Saturday, August 20, 2011

Reporting. How the GRI does it.

The GRI has published its fifth Sustainability Report covering the fiscal year July 2009 - June 2010. It's a departure from the join-the-dots indicator-by-indicator style reporting of previous reports (where the report used the GRI Index as a template and responses are number by number). Instead, this report actually has a (nice) title other than "Sustainability Report" and it has around 16 pages of narrative, 15 pages of GRI Index and 10 pages of Annex (a collection of data tables and a governance description). It is a self-declared not-externally-assured report at Application Level A.

This report is entitled "Paper, Planes and People", the "three things that are important to ongoing success of the GRI". (Ice-cream apparently is not essential for the GRI). GRI's consumption of all these "things" has been increasing as the organization has been growing and expanding in reach. 12 staff were added in fiscal 09/10 (30% more people) and 1,082 kg of paper (23% more than prior year). CO2 emissions resulting from air travel were 613 tonnes (double 2007/8 but a 13% reduction over prior year, excluding GRI conference -related travel).

For those of us who have an interest in the success of the GRI - organizational stakeholders, sustainability reporters, sustainability professionals etc - the GRI own report does provide some nice insights about the workings of the organization, a 52 strong staff based in Amsterdam. Clearly, GRI is conscious of its own direct sustainability footprint and is doing many of the right things to keep it in check. These include:
  • producing an annual sustainability report;
  • offsetting all GRI conference emissions;
  • increasing amount of recycled materials in communications to 92%;
  • use of Webex and Skype to avoid business travel;
  • staff commuting is via bicycle, bus, train or walking shoes;
  • diversity in hiring;
  • health and safety (ergonomics) benefits for employees;
  • etc.
The report is also includes details of GRI's financials for the year.

GRI's sustainability performance goals for 2010/2011 include offsetting business travel emissions, providing more precise and comparable data on energy consumption, sustainable procurement policy, finalizing the sustainability, environmental, diversity and human resources policies and improving sustainability performance management methodology. Improving gender balance on the Board is also stated as an aspiration.

This is all great and exactly what we could expect of an organization whose core message is sustainability and transparency. It's good to see GRI walking the talk in this way.

The real questions for me as I consider the GRI report is to what extent we, GRI Stakeholders, should be content with a  report about  direct impacts and outputs (the things that the GRI is saying, doing, using) versus a report about the outcomes the GRI can reasonably claim to have influenced. To what extent should we expect the GRI to be a model of reporting, delivering a balanced representation of its impacts and outcomes, as a showcase for all current and potential reporters of what can be done with the GRI Framework? Now, in fairness, the GRI published earlier this year a Year in Review report which covers the same timeframe and describes the activities of the GRI - the reach of the Reporting Framework and the way reports are used, with case studies and details of advocacy activities etc. To get the whole picture, you need to look at both reports. My thoughts below, about what I might have expected from the GRI GRI report, relate to both reports, as if they had been published as one.

Use of a Materiality Matrix: The important issues for an organization and its stakeholders should be reflected in a Materiality Matrix (as recommended in the GRI framework). In the GRI GRI Report, the material issues are listed as a set of 11 generic issues (such as "materials", "energy", "transport", "employment" etc) which were developed for the GRI report covering the year 2007. Once again, the GRI writes  "Following internal discussion, it was decided that the same issues remained material for GRI in this reporting period.". Ideally, one would expect some external stakeholder engagement in the determination of material issues.

Equally, material issues do change from year to year. Between 2007 and 2010 the world, and the business world, as well as the GRI itself, has changed quite signifcantly. The global financial crisis and pressures on sustainability budgets. The rise of social media. The development of online reporting. The stronger moves to integrated reporting with new organizations taking a new lead. The changes in local legislation relating to reporting in several countries. The publication and development of  ISO26000 and other sector codes and frameworks including the changes in the UN Global Compact reporting requirements. Geopolitical changes and the development of emerging economies. New pressures from investor groups. Personnel changes at the GRI. There are a whole host of issues which could be immediately tabled as issues important to the sustainability of the GRI as an organization and of importance to GRI stakeholders, beyond the direct impact of the GRI and how many kg of paper the organization recycles. I believe this should be reviewed more thoroughly for the next GRI Report.

A review of risks that the organization faces: This is required by Reporting Indicator 1.2 and the GRI claims to report this in full. However, the word risk does not appear in the GRI report with the exception of the GRI Index. Disclosure of the risks the organization faces should be part of sustainability reporting. This might include: Reputation risks, Funding risks, Lack of increased reporting uptake risks, Travel risks, Currency Risks, People, paper and planes risks, Climate change risks, Ice cream overdose risks (Ok, that one may only apply to my business).  

Commentary on the number of GRI-based reports published: This is the top-of-mind hard measure that reflects the outcome of GRI activity. The GRI downloadable reports list shows 1,121 GRI-based reports published in 2008, 1,519 in 2009 and 1,865 in 2010. This represents substantial growth and expansion of GRI influence. The GRI often claims that significantly more reports are influenced by or inspired by the GRI Framework, even if the GRI Index is not included and I believe this is true. Also, new reporters take some time to deliver first reports so there may be quite a number of new reports in the pipeline. Overall, so far, an estimated 6,000 reports are published annually, globally, so the GRI share is still small, through growing at a faster rate than overall growth. Having said that, the real potential is with those tens of thousands of companies which are not yet reporting and the step change in reporting numbers has not advanced beyond relatively small incremental changes in the number of reports each year. The reach of reporting is covered to some degree in the Year in Review report which also contains some interesting perspectives about how reporting contributes to delivering improved performance and impacts on society. However, the deadline for the GRI's objective to have every large and medium sized company in OECD countries required to report on sustainability performance by 2015 is looming dangerously close.

Commentary on the quality of GRI-based reports published: I have, of course mentioned report quality before. It fact, it's sort of a mantra. The GRI's Mission is "To make sustainability reporting standard practice by providing guidance and support to organizations." This doesn't refer to quality, so maybe quality of reports is not an acceptable measure for the GRI. But can GRI really have no interest in the way the framework is used?  Is it just about pushing out reports or is it about creating a useful, comparable, decision-making-platform level of business transparency which also supports sustainability performance improvement? If it's the latter, some commentary about GRI approach to reporting quality and use (and abuse) of the guidelines might be appropriate.

Assurance: Assurance is part of the credibility process of transparency. Even limited assurance is a stepping stone. GRI doesn't assure its report due to "budgetary constraints". However, limited assurance by a stakeholder panel, which I am sure GRI would have no trouble in organizing, would not have to cost so much money, if any. I am sure there are many who would do this pro bono.  For GRI, this, I feel, is more about demonstrating a commitment to assurance rather than about actual verification of the numbers, which are not overly complex or significant in a small organization. GRI does say it aims to use assurance for the next report. 

Report publication timing: My personal view is that a reasonable timing for the publication of an annual Sustainability Report is up to six months after the end of the reporting period. For a small organization, where a global roll-up of data is not necessary (GRI includes only the Amsterdam hub and not other global Focal Points), this could be even quicker. Clearly, GRI is a very busy organization and achieves much with a small team. Reporting always needs resources, not only budgets, and in small organizations, this is probably the most difficult thing to allocate when facing a multitude of priorities. However, as reporting is the backbone of the GRI message, perhaps it could be managed in a more timely way in future. This GRI report is published in August 2011 for a reporting period ending in June 2010. 14 months.  

It does seem, however, that GRI is considering some changes to its reporting in future and has established an internal  Sustainability Management and Reporting Team (SMART). Things such as wider stakeholder consultation and assurance as mentioned above appear to be on the SMART to-do list. Perhaps some of the points I mention above might also become agenda items for the SMART discussions. In the current report, CEO Ernst Ligteringen states: "GRI’s biggest impact is helping more organizations to report and thereby help change their sustainability performance." As a GRI Organizational Stakeholder, and reasonably seasoned reporter, I make no apologies for hoping that GRI will to aspire to exemplary reporting. OK. Just one small apology. Sorry!

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices Contact me via  on Twitter or via my business website  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)


Marjolein Baghuis said...

The online discussion about GRI’s most recent sustainability report has been extremely interesting and informative. GRI’s mission is to mainstream sustainability reporting and, as Elaine Cohen rightly points out, others would expect GRI’s own reports to set an example.

Work is already under way on the 2010/11 report, and processes are in place to achieve the goals set out in this year’s report. GRI has conducted a robust stakeholder engagement in 2011 and this will drive the themes for next year’s report. GRI will also use the new G3.1 Guidelines and the NGO Sector Supplement released late last year. The Supplement focuses on specific issues for non-governmental organizations such as program effectiveness, public awareness and advocacy. As highlighted by reviewers, GRI’s biggest sustainability impact is its guidance. The next report will therefore emphasize program effectiveness, as GRI examines how well it achieves its mission. Finally GRI aims to have the next sustainability report externally assured.

GRI is grateful to those who take the time to read its reports and welcomes feedback, which is used to improve future reports as GRI strives for better, more engaging reporting.

Marjolein Baghuis, Global Reporting Initiative

elaine said...

Thanks Marjolein for your clarifications. Looking forward to next years's report!

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