Sustainability reporting evolving as a management tool

By: Darrell Delamaide

An improved reporting process is helping companies identify gaps in their sustainability practices, which, when closed, can lead to big savings

The latest guidelines from the Global Reporting Initiative (GRI), issued less than a year ago, are turning sustainability reporting into more of a management tool and less of a marketing exercise.

The new version, called G4, introduces a whole set of guidelines on governance and places the emphasis on prioritizing which actions of the organization have a truly significant impact on the environment and society.
The focus is more on ‘how’ the report is produced, rather than on ‘what’ it finally says. In other words, it is designed to engage the organization from the C-suite on down in managing the impact rather than putting out a checklist of indicators.

This was the message in a training session with high-level government officials (including several procurement officers) conducted in Washington on April 23 and 24 by BrownFlynn, a sustainability consulting firm and the first US-certified GRI training partner. This training was conducted in partnership with the World Business Council for Sustainable Development at WBCSD’s US offices.

To read the full article in Corporate Secretary magazine please click here.

Our GRI-certified G4 Bridging Module

Earlier this week, BrownFlynn hosted its first GRI-Certified G4 Bridging Module at Tower City Center in Cleveland, Ohio.  Our participants included representatives from Fortune 100 and S&P 500 companies who had previously received our training on the G3/3.1 Guidelines.  Since GRI first released the G4 Guidelines in May, BrownFlynn has developed comprehensive training materials to clearly communicate changes in the framework to a GRI-experienced audience.  In anticipation of the G4 framework, our trainees cited the new reporting levels and the enhanced focus on materiality as their primary concerns.

The new reporting levels of Core and Comprehensive represent perhaps the most noticeable change in G4, and therefore may be the first modifications reported to senior management or around an organization.  CEOs and Boards of Directors have grown accustomed to striving for an A or A+ level report in order to impress stakeholders with transparency efforts.  Removing the grade format is a positive development, but it may present sustainability leaders with the challenge of rephrasing goals and expectations.  For example, if an organization has set a long-term goal to achieve an A, adopting G4 will require envisioning this goal using different terminology.  We emphasize that GRI’s new standards for reporting levels constitute a clarified model of GRI as a management tool.  Both Core and Comprehensive reporters will be able to demonstrate adherence to the G4 framework in a way that clearly communicates their efforts around environmental, social and governance issues.  More importantly, reporters will enjoy greater differentiation from organizations that simply cite some of the Standard Disclosures rather than preparing a report in full accordance with G4.

In addition to shifting terminology, G4 represents a transformation in how organizations will need to approach materiality.  After reviewing the updated boundary expectations, our trainees expressed concern about the new requirements for measuring impacts both inside and outside of their organizations.  While we recognize that reporters may feel overwhelmed, the new standards actually decrease extraneous data collection and increase understanding of material issues for an organization.  Achieving a deeper and more meaningful comprehension of material impacts may feel like an intensive process initially, but an organization will reap the benefits of this process ten-fold as it develops its future goals and strengthens its relationships with stakeholders.  Simply put, G4 eliminates immaterial work and adds focus to the sustainability management process.

BrownFlynn looks forward to presenting another GRI-Certified G4 Bridging Module on October 3rd in Cleveland, OH.  We will also be offering GRI-Certified Course: The GRI Process on September 12th &13th at AIAG in Detroit, MI and on September 23rd & 24th at Robert Morris University in Pittsburgh, PA.  Training attendees for each of these courses will receive a G4 Certificate. Please visit our website for additional information.

–Sarah Corrigan

Ford, Shell and Anglo American show why materiality matters

BrownFlynn recently got a firsthand look at the G4 guidelines and summarized the top nine things one needed to know. No. 1 on this list: “Materiality is a must.”

While previous guidelines encouraged companies to determine materiality, they tended to focus on the number of indicators reported on and the application level achieved. The G4 guidelines explicitly require reporting efforts to focus on materiality, with the first step in the process being a robust materiality assessment followed by disclosure of material topics.

To read the entire blog post please click here.

Ten Global Companies Sponsor GRI G4 Guidelines

Last Wednesday, the Global Reporting Initiative (GRI) reported that ten global companies are supporting the two-year development of the GRI G4 Guidelines. Companies include Alcoa, Enel, GE, Goldman Sachs, Natura and Shell, as well as the Big 4 accounting firms: Deloitte, PricewaterhouseCoopers, KPMG and Ernst & Young.

GRI is the most widely used sustainability reporting framework, and an increasing number of companies are producing reports on their sustainability efforts and progress. With every iteration of the framework, GRI strives to create the most comprehensive and standardized guidelines for sustainability reporting, enabling more and more organizations to report to their stakeholders. Further, the landscape of sustainability reporting and subsequent regulation is constantly changing, so GRI continues to evolve its guidelines with it.

The G4 Guidelines are set to be published in 2013, and are in the development process as we speak. GRI is soliciting feedback from a range of stakeholders, including diverse working groups, as well as employing approval procedures and due diligence to ensure the guidelines reflect the broadest stakeholder base possible. The ten global sponsors will be part of The Global G4 Consortium, which will advise GRI on topics to consider in the development of the G4 Guidelines.  

For more information on the G4 Guidelines please click here. To read the entire press release from GRI please click here.