Today saw the launch of the newest version of the GRI Reporting Framework: G4. For those of you who are interested in reading all 360 pages of the two-part framework (Part One = Principles and Part Two = Implementation Guide), you can download the lot here. I will be delving into more detail in coming posts, to help the CSR Reporting Blog readers (many of whom I was delighted to meet here in Amsterdam) navigate the detail, but for now, in the meantime, a very short update:
Core and Comprehensive
No longer will reporters be able to claim the highest GRI "accolade" of reporting at Application Level A+. Yes, Application Levels have been tossed into a canal somewhere in downtown Amsterdam. Instead, there are two new options for being "In Accordance" with G4. These are Core and Comprehensive. A quick translation, in the language we have become used to, is that Core is sort of C minus. Comprehensive is sort of A triple plus.
You have to consider Core and Comprehensive in the context of the reinforced emphasis on materiality. G4 says: first complete due process and define your material issues (GRI calls these Aspects). Then, disclose your general standard (profile) disclosures, and specific standard disclosures (management approach and performance indicators) only for those Material Aspects you have identified. This means, that a new G4 In Accordance Sustainability Report will consist of:
General Standard Disclosures
Specific Standard Disclosures for Material Aspects
Now, having understood that, this is where Core and Comprehensive comes in:
For General Standard Disclosures, there is no major difference in disclosure requirements at Core level:
As can be seen, at Core and Comprehensive are almost identical with three exceptions:
- Core doesn't need to report G4-2 (key risks and opportunities, like the G3 1.2),
- Core doesn't need to report G4-35 to G4-55 (governance disclosures, including most of the governance disclosures in G3)
- Core doesn't need to report G57-G58 (mechanisms for reporting ethical breaches)
For Specific Standard Disclosures, there is a major difference:
Spot it? For Core, at least one indicator per material aspect must be reported. At least ONE. That's it. If you have three material issues, you can take your pick of the indicators related to those material issues and report performance with one indicator each. If you have one material issue, you can report on just one performance indicator. For Comprehensive, you must report on the lot - all the performance indicators for the material aspects you selected.
Want an example? The Material Aspect covering Energy in G4 has 5 performance indicators.
As a Comprehensive reporter, you must disclose against all five indicators, if you have selected Energy as a Material Aspect. As a Core reporter, you can take your pick. In this case, therefore, as I understand it, as a Core reporter, it is quite possible that you have declared Energy as a Material Aspect, and have selected to disclose against G4-EN7 - reductions in energy requirements of products and services - and not against G4-EN3 - energy consumed within the organization.
Interesting? Sure! Fabulous? Not sure. Tomorrow (Thursday) at the G4 track of the GRI conference, there will be opportunities to hear more and debate the implications of Core and Comprehensive and the best of the rest of the changes in G4. I'll pick this up again in future posts.
During the conference today, I heard from most people I spoke to that the focus on materiality is welcome - the idea that a sustainability report should be about key impacts and not about all impacts is a good one, and most people like this. At another level, the requirement to disclose the process of selecting material issues is likely to be seen as challenging, because many companies today do not really have a structured process for this. At one level, some are welcoming the Core option as a sort of easy-way-in to G4 for new reporters, SME reporters or lazy reporters. Others are lamenting the lack of special acknowledgement for going the extra mile to become a Comprehensive reporter, which doesn't sound quite as sexy as being able to say "We got an A+". The plus, by the way, awarded for external assurance, will also disappear in G4. Instead, reporters are required to indicate in the GRI G4 Content Index whether specific disclosures have been externally assured or not. You can still be In Accordance if you disclose all your stuff without external assurance. No extra marks to be gained, just a warm fuzzy feeling that you went beyond minimum expectations.
After a very brief initial look, the new G4 documentation seems clear and well put together. A big improvement versus current G3 guidelines and much better than could have been anticipated from the Exposure Draft. G4 is clearly the result of masses of effort by the GRI team and governance bodies and many many others. Being at the GRI 2013 conference gives you a sense of the major scale of this development and the hopes that it brings. It's certainly an achievement, and for that alone, I believe GRI deserves our congratulations!
Watch this space for more updates and analysis of G4 over the next days, weeks, months and years. And for a lot more about related issues such as the relationship between sustainability reporting and integrated reporting, supply chain disclosures, value chain mapping, and other interesting insights that come up at the GRI 2013 conference, which by the way, numbers 1,600 delegates, making it a truly memorable event.
It was such a busy day that I didn't even get a chance to go for ice-cream. :(
elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen or via my business website www.b-yond.biz (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)