There has been much speculation about what the Global Reporting Initiative will do with G4 to improve on the sustainability reporting guidelines set out in G3.1. Will G4 include controversial features like executive pay transparency, do away with the much loved (by American corporate over-achievers) letter “grades” for levels of transparency, or simplify the sector supplements?
Live from Amsterdam, the news is in. At least a little bit of it. It looks like GRI is staggering their releases to keep everyone on their toes. Here’s the first little tidbit:
The G4 guidelines will include a greater focus on materiality. The clarifications should help companies to focus on the issues that are material (in the financial sense) to their companies. For example, an oil company’s report should probably include more information about its carbon footprint than its office recycling policy. And a clothing company would be remiss to skip pesky supply chain issues.
The goal of this shift to increased materiality will lead to shorter, more meaningful reports. Ernst Ligteringen, Chief Executive of GRI, hinted at these changes when we spoke way back in September. We’re pleased to hear they made the final cut. A greater focus on materiality should lead to less greenwashing and make it easier for stakeholders to review CSR reports.
A call for simplification and greater focus on materiality will also make it easier for new companies to get started with reporting. Said Christian Mouillon, Global Vice Chair – Assurance at Ernst & Young, “One of the key benefits of the new G4 Guidelines is their redefined focus on disclosure of material issues. This step will increase the transparency and value of sustainability reporting for stakeholders and provide a more accessible framework for organizations, particularly those who have not previously reported.”
GRI hopes that these changes will make the road to integrated reporting a bit smoother – as all material issues, be they social, environmental or financial, have a home in an integrated report.
The G4 will also include greater accessibility for new reporters and improved harmonization with other important frameworks, including the OECD MNE Guidelines, the United Nations Global Compact Principles, and the UN Guiding Principles on Business and Human Rights.
More details will be released as they become available.