Global Reporting Initiative Workshop

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Global Reporting InitiativeWorkshop
Facilitator Teodorina Lessidrenska
Supervision Enrique Torres Nelmara Arbex
(GRI Learning Services)
October 2008
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Why are you here?

• Please, write in a small piece of paper, the main
  reason, why each of you, are attending this
  workshop? (Use 3 or 4 key words and write in
  capital letters).
• Introduce yourself, giving name, country you are
  based in organization. Finish by saying why you
  are here referring to your card.

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Workshop Objectives

• Participants will be able to
• Recognize the changes in business context the
  drivers for sustainability for organizations.
• Differentiate between philanthropy and
  responsible (sustainable) management.
• Explain what is GRI and how it can help your
  organization.
• Identify the main characteristics of the GRI
  framework for reporting.
• Explain linkages between GC and GRI and how you
  can comply with the GC COP requirements in a GRI
  report
• Explain the 5 phases to prepare a GRI report.
• Provide a list of activities to be done under
  each phase.
• Prepare a realistic plan for covering the major
  activities necessary to complete a GRI report.

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Workshop Program

• Introduction to sustainability issues reporting
  (30 min)
• Changes in business context and drivers for
  sustainable business development. Difference
  between philanthropy and sustainable management.
• Emergyng architecture/system for sustainable
  business development and the role of
  sustainability reporting. How can your company
  benefit from sustainability?
• About GRI the G3 Framework and linkages to GC
  (30 min)
• What is GRI and how it can help your
  organization.
• Main characteristics of GRI framework for
  reporting.
• Linkages between GC and GRI. G3 and COP
  alignment.
• Small groups break out session Self Assessment
  (90 min)
• About GRI reporting process (100 min)
• Five phases to prepare a GRI report.
• Activities to be done under each phase. Parallel
  with COP.
• Small groups break out session My Plans for GRI
  Implementation (90 min)

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Introduction to basic concepts, standards and
trends in sustainable business development and
reporting
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Key concepts and trends in sustainable business
development and reporting

• What is sustainability?
• What is going on in the world?
• How does society react to face these problems and
  how does it change the expectations for the role
  of business and its sustainability
• Emerging Global Architecture for Sustainability,
  sustainability reporting and how your company can
  benefit?

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What is Sustainability?

• Sustainability - The Brundtland Report of 1987
  
• Development that meets the needs of the present
  without compromising the ability of future
  generations to meet their own needs
• Sustainable business development is the art of
  doing business in world where companies and
  society are interdependent ..where by taking into
  account EES/ESG risks and opportunities the
  company reinforces its strategy to improve its
  competitiveness and endures capability to create
  value..Value defined as shared shareholder and
  societal value

• A business response to
• Expanding environmental, social and economical
  challenges and opportunities
• Growing expectations from shareholders and
  stakeholders for accountability and comprehensive
  approach towards solutions

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World in peril climate change energy crisis
NASA has reported that 2005 was hottest year
since records began in the 19th century.
Atmospheric CO2 concentration in 2005 exceeded
any natural fluctuations over the past 650,000
years and continues to grow. The rising CO2 level
is linked to the use of fossil fuels (coal, oil
and natural gas) as our dominant sources of
energy. It results in climbing land and ocean
temperatures leading to sea level rise, extreme
weather, steep degradation of biodiversity and
shortages of food and water supplies. The
alternative renewable energy sources,
technologies and markets which are growing
briskly hold some of the answers to the energy
crisis and to climate challenges .

• Challenges Opportunities cut CO2 emissions,
  efficient energy production and consumption and
  effective energy saving and conservation measures
  in operations, product/service design and the
  transition from traditional to renewable energy
• How are the climate change and the energy crisis
  risks and opportunities evaluated and how are
  they being addressed in your company?
• Sustainability leaders like Toyota Co. (with its
  winning Prius hybrid car) are already positioned
  with innovative products as market leaders of the
  future.

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World in peril water crisis waste
According to the OECD, the situation represents,
"one of the greatest human development challenges
of the early 21st century Growing water
consumption, overuse and pollution, combined with
climate change effects, such as drought, are
resulting in water supply shortages of growing
proportions worldwide affecting rich and poor
countries alike. The Organisation for
Economic Cooperation and Development (OECD)
projects that by 2030 about 47 percent of the
world's population, will be living in areas with
severe water stress and the water scarcity would
continue to worsen. Approximately 93 of the
materials we use never end up in saleable
products at all, but are discarded during the
production process approximately 80 of what we
produce is discarded as waste after a single use.
The keys to efficient resource use are the so
called "4Rs" of water and waste management
Reduce, Reuse, Recycle and Recover.
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World in peril water crisis waste

• Challenges Opportunities rising water prices,
  unpredictable water supply, water
  conservationpurification, reduce, recycle, reuse
  of resources, Zero Waste approach in product
  design
• What is being done in regard to the conservation
  and recycling of resources in your company? How
  important is water and how is being used? How are
  resources-related risks and opportunities
  evaluated and how are they being addressed?
• Sustainability leaders like Coca Cola (Water
  Initiative) and
• Procter Gamble (bio-degradable detergents and
  pampers) are addressing water crisis and consumer
  concerns for the environment.

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World in peril social economic challenges

• 85 of global wealth belongs to the richest 10.
  Poorest ½ of world population own about 1 of
  global wealth. Lack of basic quantity and quality
  of food and water, illiteracy, illness, no income
  or insufficient wages, are a day to day reality
  for the poorest.
• 44 of the top 100 economic entities are
  companies. Companies can concentrate a high
  amount of financial, technical (research and
  technology), natural human resources (experts)
  and can influence political decisions.
• Business is expected to address and act upon the
  social and economic problems and to provide
  long-term comprehensive solutions beyond just
  corporate welfare and donations.

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World in peril social economic challenges

• Challenges Opportunities risks of
  corruption/undemocratic national governance,
  diversity and strengthening local capacity,
  reputation risks related to human rights and
  labor rights compliance, wages and incentives,
  brand and reputation as factors to attract/retain
  talent, successful healthy companies need healthy
  prosperous communities
• How does your company contribute to the
  prosperity of its employees and the community?
  Are you ready to win the war for talents? How
  does your company addresses risks and
  opportunities related to its human resources
  the communities where it operates?
• Sustainability leaders like Nestle ensure
  sustainable reliable direct access to commodities
  they need through social investment in their
  worldwide networks of small suppliers.

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Todays company integral to society

• In addition to the pressing environmental and
  social challenges climate, energy, natural
  resources (water, food..), health, security,
  poverty..
• Globalization challenges and opportunities are
  changing the role of business and its
  relationship with the society
• Growth, profitability, impacts risks business
  seen as a problem source and solution
• Informaton technology news reach millions with
  a click of a mouse
• Diverse shareholders pension funds/everyone is
  a shareholder
• The interests of company and society converging
• Growing pressure for greater disclosure and
  transparency on both financial and non-financial
  aspects of business performance from
• shareholders, regulators, investment analysts,
  financial risk managers, insurance companies,
  buyers, NGOsyour children...
• Trust and confidence in the company by the
  stakeholders drives the company value Your
  companys performance and impacts are now
  everyones business!

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Sustainability a Corporate Governance priority

• The economic value of the company of
  todaytomorrow not equal to the financial book
  value estimate assessment...
• It is determined by stakeholders confidence in
• Brand and goodwill
• Reputation of management and board
• Quality of governance
• Strategic direction
• Sustainability (ESE/TBL/ESG) in the form of
  sustainability strategy, with sustainability
  reporting and management integrated into the core
  business operations
• ... as intangible valuable assets added to the
  company financial book value.
• Shareholders and broader stakeholders -
  increasingly interested in how the company
  addresses sustainability through both financial
  and extra-financial performance (OECD Guidelines
  on Corporate Governance/CG Codes)
• Companies expected to move beyond just
  philantropy to sustainability strategy and manage
  their overall sustainability impacts and
  performance
• Financial report/balance sheet doesnt provide
  answers on governance, strategy and
  sustainability - sustainability reporting emerges
  as complimentary to financial reporting

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Evolution from philanthropy to sustainability
strategy and management
Both important, but different in scope lead to
different results.
Philanthropy
Sustainable (responsible) management

• Addresses philantropy together with
  compliance/mitigation of negative impacts and
  other sustainability strategy priorities
• Proactive and totally related to and integrated
  in every-day business decisions (selecting
  employees, defining better salaries, choosing
  suppliers, changes the way to use natural
  resources, etc.) and to core business strategy
• Integral approach to addressing both the
  every-day life and interests of the community and
  the company interests
• Do try to identify and take decisions on causes
  of problems

• Reactive pay back to the local community NOT
  related to core strategy and every-day decision
  of business (sponsoring schools/museums,
  restoration of buildings, etc.)
• Gives support to local communities where not
  available from the state or other sources
• Do not treat the causes of the problems

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Emerging Architecture for Sustainability
Overarching aspirational and normative
framework UN Global Compact, OECD guidelines for
MNE, ILO
Generally accepted accounting principles for
sustainability (GAAPS) standards and tools GRI
(G3) framework, IAASB , AA1000 series
Marketplaces CO2 Trading Scheme, Green House Gas
register, Dow Jones Sustainability Index
Management systems Occupational Health Safety
zone (OHS AS) 18000, Eco-management Audit Scheme
(EMAS), ISO 14000/9000, etc.
Sector specific performance standards Social
Accountability-8000, Forest Stewardship Council
Regulatory and legal framework French Article
116/Law 2001-420, Sarbanes-Oxley act
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How can you benefit from sustainability?
... sustainability reporting gives you the
information needed to act toward
Compliance with laws and standards
Efficient governance management

• Compliance with expanding laws regulations
• Compliance with international agreements on human
  rights, labor rights, etc.
• Make progress on GC principles and meet COP
  requirements
• Meet corporate supply chain reporting
  requirements
• Comply with Stock Exchange, Sustainability
  Indexes and other market-based CSR requirements

• Compliance with Corp.Govern. Guidelines and codes
• Ensure efficient Corporate Governance
• Business strategy incorporating sustainability
• Comprehensive risk management
• Brand management (Brand value increase 6 ABN
  AMRO Real, Brazil)
• Innovation and leadership for long-term
  sustainable shareholder value
• Management systems integrating sustainability
  management

Operational efficiency/costs-cutting
Retain talent improve relationships

• Minimise use of energy and resources (water, raw
  materials) and waste-creation in operations
• Potential cost savings in offices cut in total
  energy costs (up to 16, Deutsche bank), drop in
  banks office building energy cost (up to 35,
  Unibanco SA, Brazil) water consumption (20
  Deutshe Bank), fuel paper and waste costs cut
• Materials recoveryrecycling, parts reuse
  integrated in product design, maintenance, and
  end of product life cycle

• Improved access to capital Socially Responsible
  Investors (SRI) and public finance, niche market
  investments, specialized funds
• Employee satisfaction and engagement increase
  (25 ABN AMRO Real, Brazil)
• Attract, develop and retail talent
• Improved relationships with third parties that
  hold power to influence operations and
  profitability clients, regulators, governmental
  authorities, suppliers, local communities, NGOs,
  etc.

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What is sustainability reporting?

• Measuring, disclosing and being accountable to
  internal and external stakeholders for your
  organisations environmental, social and economic
  impacts and performance towards the goals of
  sustainable development. (GRI Guidelines 2006)
• Sustainability report should
• Provide balanced (positive and negative)
  information
• Serve various information needs of reporter and
  its stakeholders, such as benchmarking,
  comparison with other organisations, investment
  and purchase decisions, management and strategic
  development within the reporting organisation,
  etc.
• Disclose disclose the outcomes and results that
  occured within the reporting period in the
  context of organisations commitments, strategy
  and management approach.

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About GRI the G3 Framework
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GRI reporting framework main characteristics and
linkages with the GC

• What is GRI?
• Maun characteristics of the GRI framework and
  reporting requirements.
• Linkages between GRI and Global Compact (GC)
• Alignment between the GRI Framework and the GC
  COP

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GRI network organization

• Vision/Misson By development/continuing
  improvement of GRI Guidelines for reporting on
  organisations E/S/E performance and impacts, to
  ensure sustainability reporting becomes as
  routine and comparable as financial reporting
• Global network of 5000 practitioners
  (reporters and readers) involved in
  development,use, and improvement of GRI
  Guidelines
• Independent institution since 2002 Secretariat
  based in Amsterdam, The Netherlands facilitates
  the networkresponsible for quality control and
  Guidelines revisions

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GRI in a nutshell

• Globally accepted standard for SR by any type
  organisation framework of SR principles and
  indicators in GRI Guidelines (G3) and portfolio
• New approach to reporting and compliance
• report or explain rule
• stakeholder dialogue
• long-term commitment to reporting, mgmt and
  gradual performance improvements
• Voluntary application, but growing pressure for
  becoming mandatory
• Harmonisation with key CSR initiatives (GC,OECD
  Guidelines, CG Initiatives/codes, SE
  Sustainability Indexes, etc.) and with financial
  accountancy and reporting
• Collaboration on development linkages on key
  issues HIV/AIDS, MDGs, GHG/Global Warming,
  Water, SME reporting, etc.

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GRI Reporting Framework

• Comprehensive guidance on How to report?
• Principles
• Reporting process report organization

Report Content Materiality Sustainability
context Stakeholder inclusiveness Completeness Re
port Boundary
Report Quality Balance Accuracy Comparability Reli
ability Clarity Timeliness
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Our map of the G3
Sector Supplements
Indicator Protocols
National Annexes new development
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Economic Category Economic Indicators (EC 1-9)

• Aspects
• Your market Presence
• Wages compared to local min wage, policies for
  local hiring
• Indirect Economic Impact of your company
• Positive and negative to local, national, global
  community through infrastructure investments and
  services (commercial, in-kind and pro-bono)
• Economic Performance of your company
• Example
• EC1 Direct economic value generated and
  distributed, including revenues, operating costs,
  employee compensation, donations and other
  community investments, retained earnings, and
  payments to capital providers and governments.

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Environmental Category Environmental Indicators
(EN 1-30)

• Aspects
• Materials
• Used and recycled by weight and volume
• Water
• Example
• EN8 Total water withdrawal by source.
• Energy
• Energy consumption
• Product and services (initiatives to minimize
  impacts)
• Environmental compliance
• Transport (emissions/spills/waste/noise)
• Biodiversity
• Land adjacent to protected areasor with high
  biodiversity value
• Total Emissions/Effluents/Waste
• Green House Gas and other gas emissions (ODS,
  NxOy/SxOy, etc.)
• Water discharge Spills
• Waste by weight and type

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Social Categories Indicators
Labour Indicators (LA1-14)
Human Rights Indicators (HR1-9)

• Employment
• Occupational health and safety
• Training and education
• Labor/management relations
• Diversity and equal opportunity
• Example LA13 Composition of governance bodies
  and breakdown of employee per category, according
  to gender, age, minority group...

• Investment and supplier contracts
• Non-discrimination
• Freedom of association
• Child labour
• Indigenous rights

Product Responsibility (PR1-9)
Society (SO1-8)

• Marketing and communications
• Customer Health Safety

• Corruption
• Community impact
• Public Policy

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GRI Sector Supplements
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GRI Index (XAC Bank)
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G3 Application Levels
The organization can ask external expert to do
check but can also approach GRI technical area
directly. GRI-OS have this service for free.
C
C
B
B
A
A
Report Application Level
Profile
Partial
All
All
Mgmt Approach
Standard Disclosures
Yes
No
Yes
Report Externally Assured
Report Externally Assured
Report Externally Assured
Performance Indicators
50 Core Sectors
10 from 3
20 from 6
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GRI steady growth

• 2000 GRI Reporters
• Europe/UK (Shell, BP, BT, Rabobank, ABNAmro,
  City of Amsterdam, KLM)
• USACanada (GM, Alcoa, BA, Citibank)
• Africa (Absa, Old Mutual of SA)
• Japan (Maxell)
• Australia (BHPBilliton, Credit Union FA)
• Latin America (Energias do Brazil)
• Russia (LUKOIL, Norilsky Nikel, TNK-BP)
• International Institutions (IUCN, WB..)

GRI Reporters
65 Countries
Small enterprises
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GRI and the Global Compact

• A strategic partnership launched in 2006
• GC signatories are committed to aligning their
  operations and strategies with ten universally
  accepted principles in the areas of human rights,
  labour, environment and anti-corruption. GC
  involves more than 4300 companies from 120
  countries
• The GRI provides a framework of principles and
  indicators for any type and size company or
  organisation to report on their progress,
  strategies and goals in environmental, social and
  economic performance, impacts and governance. GRI
  ensures
• Comparability of reports
• Reliability and quality of the reported
  information
• Global recognition by all stakeholders and key
  initiatives/GRI brand
• GRI aligned with the GC principles and
  recommended to GC members to use as a framework
  for reporting on COP. The GRI reports meet the
  COP requirements (and exceed them)
• For each GC principle GRI offers a list of
  indicators that companies can use definitions,
  measurement approaches and data collection and
  reporting guidance are provided through GRI
  Indicator Protocols.

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Labour Principle 6 Business should uphold the
elimination of discrimination in respect of
employment and occupation
Relevant GRI Indicators
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