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G4 Sustainability Reporting: It’s All in the Preparation

Words by 3p Contributor
Investment & Markets

By Graham Sprigg

The aim of the GRI reporting guidelines is to provide a framework enabling organizations to transparently disclose their social, economic, environmental and governance performance. This disclosure can help to build stakeholder trust and instill more credibility and consistency across reporting. If done well, sustainability reporting, rather than being an exercise in box-ticking, can support business strategy and provide an effective way to build ongoing dialogue with key stakeholders.

So, with this in mind, what do the new guidelines require of businesses that want to be GRI indexed? The main principles on which the guidelines are built remain much the same – stakeholder inclusiveness, sustainability context, materiality, comparability, accuracy and so on. However, this time, greater emphasis is placed on materiality.

G4 sets out a clear process for determining material issues and requires that organizations disclose a full list of the identified and prioritized issues and topics. This process consists of four steps - identification, prioritization, validation and review. Without discussing each step in too much detail, this process of determining materiality is entirely reliant on effective, meaningful and informative stakeholder engagement.

While the practice of engaging with stakeholders isn’t new to sustainability reporting, the updated GRI guidelines call for better analysis of findings and their transparent reporting. In our experience at IMS Consulting, one of the most effective ways of building genuine, ongoing two-way dialogue with your stakeholders is using online tools. For example, developing an online survey with skip logic formatting will intelligently gather feedback from target audiences, while discussion forums will allow your stakeholders to voice their views and connect with each other.

Although there is still great value in offline engagement techniques such as face-to-face meetings and telephone interviews, online tools can offer several advantages over these traditional routes. Engaging with your stakeholders online can be more time-efficient, particularly where a large number of stakeholders are concerned, as well as being more cost-effective. It also makes measuring the outcome of your engagement much simpler because it can gather both quantitative and qualitative data and feedback. This is especially useful for developing materiality matrices as part of your sustainability reporting.

So, how do you build an engagement program that will help to inform your materiality matrix and establish ongoing relationships with your key stakeholder groups? We believe that, unless there are particular reasons to conduct personal meetings and interviews, online is the most effective route. By combining web-based delivery with intuitive features, toolkits such as StakeholderTALK™ can be rapidly deployed, are more appealing for those with limited time or mobility and meet stakeholders in their own environment. In more contentious matters, the confidentiality that can be offered will also help to elicit more honest responses. For the business, online tools mean that the feedback and data gathered can be analysed and presented in various formats to meet the needs of different departments. For example, they can provide detailed data splits by stakeholder group or question combinations.

A good sustainability report will be relevant and strategic, meeting the information needs of the business’ key audiences. This means that it’s not enough to engage for the sake of it; the feedback from your stakeholders must shape your report by informing the prioritization of material issues. Although many organizations have been engaging with their stakeholders and producing materiality matrices, unfortunately the outcome often doesn’t reflect these efforts. It is too frequently the case that the report content doesn’t align with the issues listed in the matrix.

Although the G4 guidelines include several other changes that aim to improve the practice of sustainability reporting, the stricter requirements on materiality put the issues of relevance and transparency into the spotlight. In order to ensure their reports meet the needs of stakeholders and provide them with meaningful information, businesses must first understand what these groups consider to be material. By building effective engagement that helps to determine materiality, sustainability reports can become powerful tools for both strategy development and communication.


Author: Graham Sprigg, director at IMS Consulting For over 20 years IMS Consulting has specialised in helping clients unlock their sustainable potential throughout their strategy, engagement and communications. Founder of StakeholderTALK™, the complete online engagement and communications toolkit, IMS is experienced in engaging with a wide range of stakeholders to inform sustainability reporting. It has delivered sustainability reports for leading companies, including Skanska AB, Morgan Sindall Group, Saint-Gobain and Jewson. As a CDP Accredited Provider, IMS Consulting’s engagement and communication platforms are used by British Land, the Green Construction Board and British Water. www.imsplc.com

[Image credit: IMS Consulting, www.imsplc.com]

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