GRI Standards: Shape Up or Shape Out

The Exposure Draft of the new GRI Universal Standards looks quite innocuous at first glance. Seems to put things in order and chop out a bunch of irrelevant/irritating stuff. Puts them back together again in a fairly logical way. At first glance, it seems super-duper. Then you read the fine print and consider the changes that reporters will face and wonder if they are a help or a hindrance, and in some cases, why on earth they were even considered.

I was fortunate to be able to chat about the Universal Standards revision with long time architect of GRI Standards, and occasional sparring partner, Bastian Buck, Chief of Standards, probably the most knowledgeable person on the planet on the topic of sustainability reporting standards, and a most patient and attentive responder to all of my niggly questions and observations, and someone I always tremendously respect. Joining us was Laura Espinach, GRI’s Head of Technical Development, an experienced and accomplished GRI specialist who has been instrumental in standards revisions for over a decade and specifically in guiding the current proposed Universal Standards revision. Both took on the call of responding to 5 pages of questions and observations I had prepared for them on the new revisions. 

In a series of posts, I will be sharing their insights and my thoughts about the aspects of the revisions that seem to me to be the most meaningful. This is by no means an exhaustive review. I have been a little selective. As usual, my purpose is to help people (including myself) understand the GRI technobabble (which has become a little less techno over the years, even though there’s still a lot of babble), and also to encourage you to navigate the changes and provide your input to the Exposure Draft through the formal GRI survey. 

But first: the cheat sheet. What’s changed? 

Here’s a quick summary of the proposals: 

• New alignment of three Universal Standards: 101, 102 and 103 where: 
• 101: contains information about how to use the GRI Standards
• 102: contains disclosures about the reporting organization and
• 103: contains guidance and disclosures relating to material topics (and supplemented by Sector Standards and Topic Specific Standards, where applicable).  It’s sort of a revised, expanded Management Approach Disclosure standard.
• In Accordance options Core and Comprehensive have been shelved. Now it’s In Accordance only with an option to reference the Standards if you can’t go the Full Monty. 
• Human Rights have been elevated to become omnipresent in every part of the Standard, including in the definition of materiality. This is to compensate for the underreporting of human rights over the years, as companies have sidestepped key human rights disclosures for different reasons. 
• Materiality definition has been revised to re-emphasize the focus on impacts of the business on economies, environment and people – making it clearer that reporting is not about what’s affecting the business but rather what or whom the business affects. Oops! Get ready to revise that materiality matrix. Or even ditch it. 
• Governance disclosures have been revised and a full set of sustainability-related governance disclosures have become part of the mandatory requirements for compliance with the In Accordance option. For those companies who have not reported governance extensively, or who have referenced Annual Reports (often misleadingly, as the Annual Reports do not generally contain the specific aspects of governance important for sustainability reporting), this will require companies to buckle down and publish more relevant information on governance. 
• Sector Standards are now mandatory for In Accordance disclosures, even though none of them yet exist. But, as they are developed, companies in the relevant sectors will be required to use them for their reporting to be In Accordance. 

And some very specific changes you might miss if you speed-read the new proposals. 

• Alignment of reporting timelines is a new proposal (guidance, not required to be In Accordance), whereby companies are asked to align the sustainability reporting period with that of the annual report. Hmph. Nothing more useful than treating apples and oranges in exactly the same way. 
• CEO Statement of Use is a new requirement, asking the CEO (officially: the highest governance body or the most senior executive) to publicly confirm that the GRI Standards have been applied correctly. Seriously? I thought that’s what assurers were paid for. 
• Contact Point is now not contactable. The requirement to list a contact point for queries (currently General Disclosure 102-53) has been removed. Apparently, no one felt it was important. Clearly one of the main tools for stakeholder dialogue does not need to identify how to reach the people to dialogue with. 

And in addition there are some revisions to other existing disclosures and some tightening up of the reporting principles etc. 

All in all, quite a big job, meaning that when these new Universal Standards are approved and published, and enter into force (I guess that will be in 2022 - on average the transition period for GRI Standards revisions is 2 years), reporters will have a much reduced use for the copy-paste button. (Don’t you wish all keyboards had one of those? Specially for Sustainability Reports.)

But, before we delve into the changes in detail (in a series of subsequent posts), I wanted to share the views of the experts on the revision of the In Accordance rules. To remind you, in earlier GRI iterations, there was the A, B,C system, where A was more extensive disclosure and C covered the basics. A-level reporters puffed up their chests and issued glorious Press Releases while C-level reporters were relieved they were able to issue a Press Release at all. The misleading nature of this system led GRI to adopt the Core and Comprehensive differentiation with G4, which was actually very similar. The tiered system has not proven useful, as transparency for the sake of transparency was not adding value. Transparency must be relevant, which in GRI jargon is about the focus on material topics.

The new In Accordance framework requires the following:

• Applying the Reporting Principles (no need for proof of this – the report itself should be proof) 
• Reporting ALL the General Disclosures in Standard 102 (same as current but now there are more – specifically in the area of Governance)
• Identifying and listing material topics (using available Sector Standards) and reporting GRI 103 which is all about materiality (similar to the current Management Approach Disclosures)
• Reporting appropriate disclosures from the GRI Topic Standards that correspond to each the material topic – the operative word here being “appropriate”. Currently Core requires minimum of one indicator and Comprehensive requires all. With the new definition, companies must select the indicators that are relevant and report those. For example, no point in selecting the hazardous waste indicator if you do not generate any hazardous waste. Duh. But, if all the indicators are relevant for a particular material topic, then you cannot just select the easiest one to report as you might have done with the one-per-topic rule in the current Core option. As with the current system, if GRI does not have a ready-made indicator, you can make one yourself. Or draw on other existing standards and reporting guidelines 

I asked guru Bastian about the new In Accordance rules:

ME: With the removal of the Core and Comprehensive “In Accordance” options, how can companies signal that they have been “more transparent” than other companies? Is this not seen as important? 
BASTIAN: “I think there is a historical perspective to the decision to remove Core and Comprehensive. We have this history of trying to take everyone and everything with us as we move forward, and there was always a tiered system. But eventually we knew that we would have to consider having a clear threshold, and now is the right time to do that. First, this aligns with the approach of standards such as the IFRS and many others. Either you are or you are not. Reporters need to make a clear commitment to stakeholders on where they stand. Second, it was confusing. In many cases, companies published a Core report, but reported far beyond the minimum Core requirements - by declaring Core, they were not setting an accurate expectation for their report.”

ME: That sounds fine, but what about omissions. You can still be In Accordance while not reporting performance and simply stating omissions. How will that work?
BASTIAN: “We have revised the acceptable language for noting omissions and how to include them in the disclosure. Some degree of omission is always possible – it’s far better to say that you are not able to provide certain information and explain the challenges you face, and when you plan to report in the future, if relevant. This is why the feedback loop with stakeholders is so important. They should challenge companies on what they said they would report at a future date. In some cases, systems simply don’t exist to gather the relevant data, but if you commit to resolving this, then stakeholders should check that you follow through.”

ME: So where does In Accordance now sit? At Core or Comprehensive?
BASTIAN: “The fact is that In Accordance will always deliver a high level of transparency across a broad range of general disclosures and across material topics. Companies themselves define what is material and therefore what they report. But we have also retained the reference approach, so that companies can use certain disclosures from GRI Standards. This continues to be relevant for us as a global standard because of regulatory regimes across the global system – the reference approach continues to cater to regulators and reporters who require or recommend / disclose a narrower set of topics.”



I believe current Core reporters will find the new approach a little stretching. First, there are more general disclosures. Second, they will have to think more deeply about the topic-specific indicators they commit to reporting. But, that’s a good thing. Somewhere in GRI’s purpose is improving the quality of reporting, I think, and this means raising the bar and challenging companies as stakeholder expectations change.

So, that just about covers it for this post. And this is only the overview 😊. Brace yourself for more posts on the Universal Standards Exposure Draft if you are really keen to understand how these changes might affect your reporting. If you agree, disagree, or have any better ideas, take some time to provide your feedback in the GRI Survey between now and 9th September.

In the meantime, you had better stock up on ice cream.

Stay safe, stay well, stay optimistic!

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Owner/Manager of Beyond Business Ltd, an inspired Sustainability Strategy and Reporting firm having supported 107 client reports to date; author of three books and several chapters on Sustainability Reporting and the Human Resources connection to CSR; frequent chair and speaker at sustainability events and judge in several sustainability awards programs each year. Contact me via Twitter , LinkedIn or via Beyond Business