integrated reporting framework, better enabling the analysis and assurance of integrated reports. GRI also represents a large network and a wide range of stakeholders, bringing expertise and thought leadership to the IIRC, enhancing the development of an integrated reporting framework.”

There is a growing movement across the globe calling for this type of reporting, with one of the critical reasons / factors being the fact that it drives good corporate governance.

The Prince of Wales’ Accounting for Sustainability Project has developed a connected reporting framework. Moves are afoot to set up an International Integrated Reporting Committee (IIRC). This will be a collaboration of key stakeholders in reporting with representation from around the world and from the accounting profession, standard-setters, business, investors and inter-governmental organizations. The aim of the Committee will be to create international standards on integrated reporting.

Key Factors / Benefits of Integrated Reporting

The rise of the integrated report has all sorts of interesting implications. A single report raises the issue for auditors of combined assurance, covering both financial and non-financial information. Sustainability consultants should get a lot busier as companies improve – or create – their sustainability strategies, ensure that sustainable practices are embedded into the business, and reporting systems spew out relevant and credible data.

Highlighting some of the key benefits, certainly must cover the following:

An Integrated Business Conduct

  1. Reaching broad-based stakeholders (with some caution to start with)
  2. Robust monitoring system and above all
  3. The right start for an integrated performance management system

While these are certainly enticing benefits for organizations, there are several key factors that they needs to consider before getting into integrated reporting successfully. It is best for organizations that are already in the process of generating sustainability reports to convert them into integrated reports and will certainly be the direction for the future for all organizations irrespective of size – to ensure and ascertain good corporate governance as well its rightful communication!