By Karthik Subburaman, Country Manager, ECCI Group
GRI 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
- 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
- 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
- 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.