The GRI Guidelines: Your Tool for Improved Performance and Competitiveness

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The GRI GuidelinesYour Tool for Improved
Performance and Competitiveness

• Workshop on Demonstrating Leadership through
  Sustainability Reporting
• November 10th to 12th 2001
• Central European University, Budapest, Hungary
• Teodorina Lessidrenska, GRI Secretariat

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GRI MISSION

• Design and continually improve reporting
  guidelines reflecting the three dimensions of
  sustainability economic, environmental, and
  social
• Elevate corporate sustainability reporting to the
  same level as financial reporting
• Build a global and independent institution to
  steward the Guidelines

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KEY FEATURES OF THE GUIDELINES

• Multi-stakeholder
• Standardized
• Applied
• Tested and revised
• Voluntary
• Evolving

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THE GRI GUIDELINES PROVIDE YOU WITH
A framework for reporting on the environmental,
social, and economic dimensions of of
sustainability that promotes comparability
between reporting organizations while recognizing
the practical considerations of collecting and
presenting information across diverse reporting
organizations. GRI Guidelines June 2000
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THE GUIDELINES DO NOT PROVIDE

• Guidance for implementing data collection,
  information, and reporting systems, or
  organizational procedures for preparing reports.
• Guidance on monitoring performance or
  verification practices.
• NOTE The Guidelines do not present standard of
  performance. The performance of organizations
  publishing GRI reports is evaluated by
  benchmarking organizations and other report
  users.

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VALUE OF USING THE GUIDELINES

• At board level provide an internal vehicle for
  evaluating the consistency between policy and
  actual performance
• At operational level - offer a structure for
  applying sustainability concepts to the
  organizations operations, services, and
  products. Guides the development of data and
  information systems for tracking progress
• Provide a framework for sharing and promoting
  dialogue with external and internal stakeholders

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WHO SHOULD USE THE GUIDELINES?

• Applicable to any size and type organization
  worldwide
• Voluntary application
• June 2000 Guidelines developed primarily for the
  business sector
• Strengthening sector-specific reporting and
  reporting for SMEs is on the GRIs future agenda
• Intended to support and supplement existing
  local, national, and international disclosure
  requirements

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GUIDELINES TABLE OF CONTENTS
Part A Introduction and General Guidance Part
B Reporting Principles And Practices Part C
Report Content Part D Annexes
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GUIDELINES TABLE OF CONTENTS - Part A
Part A Introduction and General Guidance 1 What
Is the Global Reporting Initiative? 2 Why Is
There a Need for the GRI? 3 What Is the History
and Evolution of the GRI? 4 What Do the
Guidelines Provide? 5 What Is the Value of Using
the Guidelines? 6 Who Should Use the Guidelines?
7 Using the Guidelines Specific Issues 8
Verification of GRI Reports 9 Relationship of
the Guidelines to Other Initiatives
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GUIDELINES TABLE OF CONTENTS Part B
Part B Reporting Principles And Practices 1
Underlying Principles of GRI Reporting (reporting
scope and period, boundary of the organization,
etc.) 2 Qualitative Characteristics (relevance,
reliability, clarity, comparability, timeliness,
verifiability) 3 Classification of
Performance-Reporting Elements (categories-e.g.
air, labor aspects-e.g. greenhouse emissions,
child labor quantitative and qualitative
indicators e.g.tons of CO emissions per unit,
adherence to a specific standard on child
labor) 4 Ratio Indicators (e.g. eco-efficiency
production volume per unit of waste) 5 Disclosure
of Reporting Policies (e.g. scope of report
approaches used to collate data disclose that
reports have been prepared in accordance with the
Guidelines)
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GUIDELINES TABLE OF CONTENTS Part C
Part C Report Content 1 CEO Statement (describes
key elements of the report and establishes
credibility with internal and external
stakeholders) 2 Profile of Reporting Organisation
(organization profile and an overview of the
scope of the report) 3 Executive Summary and Key
Indicators (balanced overview of the reports
contents in an easily accessible format) 4 Vision
and Strategy (vision for the future and how that
vision integrates the three dimensions of
sustainability) 5 Policies, Organisation, and
Management Systems (organizations governance
structure and management systems, and discussion
of stakeholder engagement) 6 Performance
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GUIDELINES TABLE OF CONTENTS Part C

• C Report Content
• 6 Performance section
• Covers the organizations environmental, social,
  and economic performance, through the use of
  quantitative and qualitative indicators as well
  as supplementary information, for the current
  period, at least two previous periods and a
  target period.
• Four subsections
• Environmental performance
• Economic performance (for piloting)
• Social performance (for piloting)
• Integrated performance (for piloting)

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ENVIRONMENTAL PERFORMANCE Part C.6.

• Generally applicable indicators relevant to all
  organizations, regardless of their sector,
  location, size etc.
• Organization-specific indicators relevant to
  the organizations industry sector and geographic
  location, they arise by consultation with
  external and internal stakeholders.

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ENVIRONMENTAL PERFORMANCE INDICATORS

• Energy
• Materials
• Water
• Emissions, Effluents, and Waste
• Transport (only organization-specific)
• Suppliers
• Products and Services
• Land-Use/Biodiversity (organization-specific)
• Compliance (organization-specific)

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ENVIRONMENTAL PERFORMANCE INDICATORS (a
sample)

• Energy (joules)
• Generally Applicable
• 1.1. Total energy use.
• 1.2. Amount of electricity purchased, by primary
  fuel source, where known. Amount self-generated.
• Organization-Specific
• 1.3. Initiatives to move towards renewable energy
  sources and energy efficiency.
• 1.4. Total fuel use. Vehicle and non-vehicle
  fuel, by type.
• 1.5. Other energy use

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ENVIRONMENTAL PERFORMANCE INDICATORS (a
sample)

• Materials (tones or kilograms)
• Generally Applicable
• 1.6. Total materials use (other than fuel and
  water).
• Organization-Specific
• 1.7. Use of recycled materials (pre- versus
  post- consumer use).
• 1.8. Use of packaging materials.
• 1.9. Use of hazardous chemicals/materials
  (define basis for identification).
• 1.10. Objectives, programmes and targets for
  materials replacement (e.g. substituting
  hazardous materials with less hazardous
  alternatives)
• 1.11. Naturally occurring (wild) animal and plant
  species used in production process. Harvesting
  practices for these species.

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ECONOMIC PERFORMANCE INDICATORS

• Profit
• Intangible Assets
• Investments
• Wages and Benefits (total wage expense)
• Labor Productivity
• Taxes
• Community Development
• Suppliers
• Products and Services

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SOCIAL PERFORMANCE INDICATORS

• Workplace
• Quality of Management, Health and Safety, Wages
  and Benefits (ratios of lowest wage to national
  legal minimum, local cost of living, etc.),
  Non-discrimination, Training/Education, Child
  Labor, Forced Labor, Freedom of Association
• Human Rights
• General, Indigenous Rights, Security, Suppliers
• Products and Services

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INTEGRATED PERFORMANCE INDICATORS

• Systemic
• Link performance at the micro level with
  economic, environmental, and social conditions at
  macro level (sectoral, national, regional, and
  global)
• Wages and benefits, or investment in research and
  development, at the organizational level
  expressed in relation to sectoral or national
  totals.
• Effects of production emissions/discharges on
  biodiversity.
• Cross-cutting
• Bridge information across two or more of the
  three elements of sustainability of an
  organizations performance
• Effects of production emissions/discharges on
  human health.
• Eco-efficiency for selected products and
  services.

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GUIDELINES TABLE OF CONTENTS

• Part D Annexes
• 1 Resources for Selecting and Applying Indicators
  
• 2 Guidance on Incremental Application of the
  Guidelines
• 3 Guidance on Verification
• 4 Guidance on Ratio Indicators
• 5 Guidance on the Vision Section (on web site)

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USING THE GUIDELINES SPECIFIC ISSUES

• Stakeholder engagement
• Incremental reporting
• Flexibility in the report structure
• Strengthening sector-specific reporting and
  reporting for SMEs is on the GRIs future agenda
• Intended to support and supplement existing
  local, national, and international disclosure
  requirements

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GRI THE GUIDELINES

• Provide NGOs, community groups, and other
  stakeholders with reliable, relevant and timely
  information
• Promote well-established and widely accepted
  reporting principles
• Encourage standardized reports to make industry
  comparisons
• Maintain openness and transparency throughout
  the process

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GRI IS NOT A CODE OF CONDUCT
But can strengthen all such codes
UN Global Compact
CERES Principles
OECD Guidelines for Multinationals
Global Sullivan Principles
GRI
Others
www.globalreporting.org
18 July 2001
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TRANSPARENCYnot OPTIONAL... ESSENTIAL
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GRI THE INTERNATIONAL REPORTING STANDARD

• Corporate uptake
• Government initiatives
• Civil Society Engagement

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KEY FEATURES OF THE GUIDELINES

• Multi-stakeholder
• Tested and revised
• Standardized
• Applied
• Voluntary
• Evolving

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GRI BUSINESS ENGAGEMENT

• Reporting based on the GRI Guidelines (Structured
  Feedback Process)
• Industry Specific Supplements
• Measurement Working Group (MWG)
• Verification Working Group (VWG)
• Ongoing Communication, Consultations, and
  Feedback

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WHY COMPANIES USE THE GUIDELINES?

• Efficiency
• Internal management improvements
• Stakeholder consultation
• Attract employees and investors
• Manage risk and protect reputation
• Credibility
• Competitive advantage
• Investors standardized approach similar to
  financial reporting
• Governments complements regulations

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GRI REPORTERS A SAMPLING
American Home Products ATT Baxter Biffa Waste
Services Ltd. Body Shop International Bristol-Mye
rs Squibb British Airways BT Carillion
Electrolux ESAB Ford Motor Company Fuji
Xerox General Motors Henkel ITT/Flygt
SASOL Scandiflex Shell Severn Trent SITA South
African Breweries Suncor Energy Sunoco Swedish
Meats Thames Water TransAlta TXU
Europe VanCity Savings Credit Union Vauxhall
Motors Ltd VAW Aluminium Waste Recycling Group.
Johnson Johnson Kirin Brewing KLM Konica
Landcare Research NEC Nissan Nokia Novo Nordisk
Procter Gamble Renfe Ricoh Royal Sun
Alliance Royal Philips Electronics Saint-Gobain S
AS
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GOVERNMENT UPTAKE OF GRI

• European Union CSR guidelines
• Japanese Environment Agency
• United States EPA Performance Track
• Australian, British, French activities

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  CSOs ENGAGED IN THE GRI A SAMPLING
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 CSOs ENGAGED IN THE GRI A SAMPLING (CONTINUES)
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GRI COMPLEMENTARY INITIATIVES
SA 8000
AA 1000
GRI seeks to harmonize and integrate
CERES
WEF
Sector-specific initiatives are more focused
SIGMA
GRI
IRRC
ISO
EC CSR

• GRI as a core platform for sustainability
  reporting

www.globalreporting.org
18 July 2001
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REVISION OF GUIDELINES

• 4/99 Exposure draft beta test
• 5/00 Guidelines Version 1.0
• Mid-2002 Version 2.0
• Current activity
• Measurement Working Group guiding 10 work streams
• Structured Feedback Process with 31 companies

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The GRI Guidelines are a huge achievement. So
huge that few firms, big or small, can ignore
them. The Guidelines, thanks to GRIs massive
commitment to inclusiveness, have fast become the
leading way for companies to respond to the
growing global demand for corporate
accountability. Tomorrow magazine November/Dece
mber 2000
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DIFFERENT WORDS, SAME CONCEPT

• Business Reporting
• Financial Accounting Standards Board
• Non-financial Information
• International Accounting Standards Committee
• Quality of Management
• SAM Group/Dow Jones
• Intangible Assets
• Cap Gemini Ernst Young

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CURRENT EFFORTS AT TRANSPARENCY

• Selective
• Inconsistent
• Incomplete
• Confusing
• No generally accepted principles equivalent to
  financial reporting

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UPTAKE OF GRI

• Business
• More than 60 companies have already released GRI
  reports
• 31 companies have joined Structured Feedback
  Process
• Many commercial ventures making use of Guidelines

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ACCOUNTABILITY STRUCTURES
www.globalreporting.org
18 July 2001
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PROLIFERATING INITIATIVES
AA1000
Dutch Govt
EC CSR
CERES
VfU
UNEP
CEFIC
EMAS
UN/ECE PRTR
MITI/JEMAI
WBCSD
UK Pensions Funds
SA 8000
US EPA
EPI SPI Finance
ISO
SIGMA
Global Responsibility
www.globalreporting.org
18 July 2001
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FUTURE PRODUCT PORTFOLIO
www.globalreporting.org
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STRUCTURED FEEDBACK VOLUNTEERS
www.globalreporting.org
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STRUCTURED FEEDBACK VOLUNTEERS
www.globalreporting.org
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GRI REPORTERS

• 88 reporters
• From 15 countries
• USA, UK, and Japan are early adopters
• 1.4 trillion in revenues

www.globalreporting.org
October 2001
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GRI REPORTERS BY COUNTRY
www.globalreporting.org
October 2001
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GRI REPORTS INTERNAL REVIEW

• 25 reports, selected indicators
• Objectives
• Conformity of reports with Guidelines, not
  verification
• Relevance of indicators
• Variation in coverage of indicators (e.g., energy
  use and sources)
• Comparability is a long way off

www.globalreporting.org
October 2001
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STRUCTURED FEEDBACK PROCESS

• 31 companies from 10 countries, numerous
  industries
• Responded to 8 page questionnaire
• Asked about Guidelines content, value to
  reporters and stakeholders, etc.
• Individual responses summary on Internet
• No connection to governance or special influence

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STRUCTURED FEEDBACK PROCESS

• Specific suggestion for adding/deleting
  indicators
• Request for definitions, examples
• Request for flexibility
• Many comments on water use, labor practices,
  economic indicators
• Reporting boundaries are inconsistent

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GUIDELINES TABLE OF CONTENTS
Part C Report Content 1 CEO Statement 2 Profile
of Reporting Organisation 3 Executive Summary
and Key Indicators 4 Vision and Strategy 5
Policies, Organisation, and Management Systems 6
Performance Part D Annexes 1 Resources for
Selecting and Applying Indicators 2 Guidance on
Incremental Application of the Guidelines 3
Guidance on Verification 4 Guidance on Ratio
Indicators 5 Guidance on the Vision Section (on
web site)
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GRI MEASUREMENT WORKING GROUP
Social Work Stream   Social Subgroup 1 Labour
Practices Social Subgroup 2 Human Rights Social
Subgroup 3 Community, Society, and
Development    Environmental Work
Stream   Environment Subgroup 1  Water
Protocol Environment Subgroup 2 Energy
Consumption Protocol Environment Subgroup
3 Biodiversity Indicators Environment Subgroup
4 Communication with and
Assessment of Environmental
Conventions  Economic and Integrated Work
Stream   Economic Subgroup 1 Conceptual
Framework Integrated Subgroup 1 Micro Macro
Linkages Integrated Subgroup 2 Crosscutting
Indicators
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REPORTING ON THE RISE
Sustainability
Number of Reports
Environmental only
www.globalreporting.org
18 July 2001
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REPORTING DRIVES INTERNAL IMPROVEMENTS

• Set targets
• Understand linkages, identify deficiencies
• Measure outcomes
• Benchmark
• Communicate commitment
• Influence long-term strategic decisions
• No connection to governance or special influence

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It was the GRI reporting process that prompted
our announcement last fall to increase the fuel
efficiency of our SUV fleet by 25 percent by
2005.   Deborah Zemke Director of Corporate
Governance Ford Motor Company April 2001
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In effect, GRI reporting will help us define and
communicate who we are and what we believe and
value. It will enable us to honestly spot and
work to close the gaps between our beliefs and
our performance. In the end, we think this will
make us a better, more successful
company.   William Blackburn Vice President
Chief Counsel for EHS Baxter International Septem
ber 2000
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BACKUP SLIDES
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FUTURE GRI ACTIVITIES
Supply
Verification
Quality and quantity of reported information
Assurance regarding credibility and reliability

• Core report
• Industry specific
• Detailed Protocols

General Principles

• Protocols
• Accreditation

Scope of GRI
www.globalreporting.org
18 July 2001
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 MULTILATERALS ENGAGED IN GRI A SAMPLING