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The Global Reporting Initiative

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Title: The Global Reporting Initiative


1
The Global Reporting Initiative
Towards G3 of the GRI guidelines underpinning
the value of sustainability reporting Roger
Adams, Executive Director Technical,
Association of Chartered Certified Accountants /
GRI Board Member
ACCA/IAFA Seminar on social environmental
accounting Dublin 4.11.05
2
Accounting for and reporting on
sustainability
  • Sustainable development development which meets
    the needs of the present generation without
    jeopardising the abilities of future generations
    to meet their own needs
  • Organisation level approach the triple bottom
    line economic, environmental and social
    performance and impact
  • Accounting for sustainability issues
  • Internalities measurable costs and benefits
    exist whether they are captured and disclosed
    depends upon the accounting system chosen
  • Externalities usually costs such as
    environmental degradation and social impacts
    which are not born by the originating
    organisation and whose measurement (and
    subsequent disclosure) is open to debate

3
Accounting for and reporting on
sustainability
  • Reporting on sustainability issues
  • reporting on some or all elements of the TBL
    began in the early 1990s
  • The 2002 GRI sustainability reporting guidelines
    represent the most comprehensive attempt yet to
    set a generally accepted sustainability reporting
    framework
  • G3 of GRI is due in late 2006
  • CSR reporting vs. sustainability reporting? CSR
    does not necessarily acknowledge the
    sustainability context within which
    organisational strategy and activity occurs
  • Assurability remains a debateable issue

4
The Global Reporting Initiative
  • What is GRI
  • What are the benefits of GRI?
  • What do the GRI guidelines look like?
  • Who is using GRI?
  • How does GRI relate to other initiatives?
  • Where next for GRI?

5
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The 2002 GRI Sustainability Reporting Guidelines
www.globalreporting.org
6
problems and a solution
Stakeholders receive incomplete information
Companies receive diverse information requests
A generally-accepted reporting framework
developed through a multi-stakeholder process
7
THE GRI MISSION
  • Design and continually improve reporting
    guidelines reflecting the three dimensions of
    sustainability economic, environmental, and
    social
  • Guidelines published 2000, 2002, 2006
  • Elevate corporate sustainability reporting to the
    same level as financial reporting
  • Now deemed generally accepted?
  • Build a global and independent institution to
    steward the Guidelines
  • Foundation and Board created 2002

8
The pre-history of GRI
  • 1990 no reporting to speak of
  • 1991 ACCA UK environmental reporting awards
  • 1993 first Canadian reporting awards
  • 1995 first European reporting awards
  • 1997 GRI Steering Committee formed
  • 1999(ED) 2000 (Guidelines G1) 2002 (Guidelines
    G2)
  • 2002 GRI separately and legally constituted

9
GRI BASICS
  • What? sustainability reporting guidelines
    reporting on the economic, environmental and
    social aspects of organisational performance
  • Who? multi-stakeholder Board and governance
    structure
  • How? multi-stakeholder dialogue
  • Where? more than 75 countries
  • When? started late 1997, independent in 2002
  • How many? 750 companies cite the 2002
    guidelines as influencing report preparation / xx
    reporters claim to report in accordance with
    the 2002 Guidelines

10
HOW DOES GRI HELP?
  • Business identifies areas for improvement
    bolsters stakeholder communications
  • NGOs Labour facilitates dialogue with
    business provides consistent information
  • Investors standardised approach similar to
    financial reporting
  • Governments complements regulations

11
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We have calculated ethical and ecological
benefits of sustainability reporting to be in
excess of 20m profit contribution to products
and services. Producing a sustainability report
has enabled us to manage a whole host of
ethically and environmentally motivated risks
much more robustly www.co-operativebank.co.uk
12
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The trust capital we have earned over the
years is extremely valuable. It helps us develop
a reputation as a responsible company. Our
ethical profile certainly factors in on
stakeholders decisions, whether it is about
investments, business relations or
employment. It makes us an attractive business,
preferred partner, supplier and workplace.
www.novonordisk.com
13
SUSTAINABILITY REPORTING WHATS THE FEEDBACK?
  • Pleon Global Stakeholder Report 2005
  • Satisfaction with main issues covered
  • Environmental 75.5 (2003 74.4)
  • Economic 61.2 (2003 - ? But increase to 2005)
  • Social 55.2 (2003 48.7)
  • No. of respondents 495

14
SUSTAINABILITY REPORTING WHATS THE FEEDBACK?
  • Pleon Global Stakeholder Report 2005
  • Factors enhancing credibiity in CSR/SD reporting
  • Formal external verification (52.5)
  • Transparency re mistakes/bad practice (49.7)
  • Using an external reporting standard such as GRI
    (48.5)
  • Reporting on dialogue with stakeholders (45.5)

15
SUSTAINABILITY REPORTING WHATS THE FEEDBACK?
  • Pleon Global Stakeholder Report 2005
  • Stakeholder preference for formal external
    verification
  • Employees 45.6
  • Academics 57.6
  • NGOs 59.0
  • Financial community 71.0

16
GRI REPORTS WHATS THE FEEDBACK?
  • Pleon Global Stakeholder Report 2005
  • The 2002 GRI Guidelines are
  • A step towards standardisation - meaning more
    comparable reporting (65.9)
  • A flexible f/work for reporting (57.8)
  • An excellent benchmarking tool (48.9)
  • A step towards standardisation meaning a loss
    in creativity and flexibility in reporting
    (12.1)
  • No. of respondents 496

17
THE 2002 GRI GUIDELINESWHATS IN THEM?
  • How to use the guidelines
  • Reporting principles
  • Report content and guidance on report structure
  • Strengthened social and economic content
  • Core vs. additional indicators
  • Clarity on flexibility and recognition of
    leadership
  • Guidance on assurance

18
BASIC STRUCTURE OF A GRI REPORT
  • Vision and strategy
  • Organisational profile
  • Report scope
  • Governance structure, management systems and
    stakeholder engagement
  • GRI content index (in accordance with only)
  • Performance indicators
  • Assurance statement (not mandatory)

19
SUSTAINABILITY REPORTING PRINCIPLES
  • Transparency
  • Inclusiveness
  • Sustainability context
  • Completeness
  • Relevance
  • Neutrality
  • Comparability
  • Accuracy
  • Clarity
  • Timeliness
  • Auditability

20
PERFORMANCE INDICATORS
  • Economic monetary flows - bought in goods and
    services, payroll costs and benefits, taxation,
    distributions, donations, indirect (macro
    economic) impacts (13 indicators 10 core)
  • Environmental materials, energy, water use,
    waste, emissions, recycling, bio-diversity,
    suppliers, products, etc. (35 indicators 16
    core)
  • Social employment practices and policies,
    collective bargaining, health safety, training
    and education, diversity, human rights, bribery
    corruption, etc. (49 indicators 24 core)

21
CORE VS. ADDITIONAL INDICATORS
  • Core
  • A measure of relevance to reporters and users
  • Integral to comparability
  • General consensus forming
  • Additional
  • Leading edge but used by few reporters
  • Intensive interest to few stakeholders
  • In need of further testing

22
IN ACCORDANCE REQUIREMENTS
  • Report on the contextual and qualitative
    indicators.  
  • Include a GRI Content Index.  
  • Report on the core performance indicators.
    Omission of each core indicator must be
    explained.  
  • Ensure that the report is consistent with the
    listed sustainability reporting principles.
  • Include a statement by the Board or CEO as
    follows
  • This report has been prepared in accordance with
    the 2002 GRI Guidelines. We believe that this
    report is a balanced and reasonable
    representation of our organisations
    sustainability performance.

23
In accordance with GRI reporters a sampling
106 organisations in 24
countries Including
Musgrave Group Natura Novo Nordisk O2 Puma Raboba
nk SabMIller SC Johnson Shell International Suncor
Volvo West LB
ABN Amro Anglo American Axel Springer AG BHP
Billiton BMW BP BT Diageo Dow Chemical Ford Gaz
de France GM Grupo Santander Holcim Hydro
Quebec Iberia Intel
24
GRI COMPLEMENTARY INITIATIVES
Management Systems Standards
Codes of Conduct
GRI seeks to harmonize and integrate
Intangibles Accounting
Performance Standards
GRI
Issue/ Sector/Natl Reporting Guidelines
International Conventions
Assurance Standards
24
11-Nov-09
www.globalreporting.org
25
apparent chaos but
codes of conduct
management systems
assurance standards
performancestandards
governance standards
performancereporting
26
a generally-accepted SD/CSR framework?
governance standards (OECD)
codes (GC, OECD)
management systems (ISO)
performancestandards (SA8000)
assurance standards (AA1000AS)
performance reporting (GRI)
27
GRI in 2005
  • Board and Stakeholder Council well-established
  • 100 organisational stakeholders
  • 750 reporters 30 countries
  • a developing framework of documents
  • translations in Chinese, Dutch, French, German,
    Japanese, Russian Spanish

28
where are we now?
  • guidelines, sector supplements and protocols
  • 2002 guidelines due for revision 2006
    structured feedback process undertaken,
    workstream work complete, public comment period
    about to start
  • sector supplements issued for testing financial
    services, tour operators, telecommunications,
    mining, logistics, etc
  • sector supplements under development automotive,
    financial services, mining and metals, public
    agencies
  • protocols ready for testing child labour, water,
    HIV/AIDS, reporting boundaries
  • protocols under development health safety

29
G3 of the Guidelines what changes and why? 1
of 2
  • Improved flow within document
  • from SD context gtgt organisational response and
    vision gtgtgt reporting principles gtgtgt performance
    indicators gtgtgt technical protocols
  • Improved governance and financial risks sections
  • Tests to support reporting principles such as
    relevance and completeness
  • Reduction in the number of indicators to improve
    relevance

30
G3 of the Guidelines what changes and why? 2
of 2
  • Development of a management disclosure
    framework (MDF) to capture relevant systems
    management issues more clearly
  • Full set of technical protocols containing
    measurement guidance
  • Improved harmonisation of resultant indicators
    with external protocols
  • Tiering system to replace current in
    accordance with reporting criteria set
  • Development of fully XBRL enabled web-based
    version of G3 to facilitate external use

31
www.globalreporting.org
  • Conclusions
  • Demand for improved user friendliness has driven
    the proposed changes
  • At the same time the authors have striven to
    achieve greater rigour
  • New set of Technical Protocols supported by
    proposed new XBRL facility will enable greater
    comparability of reports
  • Assurance of sustainability reports remains a
    contentious issue

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