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Two GRI G4 Reports Under the Microscope

3p Contributor | Tuesday October 8th, 2013 | 0 Comments

microscopeA version of this piece was originally published on the CSR Reporting Blog.

By Elaine Cohen 

While more and more companies have been releasing initial reports they are billing as GRI G4 reports,  as you will see, early life in the era of G4 is not so straightforward.

The Singapore Exchange (SGX) has published a 165 page annual report which includes 11 pages which are defined as the “Sustainability Report.” These 11 pages include sections on materiality, governance, and social and environmental impacts. Needless to say, it’s a very compact Sustainability Report! Despite its brevity, it does include a description of the stakeholder engagement process and a matrix of material issues, of which there are 11, the most significant one being “economic performance.”

In the introduction to the “Sustainability Report” section of the Annual Report, SGX believes their report is in accordance with G4 at CORE level. Hmm. I believe differently.

First, the report contains no GRI G4 Content Index. Second, the G4 indicators selected do not correspond with the material Aspects listed in the materiality matrix. Regarding economic performance, for example, the top material Aspect, none of the EC indicators are reported. Therefore this report qualifies as a G4-Referenced report, and not a G4 In Accordance report. But, it’s en route, and that’s good!

I will add that there is something that impressed me at least as much as SGX’s reporting efforts, and that’s their responsiveness. I wrote to ask about the missing G4 Content Index, and got a very rapid response, with a copy of the Content Index sent to me by email, and advice that SGX intends to publish this on the company website by end September. I was really appreciative of their response, as I write to many companies and it’s like shooting paintballs into Niagara Falls, sometimes. icecream5With SGX, the response was fast, clear and gracious. A personal one-scoop CSR Reporting cone is in order for Darrell Lim Chee Lek at SGX.

 

Drumroll for a G4 Report
By now, you might be doubting the possibility that any company ever might deliver a real G4 report. However, there is light at the end of the tunnel, and next up is a report which has secured my admiration and even a three-scoop supercone – the height of CSR Reporting Blog praise!

Environment Park s.p.a was founded in 1996 by the Piedmont Region, the Province of Turin, the City of Turin and the European Union and is an original type of science and technology park in Europe, combining technological innovation and eco-efficiency. Environment Park is divided into two business units, one dedicated to the management of the real estate and the other to “research and innovation.” The park boasts green architecture and many environmentally friendly features and is run by a compact team of 45 employees. This is the fourth annual sustainability report and claims to be in accordance with the G4 guidelines at CORE level. Oh, and I almost forgot to mention, this report is in Italian, but with a little gelati and Google Translate, I won’t let that bother me. Ice cream is the same in any language.

Environment Park has delivered a very nice G4 Content Index. It’s prepared in accordance with the guidelines, and appears to me to be technically correct. Environment Park has selected 14 material Aspects from the G4 material Aspect table in 5 categories and has reported on a total of 24 Specific Standard Disclosures, almost half of which are environmental disclosures. At 76 pages, the report is manageable and only a tad longer than the previous GRI G3 Application Level B report of 2011 at 64 pages. As for material issues, these are prominently placed on page 5 of the report, set out in a chart which identifies each issue, whether the impact is internal or external to the organization, and how it was prioritized relative to other topics that were identified using the G4 recommended dual measure of size of impact and stakeholder relevance. This is about as technically accurate as it gets. Using the Content Index, it is a pleasure to navigate to the disclosures relating to each of these material Aspects.

envirmentparkmatiss12

I have not read the report in detail (Google Translate is not that brilliant) so I cannot comment on the quality of disclosure, and I also won’t comment on the relevance, from my perspective, of the material issues selected. My microscopic focus in this post is the way the G4 framework has been applied, and it seems to me that this is the first corporate G4 report I have come across that makes the grade. Supercones all round at the Environment Park.

There is also something subtly intelligent about the way Environment Park has transitioned into G4. The 2011 report covered exactly 20 indicators required for Application Level B, which makes the 2012 G4 report not significantly more challenging with 24 Specific Standard Disclosures (performance indicators), plus 2 more if you add in the ones that are part of the General (profile and management) Standard Disclosures. Let’s call this 26. Of these 26, exactly 13 indicators reported in 2012 correspond with those reported in 2011, demonstrating a good deal of continuity. The additional indicators added are mainly in the environment category, such as intensity measures for energy and emissions, which were not reported in 2011.

Now, having said this, I have an additional quick observation about the Environment Park report. The fact that it is technically correct, in my opinion, as far as the G4 framework is concerned, is fantastic. However, G4 reporting is not just about observing the reporting framework in a mechanical way. There’s more to it than just the technicalities. The G4 report of Environment Park has exactly the same structure as the G3 report – same sections and same headings (with the exception of the addition of the materiality matrix). The report is not written around the impacts, it’s written around the framework. That makes it G4, but less compelling for report users/readers. The big issues that Environment Park addresses are there, but they could be used to structure the report in a way which makes this organization’s transformative role in business and society come to life in a more meaningful way for report readers. There are no internal or external commentaries, and as far as I can tell, no stories or case studies which illustrate in a more exciting way the true role and impact of Environment Park. Reporting at its best, in my view, is a story within a framework. Environment Park excels at the framework. It would be nice to have a little more story. (Disclaimer: I don’t speak Italian. My comments are based on a general impression. I hope this is not misrepresentative. Supercones still relevant. ).

Summing up

G4 reporting is now evolving and I hope I will be able to keep pace with the anticipated flurry of new G4 reports. So far, of all the G4 claims that are flying around, not many are actually making the grade. The Global Reporting Initiative has not yet pronounced on its intention to develop a G4 Check, similar to the G3 Application Level Check. This decision was promised for September, so maybe we will hear some time soon. It seems to me that this is really critical. What’s the point of having a wonderful framework if companies are misusing it by default or by design? I realize reporting is a journey, but saying we are going to Manchester and ending up in Honolulu doesn’t help anyone, even if Honolulu is quite a nice place (Is it? I have never been.) Companies need help in applying the G4 framework accurately, that’s my takeout. Understanding G4, my book, provides concise guidance. GRI may also be offering customized assistance to individual companies as they start to use the framework. But this is no substitute for a quality check on whether the output is as declared. I feel we have to start finding a better balance between quantity and quality of reports, and, in my view, GRI should play a pivotal role.
Oh, and by the way (how subtle), there is still time to  register here (send me an email or DM me on Twitter for a discount code) for the first Understanding G4 Master Class in London on 22 October. On the agenda:
  • Face Materiality with Confidence: Understand the value of materiality and the way it drives G4 reports, grapple with the complexity of selecting material issues and learn how to shape your report around material content.
  • Disclose with Relevance: Prepare meaningful management approach disclosures and select relevant performance disclosures for (CORE) G4 reports.
  • Get the Basics Right: Understand the less obvious challenges in G4 Standard Disclosures and how to deal with them.
  • Make a Plan: Understand how to prepare your first report as a G4 report or make the transition from G3 to G4; select CORE and COMPREHENSIVE options; get the balance of content right for your organization and align content with creativity.
  • Ice Cream: G4 tastes better with ice-cream!
Elaine Cohen is a CSR Consultant and Sustainability Reporter, founder/manager of Beyond Business Ltd and author of the CSR Reporting Blog

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