GRI Sustainability Reporting Standards: Change shall come

Seemingly right on the heels of GRI G4 Guidelines is the GRI Sustainability Reporting Standards. Launched last 19 October 2016, its aim is to set a common language among companies for non-financial information disclosure and provide a means for even greater transparency on the economic, environmental and social impacts companies make.

The GRI Standards: an even better strategic reporting tool

While reception to the GRI G4 Guidelines have been positive and it remains the most widely used framework for sustainability reporting, the G4  guidelines are often subject to misinterpretation and reporting loopholes. We have seen sustainability reports serve as a platform to showcase revenue performance. Sometimes, imbalanced reporting occurs when positive impacts disproportionately outweigh negative effects.

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Increase in report numbers of GRI G4 Reports in the GRI Sustainability Disclosure Database

 

Amidst stakeholder demand for accountability and transparency, the new GRI Standards will fully replace the G4 Guidelines come 1 July 2018. With its rollout, there is an emphasis on due communication as well as a shift towards economic, environmental and social impacts. The transition entails an enhanced format and the use of six new modular structures that provide better clarity on reporting specifics (more on this below).

Levelling up: from Guidelines to Standard

The transition is seen as a move from following reporting guidelines into adopting formal reporting standards to ensure both adherence and consistency.  While the Standards remain voluntary, language clarity already identifies what is required (shall), what is recommended (should) and what is optional (can). Clear too beyond the language change is the rigor required to apply the Standards.

“The GRI Standards make it much easier for companies to report non-financial information, using a well-understood shared language,” said GRI Interim Chief Executive Eric Hespenheide. “The Standards are more straightforward, making them accessible to potentially millions of businesses worldwide. Sustainability reporting, using the GRI Standards, is the best way for a company to disclose its economic, environmental and social impacts, thus providing insights into its contributions – positive or negative – toward sustainable development.” 1

Face change to the look of the report, Materiality is still at center stage

The Standards are based on the G4 Guidelines, there is no substantive difference in terms of the vigor in reporting, determining materiality and content, nor in the credibility of assurance practices. How material issues are prioritized remains the same, though specifics on what is reported against the materiality principle are more robust.

In Accordance Option is retained the same as G4

One of the changes is that the Principal Manual + Implementation Manual have become the Modular Standards and the Reporting Principles/In Accordance Criteria, General Standard Disclosures, and Disclosure on Management Approach are now GRI 101, GRI 102 and GRI 103.

 

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Addressing cross-sectional issues, there are no longer Aspects, it is all Topics. These have been whittled down from 46 Aspects + Topics in G4 into 36 Topics as discussed in GRI 200 (Economic), GRI 300 (Environmental) and GRI 400 (Social). These include all Performance Indicators. No longer required, Sector Disclosures are referenced as guidance.

All the standards are numbered and there have been changes in order of Disclosure. Under the Standards, Grievance Mechanism is disclosed only if deemed material.

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To be In Accordance, Report against GRI 101, GRI 201 and GRI 301 is required plus a minimum of one (1) material topic disclosure for CORE, and each disclosure required for each material topic for COMPREHENSIVE. While the selection of Standards in GRI 200, GRI 300 and GRI 400 are based on the selected material aspects (references may be made in isolation).

Making the change

As a strategic tool, a sustainability report processed in the right way is powerful. It articulates the sustainable development of companies from vision to goal to development to achievement.

From G4 to the Standards, materiality is the bedrock of sustainability reporting and this is what should be reflected. Materiality assessment is central to determining stakeholder view and the impacts, positive and negative, of the business throughout the value chain. From this, alignment to the Guidelines or the Standards will follow.

Adoption of the GRI Standards is a welcome opportunity to address stakeholder expectations of transparency and accountability and communicate a company’s sustainability agenda though the changes necessitated by the Standards, in the G4 templates and formats we have just gotten used to, are neither simple nor few. However, in theory, it should be easier and quicker to report on any significant changes within a given reporting period as the Modular Standard format accommodates piecemeal changes. This is particularly significant for companies already having management processes in place, able to gather solid information, on how sustainability is integrated well within the business strategy.

For companies that are new to Sustainability Reporting, bear in mind that the Standards are not yet fast approaching. Reporting processes can be analyzed and modified to be in alignment with the Standards. A gradual transition from G4 to the Standards should be planned to allot the necessary time and resources for data gathering and document preparation.

References:

1 First Global Sustainability Reporting Standards Set to Transform Business. (2016, October 19). Retrieved from https://www.globalreporting.org/information/news-and-press-center/Pages/First-Global-Sustainability-Reporting-Standards-Set-to-Transform-Business.aspx

https://www.globalreporting.org/information/news-and-press-center/Pages/First-Global-Sustainability-Reporting-Standards-Set-to-Transform-Business.aspx

https://www.globalreporting.org/information/news-and-press-center/Pages/Leading-for-a-new-era-of-sustainability-GRIs-Combined-Report-just-released.aspx

https://www.globalreporting.org/standards

https://www.globalreporting.org/information/g4/transition-to-standards/Pages/default.aspx

Video Link:

https://www.youtube.com/watch?v=f68dTFEGcX8

 

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.