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Key Changes in Global Reporting Initiative’s G4

ISOS Group
| Wednesday August 14th, 2013 | 1 Comment

 

G4 DevelopmentsPrevious iterations of the Global Reporting Initiative’s standards have been all-inclusive, encouraging reporters to report widely on their environmental, social and governance issues.  Some critics of the G3.1 and G3 standards complained that they rewarded breadth over depth by categorizing reports into three levels (A, B and C) – with the “best grade” given to the reports with the biggest scope. 

G4 represents a big shift in the standard – away from “put it all out there” to “less is more” – so long as what gets reported is material to the organization. The new standards ask reporters to use the sustainability report to document what really matters- a big shift away from reporting on everything the company monitors.

First things first. The G4 is split into two complementary documents: a manual consisting of the principles and standard disclosures themselves and a separate implementation manual to help reporters make their way through the process. The second document details the necessary steps a reporter needs to take to launch and manage a sustainability reporting process within any organization, regardless of their level of experience. The first document offers flexibility for preparers to choose which disclosures to focus on and how to align efforts to local/regional report requirements and frameworks. In addition, new clarifications on how to report on shared supply chain impacts outside of operational control will hopefully support organizations in taking additional responsibility for supply chain sustainability and governance.

Here are the key changes reporters need to know about from G4: 

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Key Changes in Global Reporting Initiative’s G4

ISOS Group
| Wednesday May 29th, 2013 | 0 Comments

This is the final post in our series on the countdown to the G4.

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G4 DevelopmentsPrevious iterations of the Global Reporting Initiative’s standards have been all-inclusive, encouraging reporters to report widely on their environmental, social and governance issues.  Some critics of the G3.1 and G3 standards complained that they rewarded breadth over depth by categorizing reports into three levels (A, B and C) – with the “best grade” given to the reports with the biggest scope. 

G4 represents a big shift in the standard – away from “put it all out there” to “less is more” – so long as what gets reported is material to the organization. The new standards ask reporters to use the sustainability report to document what really matters- a big shift away from reporting on everything the company monitors.

First things first. The G4 is split into two complementary documents: a manual consisting of the principles and standard disclosures themselves and a separate implementation manual to help reporters make their way through the process. The second document details the necessary steps a reporter needs to take to launch and manage a sustainability reporting process within any organization, regardless of their level of experience. The first document offers flexibility for preparers to choose which disclosures to focus on and how to align efforts to local/regional report requirements and frameworks. In addition, new clarifications on how to report on shared supply chain impacts outside of operational control will hopefully support organizations in taking additional responsibility for supply chain sustainability and governance.

Here are the key changes reporters need to know about from G4: 

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U.S. Companies Drag Their Feet on UN Global Compact

ISOS Group
| Friday May 24th, 2013 | 0 Comments

[Ed. note: The Global Reporting Initiative and UNGC announced a new commitment to partner today, with the hopes of alleviating some of the challenges referenced in this article]

feetBy Cristina Garza

Since its launch in July 2000, the UN Global Compact (UNGC) has grown to more than 10,000 participants from 145 countries. Its current base of more than 7,000 signatory businesses, as of October 2012, makes it the largest transnational organization in the world. However, it lacks the power to globally convene and influence relevant social actors including companies, governments, labor, and civil society organizations, especially in the U.S., despite the fact that it specifically seeks to influence these parties.

The number of U.S. companies adhering to the UN´s call for corporate responsibility is noticeably behind the total number of signatories of other nations. This is even more evident in relative terms, when we consider the percentage of signatories out of the total number of a country’s companies. Why are U.S. companies not compelled to participate? Do they not perceive value in adhering to the Global Compact?

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GRI’s Alignment with the Integrated Reporting Standard

ISOS Group
| Tuesday May 14th, 2013 | 0 Comments
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By Nancy Mancilla

ISOS’ Perspectives on the G4 as the World Waits

During our GRI Certified Sustainability Reporting Trainings, we often hear questions regarding “competing standards” and what the future of reporting will be like for many in the U.S. Two of the most prevalent developments are related to the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC). In this article, we’ll take a closer look at how GRI is approaching the Integrated Reporting Framework shepherded by the IIRC.

The current definition of “integrated reporting” according to the IIRC, is “a process that results in communication, most visibly a periodic ‘integrated report’ about value creation over time. An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects lead to the creation of value over the short, medium and long term.” Essentially, the goal is to promote “integrated thinking” in a manner that tells the “corporate story” for investors on how financial and non-financial reporting line up and how true performance is determined by equating all features of day-to-day operations.

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Rolling Out the New GRI Framework: G4 Sector Supplements

ISOS Group
| Tuesday May 7th, 2013 | 1 Comment
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By Nancy Mancilla

Over the years, Global Reporting Initiative’s (GRI) Sector Supplements have aided in providing more specific guidance to organizations who may find the GRI Guidelines too general for the challenges faced on a daily basis. As there are many core performance indicators from the standard guidelines that have been modified to reflect shared sectoral issues, there are also completely individualized KPIs that are to be used in conjunction with the larger set of guidelines.

Current supplements include those established for Airport Operators, Construction & Real Estate, Event Organizers, Electric Utilities, Financial Services, Food Processing, Media, Mining & Minerals, NGOs, and Oil & Gas. Pilot versions developed prior to the G3.1 Guidelines include Automotive, Logistics & Transportation, Public Agencies, Telecommunications, and Apparel & Footwear.  These documents present much more definition than the G3.1 alone can provide, which could really strengthen reporting efforts – unfortunately, they haven’t been utilized enough.

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What About Those DMAs? Perspectives on the G4 as the World Waits

ISOS Group
| Wednesday May 1st, 2013 | 0 Comments
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By Nancy Mancilla

Though we often struggle with interpretive guidance of the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines, we can easily say that overall, the world has done a fairly good job of embracing the majority of the protocol. Nevertheless, there are a few gray areas that reporting organizations continue to struggle with. Out of the 590 submissions (not representing actual participant numbers) during the G4 development public commentary period some of the highest concerns were related to the following:

  • General Questions/ External References: 394
  • Application Levels: 394 
  • Boundary: 335
  • Disclosure on Management Approach: 317
  • Governance and Remuneration: 336
  • Supply Chain: 370

Accordingly, these are just some of the issues where multi-stakeholder development committees focused a great deal of attention over the last few years.

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GRI G4: Are We No Longer Striving For An “A”?

ISOS Group
| Monday April 22nd, 2013 | 0 Comments
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By Nancy Mancilla
The GRI application levels - analogous to our scholastic grading system in the United States – may finally be getting an overhaul. When introduced with the G3 Guidelines in 2006, the goal was to bring sustainability reporting organizations into transparency slowly and incrementally by designating a minimum number of disclosures to be addressed. Unfortunately, we couldn’t help but to think that we were to achieve excellence by immediately striving for an A+. In fact, many reporting organizations would completely confuse the level applications and its system of checks with the quality of the report or how well an organization was actually doing. This left us all in the gray, questioning how valuable an “A” really was, especially when the requirement was to address each indicator though data might not be available, it wasn’t relevant, nor was it really fully contemplated organizationally.

It’s important to remember, the Global Reporting Initiative is a non-profit organization with the goal of building transparency globally. In serving the world, they probably did consider that the whole world doesn’t use the A, B, C system that we commonly associate with our formative years. They probably didn’t expect sustainability reporting to take hold so quickly in the U.S. and for these letters to stimulate such concern. So what would be the appropriate system? Wouldn’t it be easier if we just ranked depth using 1, 2 or 3? Sadly, that may then cause the Europeans to share in our sentiment as they have spent their adolescence striving for a 1. What about a color-coding approach similar to LEED? Do different colors represent conflicting sentiments throughout the world?

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How the GRI Framework Improves Supply Chain Efficiencies

ISOS Group
| Tuesday February 12th, 2013 | 0 Comments

chainWant to learn more about GRI? Consider a course in a city near you!

By Nancy Mancilla

Ten years ago, supply chain activity was a function of the logistics department. It has since come to the forefront of decision making across many groups at all types of organizations. Socio-economic conditions, civil unrest and climate change risks are just a few issues that cause interconnected organizations to grapple with complex questions, particularly when revenue-generating sources are at risk. Fundamental concepts of Economics 101 have taught us that supply and demand are the backbone of market economics.

What happens when the allocation and even disparity of resources threatens the delivery of products we are basing our markets on? How do we maintain and prepare for a sustainable competitive advantage to lead through the next 100 years? Have we even thought that far ahead in our projections and strategic planning processes? We can be sure that these questions are ever increasingly shared by key decision makers across organizations who are charged with ensuring business continuity, as well as their shareholders and stakeholders.

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Is GRI Losing Traction?

ISOS Group
| Thursday February 7th, 2013 | 0 Comments

gri reportingBy Nancy Mancilla & Cristina Garza 

The tension between the array of voluntary standards, protocols and frameworks for sustainability, along with uneasiness stemming from unknown changes of the GRI G4 Framework, makes us question whether GRI will still have the same muscle it has had in recent years.

Within the context of the VerdeExchange conference held this week in Los Angeles, it was interesting to take a look at the role that public agencies have been taking regarding sustainability reporting as opposed to the corporate perspective we are more accustomed to.

Despite the numerous reporting frameworks across the world, preference still seems to incline towards the GRI framework given its integrative reporting qualities and the transparency capacity that it provides.

Sustainability includes an immensely wide range of sectors and areas of analysis. When talking about sustainability in this country, many people focus on energy or greenhouse gas tracking and reduction.  New areas of focus are coming into play, such as investing and shared value, but there is a lot more to sustainability.

As mentioned by GRI’s Mike Wallace, sustainability is about a triple bottom line: it is about people, planet and profit. “This framework didn’t just appear overnight – it is something that has been developed by multi-stakeholder groups the world over – it has been tested and proven to be a great guide for better communicating sustainability performance across sectors.”

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GRI Reporting in Public Agencies

ISOS Group
| Tuesday January 15th, 2013 | 0 Comments

ISOSBy Nancy Mancilla

While conducting the GRI Certified Sustainability Reporting trainings, ISOS Group has had the great fortune of meeting sustainability champions all across the U.S. When we first started down this path four years ago, we found that the GRI Framework was largely embraced by multinational corporations headquartered on American soil. Though that is no longer the case, we continue to receive questions about the breadth of application.

In addition to a wide array of corporations, we have started to see an uptick in solely domestic enterprises, including small- to medium-sized businesses, academic institutions, public agencies within the federal sphere, state agencies and, more recently, even municipalities. Therefore, our answer is always, “Yes, GRI is applicable to organizations of all sizes and the flexibility of the framework allows organizations to tell their story and describe what exactly sustainability means for them.”

In thinking about the stories shared during our courses in 2012, one thing seems clear – we are witnessing a paradigm shift before our very eyes and it’s our belief that the story of the public agency that could, will surface much more readily over the coming year.

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Quality vs Fluff: Building Blocks for GRI Report Assessments

ISOS Group
| Thursday August 25th, 2011 | 0 Comments

Ed Note: Check out a 3p sponsored GRI Certified Training course in Sustainability Reporting to get trained by the author of this post

By: Nancy Mancilla, ISOS Group

To build on last week’s posting, “Using GRI to Compare Apples to Apples in Sustainability Reporting”, we’d like to help you distinguish quality GRI reports from those that would probably be best served as marketing pieces.

As the number of companies taking the sustainability plunge rises, so do the myriad organizations conducting ratings and rankings.  Unfortunately, the rigor of these ratings tends to confuse reporters who wonder what exactly they should be reporting on. One thing is clear- it is generally the Sustainability/CSR report that provides the bulk of data used as a basis for analysts’ decisions.

We believe that heavy analysis should first be focused on the sustainability reporting process taken to produce the report, and only later on the activities of the company. With firm policies and procedures in place, actions will be much more robust. Without proper application of a proven reporting framework, the strategic direction of an entity’s sustainability activities may suffer.  Proper application of the Global Reporting Initiative’s methodology for reporting is intended to clear the path and provide the much needed focus. Therefore, our approach for assessing the quality of reports is based on the principles laid out by the GRI- now G3.1 Guidelines.

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Using GRI to Compare Apples to Apples in Sustainability Reporting

ISOS Group
| Tuesday August 16th, 2011 | 1 Comment

Ed Note: Check out a 3p sponsored GRI certification in Sustainability Reporting to get trained by the author of this post

By: Nancy Mancilla, ISOS Group

It will not come as news to 3p readers that social and environmental issues can have a short and long term impact on the financial performance of a company. But, objectively measuring a company’s sustainability performance is easier said than done.

Sustainability reports are as different as each of us. They vary in format, material issues selected, boundary and scope, and cultural orientation which makes it very difficult to judge performance based on a common set of indicators.

Investment institutions like Bloomberg, the Dow Jones Sustainability Index or FTSE4Good have some of the more widely recognized methods of reviewing corporate sustainability. But they aren’t the only companies in the game.

Groups like CSRHub and Sustainability HQ have a deep knowledge of sustainability principals. They have successfully developed systems that make it possible to query a full range of sustainability data and share it with a broad audience. CSRHub Cofounder Cynthia Figge says, “We aggregate data from more than 100 sources to provide our users with a comprehensive source of CSR information on nearly 5,000 publicly traded companies in 65 countries.”

ISOS Group has capitalized on the standardization of the GRI reporting framework to create another measurement system.

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How Balanced Are CSR Reports?

ISOS Group
| Tuesday May 18th, 2010 | 3 Comments

By Nancy Mancilla & Alexandru Georgescu of ISOS Group

As GRI’s Certified Training Partners in the U.S., we have become connoisseurs of fine reporting and somewhat critical of lavish attempts to build credibility by what we feel is blatant greenwashing. Through all the reports we have read, we have rarely found that

» all the basic components for a quality CSR report were easily identifiable, nor that
» all social, economic and environmental activities were presented in a balanced manner.

The above issues pose a number of questions regarding the validity of reporting processes. Hence the two-pronged approach we administer at the end of all of our GRI Certified Sustainability Reporting events. Our assessment has been designed to identify GRI’s content and quality principles through what is communicated in the report, and secondly to match actions with an integrated list of sustainability criterion summarized from a number of scorecards, indexes and standards. As with all score sheet methodologies, reviewers assign a certain number of points to each criterion with the possibility of achieving an accumulated score of 100 from all three categories: Economic, Society & Human Rights, and the Environment.

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