Friday, July 29, 2011

Sustainability Reporting with Integrity

I have been involved in the writing of many Sustainability Reports. In fact, it's one of the main services I provide to clients and something I spend a whole lot of my time doing. Several of the reports I have worked on have gone through the GRI Application Check (including the report of my own company, Beyond Business Ltd). This week, I received the results of the GRI check of the fourth report I have submitted this year, 2011, one being our own and the other three for clients (reports not yet published).

Now, here's my conclusion.

It's always worth submitting a draft report for the GRI Application Check.

Despite the fact that the GRI check is limited and does not cover EVERYTHING that's reported, what is does cover is very thorough. As experienced as I think I am in working strictly to the letter of the GRI framework, which I think I know very well indeed, there is occasionally something, no matter how minor, that I overlook. The GRI check really does help me in ensuring that I support my clients in delivering a report with integrity i.e. if it says it meets Application Level A, B or C, it does. Even reports which are externally assured are often not rigorously checked for adherence to the declared Application Level.

Using the GRI Reporting Framework is a choice. It is perfectly acceptable (though, arguably, not leading edge) for any company to write a Sustainability Report without adhering to the GRI or any other guidelines that may exist. It is perfectly acceptable to go with your own sustainability reporting flow and just do it your own way. However, if a company chooses to report using the GRI guidelines, then my expectation is that they will adhere to the guidelines right down to the fine detail of the indicator and the indicator protocols. For me, the credibility of a reporting company really drops when the company declares adherence to a GRI Application Level, and after even the most briefest of checks, it is apparent that the company has not met the requirements.

I see this as a question of professionalism, thoroughness and yes, integrity.

In order to earn the prestige / reputation / goodwill benefits associated with GRI Reporting,  many companies rush to self-declare adherence to the GRI at some level or other but don't follow through with the rigor and discipline required. As we say in Manchester, ignorantia juris non excusat. This means that you cannot claim not to understand the guidelines - everything is perfectly clear and if it is not, my experience of the GRI is that any question gets a response within 24 hours. So not adhering correctly to the GRI guidelines (after making a declaration to the contrary)  is either a question of genuine misunderstanding, minor oversight, generally sloppy work or intent to deceive. Harsh ? Maybe. But that's exactly why the GRI check is available.

What does the GRI actually check?

The GRI Content Index is checked for completeness, correctness and usability. This means that the GRI checks whether the completed GRI Content Index in the draft report answers the required number and set of standard disclosures for the self-declared Application Level (completeness); that the way in which the reporting (or not reporting) has been addressed is in-line with the self-declared Application Level and accepted standards (correctness); and that the Index serves as a functioning navigation tool (usability) including whether page reference numbers are correct.

GRI checks a sample of the standard disclosures. GRI takes a sample of the standard disclosures and determines whether the reporting claims made in the Index can be substantiated. For this purpose, the GRI checks the text to see if a quantitative standard disclosure has been answered with a pertinent quantitative response and a qualitative standard disclosure has been answered with a pertinent qualitative response. You cannot know upfront which of the disclosures the GRI will actually check, so as a reporter, you must make sure that all the disclosures required for your declared Application Level are reported correctly.

The Content Index Check List is a very good tool for reporters, breaking down the reporting requirements by indicator into precise reporting requirements and the type of response required (quantitative, qualitative).

Reporting inconsistencies from my own experience

Some of the things I get pulled up for are quite minor. I had to laugh when I wrote in my own A level Sustainability Report that one person out of a team of four left the business during the reporting year. The indicator, LA2, requires a percentage as well as a number. I had to correct that disclosure to "one person (25%) of our workforce left the business".  In a micro-enterprise like mine, the percentage is rather insignificant. But take a company of several hundreds or thousands of people which you want to benchmark for turnover against peer companies. The percentage of employee turnover, not the number,  is what makes the data comparable. In another report, I wrote that the reporting company sources all electricity from the National Grid (Indicator EN4). Not enough. I had to add the details of the primary sources of energy for electricity production used by the National Grid. Another example relates to the scale of the reporting company. I had not included market capitalization. (Indicator 2.8). Tougher examples might include detailed disclosure of stakeholder engagement practices. This is tougher because, while companies want to report, they may not have documented effectively all of their internal and external processes relating to stakeholder engagement. (Indicators 4.14-4.17), especially if this is a first time report. Sometimes, an oversight may just be a matter of not indicating the correct page number for the relevant content in the body of the report.

Adding punch for consultants

I also find that, as a consultant writing reports for companies and advising them on content, the GRI check helps bring certain issues to a head. Companies often anguish over what to disclose and what not to disclose, or whether it's worth making the effort to supply certain content. I would rather not count the amount of times I have successfully used the line: "This is required for GRI Application Level B" or " If you don't provide this data, we will not be able to pass the GRI Application Level check". For companies for whom the GRI check is important, either because it helps create internal legitimacy or external standing, it works every time, thereby helping to increase the real transparency (and not only the declared transparency) of any report.

And finally....

The GRI Application Level check is not assurance and it not exhaustive. But knowing that an external body is going to check your adherence to the guidelines does make for a heightened degree of discipline. When writing a Sustainability Report, there is always a lot to think about and it's always a rush to get it all done at the end of the process. It's easy to miss minor details. It's easy to forget that you needed to go back and check that last point. It's easy to overlook that the pagination changed when you added a few extra sentences.

Reporting with Integrity is not just about reflecting your sustainability performance in an accurate and balanced way. Reporting with Integrity is also about being true to your word. If your word is that you have adhered to the GRI Framework at Application Level B, then I expect to see that you have done that.

I would add at this point that I believe there is room for a revision of the GRI checking system. I think the GRI should offer a check which includes the entire content of the GRI Index, and not a sample check. Assuming that the A, B, C or some other type of transparency differentiator will be adopted in the new G4  guidelines, I believe the GRI should also offer a solution to ensure that declared adherence is correct in a more comprehensive way.  This will enhance the credibility of the reporting companies and also in the guidelines themselves. Who cares if that will make my life so much more difficult :)

The GRI did not ask me to write this post! I am a GRI Organizational Stakeholder but otherwise have no connection to report-checking other than professional interest in a more robust reporting system.

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)


UKati said...

Hi Elaine, I agree with most of the things you wrote about GRI aplication level check, but I also have some concerns. My greatest concern is, that they do not check the reporting principles... And I think if a company does not follow these principles, the report can be really useless both for the internal and external benefits. At least materiality, or if there is something about how the company has defined materiality would be important. This would be more important than making you add 25% after the one person leaving...

Also, when we come across reports, even A type reports, that have major GRI-related defficiencies, but they were approved by GRI, how am I supposed to argue for the principles and integrity of reporting... OK, I know that the more GRI reports there are, the better it is for GRI, but the quality of reports is not ensured, we will end up like the value of ISO9000 certifications...

elaine said...

Hi Kati, thanks for your comment and insights... yes, I agree... overall poor quality of reports poses a problem for the credibility of reporting as a whole ... but at least, if a report is out there, it is open to scrutiny.
You are right that reporting principles have a fundamental importance that frames the entire report credibility. Companies need to get better at this.

Hope you are doing well ...

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