USA:9 first-time G4 reports

And here we are, in the U.S. Following my post on 16 first-time G4 reporters in Belgium, that may have been a surprise to some of you, here is a more modest collection of first-time G4 reporters coming out of the U.S. Here follows a selection of 9 U.S reports - all first time reports and all in accordance with G4 (core or comprehensive). This is out of a total of more than 50 G4 reports published in the U.S. in 2014, according to the GRI Sustainability Disclosure database. 

AMN Healthcare: AMN Healthcare is a leader in healthcare workforce solutions, and the largest healthcare staffing company in the U.S., employing almost 2,000 people. 17 material issues are defined and the company reports against 18 performance indicators. Materiality, for the purposes of this inaugural report, AMN says, is limited to areas directly under operational control. This means, I guess, that AMN is looking at its people and services and how they are managed, as a first stage, rather than the outcomes of the contribution that AMN makes in healthcare quality across the U.S. The report opens with a good overview of the trends in the industry - identifying both the risks and opportunities. Material issues are explained and the company's approach is described. However, there is a little disconnect between what's material and the performance measures that support the management approach - for example - business loyalty is a material issue and relates to customer retention. However, AMN does not offer a metric specifically related to this. Similarly, there is a shortage of relevant context in some areas, for example, AMN claims ongoing improvement in health claims as proof that the company's approach to health and wellness is working. This is really great. Some sense of context - how this level of claims stacks up against the sector or other companies would help us understand whether this is good performance relative to industry practice and norms. Overall, though, this is a credible first-report from AMN that demonstrates positive practice and intention. 

Axalta Coating Systems: Axalta provides paints and coatings to a range of industrial customers. The company's liquid and powder coating brands are sold in more than 130 countries, produced in 35 manufacturing centers on six continents and supported by seven research and development centers. Axalta employs more than 12,000 people. The report is a 74 pager, with slight marketing overtones, and a separate GRI Content Index downloadable from Axalta's sustainability website. Interestingly, the list of Axalta's 11 most material issues appears right at the end of the report, on page 70, although the company maintains that these issues "informed the structure and content" of the report. By and large, this seems to have worked, although there are issues for which Axalta has not yet formulated a position or organized itself to collect data. Axalta reports against 31 performance indicators although the link between performance indicators and material impacts is not entirely clear at all times. Axalta admits what is a frequent dilema for G4 reporting companies: material aspects that do not have "pre-defined GRI indicators". In these cases, Axalta has described its approach. In future, Axalta could develop a company metric to support managing and reporting performance on these issues. Overall, another credible report.  

Cigna: Cigna is a global health service company with products and services provided through a range of subsidiary companies. Cigna's products include healthcare services and insurance. Cigna operates in 30 countries with 80 million customer relationships throughout the world and 35,000 employees worldwide. Cigna's first report is an 88 pager (including 13 pages of GRI Content Index). Cigna has selected 17 Material Aspects from the GRI table of Aspects, and reports against 24 performance indicators. However, in the process describing stakeholder engagement and materiality assessment, the four issues that appear to be most significant to internal and external stakeholders are four sub-areas relating to healthcare. These issues appear as the focus of Cigna's charitable and foundation-supported activities but do not seem to link directly to the core business approach of Cigna. One of these, for example, is health equity. This is well discussed in the Cigna report - good contextual information and a detailed description of how Cigna is adressing this issue through its core business. Health equity, however, is not really counted as a material impact or as a performance indicator. I think this is one of the inherent problems as companies try to fit their reporting into the G4 framework - there are some issues that just don't fit and companies need to find their own way of reflecting these issues effectively. In this case, it seems that Cigna has a great understanding of what's important, good focus and a strategic approach. The G4 framework could be used more effectively to help reflect this. 

Indianapolis Airport Authority (IAA): This is a solid first report from the Indianapolis Airport Authority which is a municipal corporation established in 1962. The IAA operates in central Indiana with main offices in Indianapolis. Including the Indianapolis International Airport, the IAA currently owns, develops, and operates six airports in the Indianapolis area, employing approximately 450 people. For the second consecutive year and third time overall, the Indianapolis International Airport (IND) was recognized as the best airport in North America by Airports Council International. IND was also named best airport in North America for 2012 and 2010 and has been ranked in the top three airports in North America in every year since. Hopefully, the focus on sustainability has supported IND's positioning here :). The report is a simple word-format compilation of 70 pages. Material issues are not specifically listed, but the GRI Content Index references 24 material Aspects are 41 performance indicators. The material Aspects are picked from the GRI predefined table of Aspects and the report narrative does not prioritize these issues. The content for the report was selected using an internal survey of employees. For the future, IAA offers to include broader stakeholder input based on responses to a SurveyMonkey survey which is available online. However, the survey is elementary, listing the full G4 Aspect list, with no real background or explanation. I doubt responses to this survey will be of any real value to IAA. On the other hand, I do feel that the IAA deserves recognition for making efforts toward greater transparency and engagement. This is a genuine and credible, if a little clumsy, attempt at reporting that does not really exploit the opportunity of G4. However, I am sure that, with the right leadership and processes, IAA will mature into a better reporter, based on deeper embedding of sustainability practices and realization of the value this brings. 

Murphy Warehouse Company: Murphy is a full-service supply chain logistics business based in Minnesota and employing around 180 people. It's a family-owned business that was founded in 1904 with "a horse and a wagon" and is currently managed by President and CEO, Richard T. Murphy Jr who is a fourth generation Murphy family member. The company, and its report, oozes genuine family values and spirit and the accomplishments of this small-sized enterprise in the area of sustainability are impressive, in a way which appears to truly reflect a business approach and not just a nice-to-have. In fact, Murphy is one of the few first-time G4 reports that I have come across so far that actually defines a focused set of materially important issues and a set of  targets.

On the other hand, Murphy's use of the G4 framework is rather ingenuous and, although the report itself is a great 20 page review of performance and activities, largely focusing on the identified material impacts of this business, there are inconsistencies in the use of G4. For example, the separate 12-page GRI Content Index lists every single core disclosure, DMA and performance indicator, but in several cases, inadequate responses are provided. Murphy maintains that the report was externally assured but no assurance statement is available and it is not clear exactly what was assured and how. The GRI Content Index omits the obligatory "assurance" column so this is rather obtuse. The link between material impacts and G4 disclosures is not always quite clear, for example, "Materials and Resources" is noted as a material impact. A Disclosure on Management Approach statement appears in the report. But responses to the two possible performance indicators relating to this material impact - G4-EN1 and EN2- are "Murphy does not report on this indicator. Murphy is a service company that does not manufacture a product."  Go figure. Overall, however, I like the Murphy report and I believe the company's sustainable approach. The use of G4 has not really added value, possibly because the framework was not fully understood. An SME reporter such as this could deliver a fine report without complicating life by attempting to be "in accordance" and no one would object. On the other hand, using the G4 framework does imply familiarity with it and adherence in a more consistent way. 

Newfield Exploration Company: Newfield Exploration Company (NYSE:NFX) is an independent energy company headquartered in Texas. Newfield is engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids. The company is 25 years old and employs around 1,500 people. Newfield's inaugural report is both a positive example of the use of G4 and an example of the limitations of the framework. This is one of the first G4 first-time reports I have seen that actually presents a list of material impacts that was not created by box-ticking the G4 predefined list. It includes material Aspects such as: Community Safety, Well Integrity, Induced Seismicity, Hydraulic Fracturing and Community Relations, that are not G4 standardized Aspects.

Newfield notes: "Our materiality assessment identified significant topics that do not fully align with a GRI Aspect. ... We fully report on these topics; however, GRI indicators are unavailable and omissions are not applicable." This is a good approach by Newfield and shows serious consideration of the G4 framework. On the other hand, however, the company has not provided performance indicators for these material Aspects, as even if they are not predefined G4 Aspects, stating them as material requires a performance indicator that tracks what the company is doing to manage the issue.

In other respects, this is a methodically written and clear report that applied the G4 framework well. 18 material impacts are defined, and Newfield reports against 22 performance indicators (some partially, includes indicators from the Oil and Gas Sector Disclosures), as well as additional indicators that confirm to the Oil and Gas Industry Guidance on Voluntary Sustainability Reporting developed by IPIECA (the global oil and gas industry association for environmental and social issues), API (American Petroleum Institute)  and IOGP (International Association of Oil & Gas Producers, formerly known as OGP). Newfield also maintains an external advisory group made up of 7 expert stakeholders. This advisory group wrote a commentary for the report, including recommendations, something I find to be good practice. Newfield's report is a good example of the use of G4 for a first-timer, and appears to be in line with the spirit of G4 and not just the letter.

Simple Green (Sunshine Makers, Inc.): Simple Green is the brand of Sunshine Makers, a privately-owned family company founded over 39 ago by the father of Bruce FaBrizio who runs the company today. The company developed a biodegradable, not-toxic, non-flammable, non-abrasive cleaning formula and now sells environmentally friendly cleaning products in 41 countries, manufactured in 11 facilities worldwide. Sunshine Makers employs 59 people directly and works with a network of partners for distribution. Sunshine Makers also founded EGBAR (“Everything’s Gonna Be All Right”), a non-profit foundation for environmental education and community improvement projects.

Simple Green's Value Chain

Simple Green's report is impressive. It's nicely designed, well-structured and reflects a strong sense of sustainability culture and practice, not specifically created in order to write a report, but something that has flown out of the spirit of the founding family and extends throughout the entire value chain. It does not shy away from admitting areas of activity that the company has not yet managed to address, and transparently reports outcomes of a more structured stakeholder engagement process conducted for the first time in 2013.

Simple Green identifies 14 material topics and reports against 34 performance indicators. The company makes it clear how it selected the material content for this inaugural report in a way which I find to be transparent and credible: "The content of this report was defined by multiple elements. They included (1) availability of data for the reporting period, (2) our current understanding of our value chain, (3) discussion with our stakeholders, (4) surveys of our stakeholders, (5) an aspect-impact analysis and (6) a materiality assessment."

The report contains targets for environmental impacts and is assured for all general and some performance indicators. All in all, a very professional, interesting and mature first report. As you can probably see from the number of photos I clipped from the report, I liked this one best of all the U.S. first timers. 

Whitewave Foods: The WhiteWave Foods Company "is working to change the way the world eats for the better." Prior to 2013, WhiteWave Foods was a wholly-owned subsidiary of Dean Foods but from July 2013 the company became completely independent.  White Wave brands in the U.S. includes Silk® plant-based foods and beverages, International Delight® and LAND O’LAKES® coffee creamers and beverages, and Horizon Organic® premium dairy products. In Europe, Alpro® and Provamel®, offer plant-based nutrition food and beverage products. The company employs almost 2,000 people. 

This 58 page report defines 17 material topics and reports against 24 performance indicators from G4 and from the Food and Beverage Sector Disclosures. One of the nice things about this report is the clear connection between material topics and the performance indicators that support them. It's absolutely clear that what's material is measured. This is the spirit of G4 and hardly any of the first-time G4 reporters I have seen have done this explicitly. It makes like much easier and clearer for report users. 

Aside from this, the report provides a good overview of how WhiteWave is operating responsibly and advancing organic and plant-based food products to support healthy lifestyles. What I am missing, though, in this report, is a sense of whether this is actually changing markets and consumer perceptions and behaviors. Despite a nice value chain graphic.....

... this report stays largely at the front end ... when it gets to consumer use and impacts on consumers, I find the WhiteWave report less informative. WhiteWave writes: "Today, nutritious dairy alternatives made from soy, almonds, coconut, rice and hazelnuts are a huge and growing category, embraced by millions for their health and sustainability benefits." I'd have welcomed a little more context here .. How rapidly is the market growing? What are the challenges of providing such alternatives to mainstream consumers? Is this a niche market and if so, why? What are the scientific health benefits of WhiteWave's alternative food products and what impact could this have on health and wellbeing in society? etc. This is the real sustainability story of WhiteWave and I am wondering why changing consumer perceptions and practices in relation to healthy eating and the value of alternative food products is not material for WhiteWave. As it stands, however, the company tells a great story in a well-put-together first-time G4 report. 

UniGroup, Inc.: UniGroup is a $1.6 billion transportation company headquartered in Missouri. UniGroup and its subsidiaries provide services under a range of brands including United Van Lines, Mayflower Transit, United Containers, Mayflower Containers, UniGroup Logistics, UniGroup Relocation and more. The group has 903 employees in the U.S.  

UniGroup's report is a simple no-frills word-format 35 pager with a really REALLY detailed materiality matrix that was developed internally by company staff. It contains more issues that I was able to count without getting lost, with 19 issues in the top-right (most important to everyone) quadrant.  I always wonder how companies manage to plot issues on such a matrix with such detail and whether the relative positioning of issues in such a granular way is actually helpful to anyone.  

In any case, the top three issues stand out as being emissions, customer privacy and customer health and safety. In the case of customer health and privacy, the report barely refers to this - the disclosure is all about driver safety. In the case of customer privacy, there is a short paragraph but no reponse to the performance indicator as required. In the case of emissions, the DMA is "UniGroup recognizes that the environmental impact of the emissions from those vehicles operating under our authority is material" but no data is reported against Scope 1 or Scope 2 emissions, though Scope 3 emissions are recorded, though I suspect that might actually be Scope 1 emissions (fuel). 

Here we have an example of a really good effort on materiality mapping, but a disconnect in the way the report is constructed and a gap in adherence to the G4 framework. Rather than jump to G4 core, this company might have been better starting with a simpler report that reflects what it is doing, rather than trying to accommodate a more advanced approach that is driven by materiality developed through due process. The report is a good first dive into transparency and it is clear that much work and thought has gone into its production, and indeed, it projects a positive disposition towards sustainability and certain achievements in performance. I think, however, that UniGroup might have benefited from a little guidance in the preparation of this report. 

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So there we have it.... 9 first-time G4 reports, all rather different and all rather unique. All challenges and all achievements. My overall impression, though, is that the use of G4 is still evolving. Rather than helping guide the way companies report, there is still a lot of "report first and then force-fit G4". I am optimistic that this will change.... second round reports, I am sure, will be a different ball-game.

In the meantime, though, we continue on our journey. Next up....

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via Twitter (@elainecohen)  or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm).  Check out our G4 Report Expert Analysis Service - for published G4 reports or pre-publication - write to Elaine at info@b-yond.biz to help make your G4 reporting  even better.

Five reasons you will be using GRI’s new G4 guidelines any time soon

Anyone who knows me knows that I just have to respond to a post entitled "Five reasons you won’t be using GRI’s new G4 guidelines any time soon" by Bob Beer of Nowack-Beer Consulting which appeared on Toby Webb's Smarter Business Blog. In fact, I was even nudged to respond by a client :-), so how can I not?

 

In his post, Bob Beer  makes the point: "While well-intentioned, GRI’s new G4 reporting requirements are a serious impediment to the widespread and rapid adoption of this protocol." The key examples of aforesaid impediments cited by Bob are: the need to revamp processes to assess materiality, more time, effort and cost, "thorny" content issues such as transparency, materiality and stakeholder engagement, lack of report quality assurance and "Lack of a Mandate: Use of the GRI protocol is voluntary and there are no formal requirements or pressure to use GRI. (CDP, by contrast, has 700+ signatory institutional investors who apply formal pressure for disclosure.)".

Well, Bob, got news for you. Not gonna happen. G4 reporting is a train that's bolted. Oops, shouldn't that be a horse? Well, whatever it is, it's still bolting. And it ain't gonna stop. I already have three G4 reports in the (very) final stages of preparation for global clients, and all my reporting clients who are starting their 2013 reporting cycle around now have confirmed their will move to G4. In the G4 Master Class I delivered in London last month, which was attended by representatives of some of the largest and most respected reporting companies from a range of sectors including fashion, retail, energy, media, chemicals and more, the interest in G4 was tangible. In the G4 training (Le Master Class) I presented at last week in Paris, organized by Institut RSE, the leading mover and shaker in French sustainability circles, an amazing selection of prominent French reporting companies were avidly attentive to the new G4 ins-and-outs, and were visibly computing their own transition as they developed their knowledge of how G4 can challenge them and help them move forward as sustainable and transparent companies. Our G4-Ready Expert Analysis, a 20+ page review of your current G3 report and assessment of the requirements for transition to G4 with recommendations, has become a popular service and has my analysts at Beyond Business going rather cross-eyed comparing disclosures and indicators. Wherever I engage, I am seeing interest in G4 and intent to use the new guidelines in the next reporting cycle.

And by the way, Bob Beer says: "Developing a G4 report will require more time and effort than a G3.1 report and, as a result, will cost more to prepare." I find there is absolutely no basis for this claim. We are not charging our clients any more for producing a G4 report, and I have not noticed a significant additional time factor in the G4 report preparation in the work we have been doing with clients to date. Yes, there needs to be some addition of effort around process and engagement, but this is offset by reduced attention to many irrelevant reporting requirements in G3.

Already, within six months of the G4 launch, I can count 12 G4 CORE or G4-referenced reports that have been published. 

The City of Warsaw
Thomas Properties Group 2012
Singapore Exchange Annual Report 2012 2013
Environment Park s.p.a 2012
Lavola Sustainability Report 2012
Grupo Sancor Seguros 2012-2013
GAP Inc. 2011-2012
Wesst 2012 Integrated Report
Ingecal Sustainability Report 2012
Architectural Services Department Hong Kong 2013
World Bank Sustainability Review 2013
Mireco Mine Reclamation Company Korea 2012 Report

There may be more that I am not yet aware of. I know there are several more on the way. Here's one: Matthew Swibel Director of Corporate Sustainability at Lockheed Martin noted in response to aforementioned post:  "At Lockheed Martin, we intend to apply the G4 framework in our next report. Our analysis anticipates doing so will make the process more efficient and the disclosure more relevant to our core issues."

Of course, G4 is not perfect, and those who have already started to use it, as I have, find that there are real challenges in using the framework as it is intended. I will talk more about these challenges in future posts, now that I am just catching my breath after a VERY intensive reporting season and have gained much first-hand experience in writing G4 reports. However, there is no doubt in my mind that G4 is a major improvement on G3, and it does require a different reporting mindset. But I find the points raised in the post by Bob Beer to be poorly considered, poorly presented and poorly concluded. 

The five reasons you WILL be considering reporting G4 for your next report are as follows:

You want to show leadership, responsiveness and agility in your reporting: Change is not easy for many and often impossible for some. It's easy to continue to do what you have always done. Early adoption of the G4 guidelines shows that your company is leading the way as a stakeholder-responsive, agile and forward-thinking player in sustainability. The G4 guidelines didn't spring up from thin air. They were the result of a multi-year, multi-stakeholder, multi-format engagement process and, despite the complexities of reaching consensus among such a wide range of diverse interests, GRI managed to deliver a product which is the result of what a representative selection of most stakeholders believe to be most important in sustainability reporting. Early adoption makes an important statement about your company's capacity to listen to stakeholders, navigate the winds of change and demonstrate adaptability and agility. 

You welcome the opportunity to focus your reporting on the most important things: The G3 framework actually forced companies who wanted to demonstrate transparency to report on a whole bunch of stuff which was irrelevant to their companies and fill their A level reports with a string of inconsequential statements, such as how biodiversity is not material to our organization. G4 cuts through the verbiage and goes right to what's most important in terms of the impacts your organization has on society and the environment. In my experience, this creates a different sort of dialogue within the company, and provides a new legitimacy for sustainability managers to demand greater process and reflection in the development of the Sustainability Report. Internal and external stakeholder engagement is now a necessity in G4 reporting while it was lip-service in G3 reporting. My experience is that companies actually welcome this as a refreshing and invigorating approach to reporting, and see opportunity in the materiality focus, both in terms of guiding and managing their own internal sustainability strategy and practice and also in terms of external communication. To say, as Bob Beer does, that "more detailed analysis and reporting on material issues could alarm investors and stakeholders, causing negative impacts on a business" is, in my view, a complete reversal of the truth. It's precisely that companies have NOT done this in the past that investors have been alarmed and stakeholders have been mistrustful.

Your competitors are doing it or are about to do it: You will soon realize that G3 is a thing of the past. My prediction is that over 50% of the GRI based reports published in 2014 will be G4 CORE or G4 referenced, well before the official expiry date of G3 at end 2015. As you look around at what your peers are doing, you really won't want to be left behind using an anachronistic reporting framework that everyone has forgotten. 

You appreciate the flexibility of the G4 guidelines: The G4 guidelines offer companies the opportunity to  mold the G4 framework around what you really want your stakeholders to know while meeting the information needs that they have requested on the issues which matter most to them. At CORE level, the degree of disclosure is manageable, given that companies can decide where to draw the line in terms of MOST material issues. You can decide that your report will cover in detail the top 5 issues, the top 10 or the top 25, and then you can align your disclosures with that. No-one says you have to report on every single sustainability topic or activity that you have ever done. Gone are the days of "we donated $5000 to a local NGO last week, let's put that in the report" and "we changed the light bulbs in the CEO's office to T5, let's put that in the report". Now it's about: "these are our most material impacts and let's talk about those in depth in the report - the rest is just chit-chat". A G4 report can tell a story just as well as any other type of report. You can use the G4 Content Index to disclose specific data which you may prefer not to disrupt your narrative. Aside from the General Disclosures which are required for all G4 in accordance reports, some of which are a little challenging (and not so relevant), even at CORE level, the G4 guidelines are all about do-it-yourself relevant transparency enabling flexibility and adaptability to each organization's needs. Why continue to be constrained by the old rules when you can break free with the new ones?

You want more people to use your report: A G4 report done well should be far more appealing and useful to your stakeholders than a G3 report, no matter how well the G3 report is written and constructed. The worst thing that can happen to a Sustainability Report is that none uses it. A G4 report is far more usable because it is more focused and more relevant to the most important sustainability issues.

Finally, I will round off with a quote from my colleague, the sustainability strategy expert, Joss Tantram, who also responded to the blog post by Bob Beer by saying, among other things: "A materiality centred approach is a step towards translating sustainability into the language and dimensions that have resonance for economics and capitalism."




elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting  AND  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

31 Tips for writing a G4 Report

Those of you who have been following my Twitter account may have noticed my G4 Tip of the Day - all using the Twitter hashtag: #UG4 - published over the last month or so. Here, in a convenient, one post format, is a recap of all the 31 tips in this "G4 on Twitter" month. (I had to shorten a few to get them tweetable, below are the full versions). But, before you go to the tips, here's something else I wanted to mention:

Understanding G4 can help you navigate G4 with relative ease. I'd be happy to spend a day with you talking about it and sharing my insights, working approaches and recommendations. In fact, that day is October 22, in London, when I will be conducting the first Understanding G4 Master Class, an intensive G4 day, in which I walk a small group through the paces of G4. If you can make it, please register soon as numbers are limited to 25 to enable enough time for good discussion and learning, with current examples of reporting practice. If you would like to join me and other potential G4 fans, please register here (Send me an email or DM me on Twitter for a discount code). And yes, ice cream is on the menu.

 

Now, here's a recap of this month's G4 tips.  

G4 Tip 1: You can't write a G4 report with a G3 mindset. Make the shift to G4. It's a different paradigm.

G4 Tip 2: G4 recommends including at least 3 years of data when responding to indicators (Implementation Manual, page 71).

G4 Tip 3: "Accountability strengthens trust between the organization and its stakeholders. Trust, in turn, fortifies report credibility."  (Implementation Manual, page 10)

G4 Tip 4: Specific Standard Disclosure G4-EN2 includes a methodology to calculate the percentage of recycled input materials.

G4 Tip 5: Total energy consumption in G4 should be reported in joules or multiples.

G4 Tip 6: G4-33 requires reporting of whether senior executives are involved in seeking assurance for the organization’s sustainability report.

G4 Tip 7: G4-52 is a new disclosure required at "In Accordance" Comprehensive Level and requires a description of the process for determining remuneration.

G4 Tip 8: Remember that each word is important in a G4 Sustainability Report. Somewhere, there is a stakeholder who might read it.

G4 Tip 9: G4 reports may be shorter than G3 reports. Or longer. Or the same length. Your materiality process will decide.

G4 Tip 10: Did your Board read your Sustainability Report? Ever?  G4-48 asks you to spill the beans (In Accordance, Comprehensive Level).

G4 Tip 11: Only go for In Accordance G4 Reporting at Comprehensive Level if you have very robust governance disclosures.

G4 Tip 12: G4 reporting is not a race and not a competition. Going slow, and doing it with integrity, is more important.

G4 Tip 13: Sustainability reports published after 31 December 2015 should be prepared in accordance with the G4 Guidelines.

G4 Tip 14: G4-1 disclosure - CEO statement - includes reference to "key events, achievements, and failures during the reporting period".

G4 Tip 15: It is possible, but not recommended, to produce a G4 Sustainability Report with one material issue.

G4 Tip 16: Readers of G4 Sustainability Reports must know what to expect. More forest. Less trees.

G4 Tip 17: In a G4 Sustainability Report, material issues should smack you in the face. If they don't, it's not G4.

G4 Tip 18: G4 does not require companies to list the awards they have received. But, go for it anyway.

G4 Tip 19: G4-12 is a simple disclosure: Describe the organization's supply chain. Piece of cake? Maybe not.

G4 Tip 20: G4-EN18 requires GHG emissions intensity ratio. Pick your normalization factor carefully and be consistent.

G4 Tip 21: Read my book, Understanding G4, before you even start thinking about writing a G4 Sustainability Report.

G4 Tip 22: Engage your Top Team in the selection of material issues for your G4 Report. The CEO must sign off.

G4 Tip 23: G4 Reporting is about ownership and accountability, not about how many boxes you can tick.

G4 Tip 24: Probably best not to select more than 200 Material Aspects for your G4 report. Otherwise it will take you more than a year to write it. Less is more.

G4 Tip 25: Transition from G3 to G4 with consistency. But remember the objective is G4, not G3 plus new bits.

G4 Tip 26: Go for CORE unless you have a really good reason to go COMPREHENSIVE with your first G4 Sustainability Report.

G4 Tip 27: Embedding good reporting process is the key to G4. Bluffing doesn't work all that well.

G4 Tip 28: Don't try to be In Accordance with G4 if you can't be. Better to "refer" to G4 and transition when the time is right.

G4 Tip 29: Don't expect your stakeholders to praise you for your G4 report. Acknowledgement is also good. 

G4 Tip 30: A G4 report is hard work. Don't be deceived by it's slick looks. You have to invest.

G4 Tip 31: This is the last G4 Tip for this month. It's a short tip. Read all the G4 Tips again and then, just do it!

Good luck with your G4 Reporting. With so many useful free tips, you have absolutely nothing to fear :-)

See you in London in October?





elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting  AND  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)

The UG4 Webinar: 14 questions about G4

This week we ran our first Understanding G4 Webinar. By we, I mean DōSustainability and the DōShorts Sustainable Business Collection who were kind enough to publish Understanding G4: The Concise Guide to Next Generation Sustainability Reporting. We had close to 180 registrants from almost as many countries... well, a lot of countries anyway, and from a range of sectors and also from a range of stakeholders including CSR and Sustainability Managers, consultants, academics, NGOs and media.

 

 

I'd like to emphasize that I do not speak on behalf of the Global Reporting Initiative (GRI) not do I have any official connection to the GRI in relation to G4, other than the fact that my company, Beyond Business Ltd has been a GRI Organizational stakeholder for several years and we act as a data partner in Israel for advising the GRI of locally published reports. I have developed my understanding of G4 through attending the G4 launch in Amsterdam in May 2013, and thereafter spending many pleasant hours of study of the 300 pages of the guidelines, plus a couple of conversations for clarification with Bastian Buck, Reporting Framework Manager of the GRI, and also, through conversations with colleagues and clients around the world. In particular, Dr. Glenn Frommer, Head of Sustainable Development at the MTR Corporation was extremely helpful in sharing insights and working through my Understanding G4 manuscript with an eye for detail and balance. Also, as we are currently working on G4 report preparation for clients, and preparing detailed G4-Ready Analyses, for which we have developed some proprietary tools, for example, our G4-Ready Dashboard, I find myself reciting Specific Standard Disclosures in my sleep. Therefore, I feel my knowledge of G4 is, modestly, pretty good :). Even when I am sleeping.

 

 

 

If you want to see the webinar recording, you can do so here:  

As usual when I am in webinar mode, I talked too much and didn't get to answer all of the questions that were tabled by participants. So, what better place than to do this than on the CSR Reporting Blog? Here are the questions as I received them from webinar moderator Gudrun Freese, DōSustainability's co-founder and Communications Director. And my answers.

 

(Big thanks to all those who participated and submitted these questions)

Question: G4: First mover or fast follower? What the right time to move from 3.1 to G4?

My answer: The time to move to G4 is now. Sure, there is always a reputational point or two to be gained from demonstrating agility, openness, flexibility and adaptability to new guidelines and requirements, so "first mover" may well give you an edge for a short time. However, this is of far less value than getting your first G4 report right. That doesn't mean perfect. It means right.

The quality of your G4 report will be defined by the robustness of your materiality process the way you engage to determine what's most material for your business and for your stakeholders. Once you have this clear enough (not clear perfect, but clear enough), you can work towards your G4 report. No need to wait. It's not a race or a competition to see who gets through the G4 goalposts first, but there is no real reason to delay transitioning to a better framework. CORE and COMPREHENSIVE G4 options are equally relevant and equally commendable options. 

 

Question: Elaine, Do you think that we have to add linkage tables to the sustainability reports due to the high number of existing frameworks. What has to be done?

My answer: GRI has not prepared nice neat linkages content indexes such as existed for G3. The Book of Reporting principles does includes three tables which show the correlation between (1) UNGC ten principles (2) OECD Guidelines for Multinational enterprises and (3) UN Guiding Principles on Business and Human Rights. In the G4 Manual, these tables show the key principles or chapters from these three frameworks and then a reference to a G4 Category and/or Aspect, which I personally don't find terribly helpful. In Understanding G4, I developed tables which show this the other way around, using the G4 as the start point and showing which Specific Standard Disclosures align with the UNGC and OECD principles and chapters respectively.

For use in a G4 report, companies will have to create the tables themselves, unless GRI actually publishes a tool that can be used. There are no linkages to other frameworks, such as, for example, UNGC Advanced COP criteria, or LEAD criteria, CDP, or the UN CEO Water Mandate, or ISO 26000, or other sector frameworks such as they exist.

Question: Is it necessary to answer/include sector supplement questions to be in accordance to CORE?

My answer: It is advisable to consider sector supplements, although these exist for only a small number of sectors at present. When selecting material issues, a company should also consider sector supplements (now called "Sector Disclosures") and if a sector-specific issue is material, then the relevant performance indicators should be used. 

 

Question: How rigorously GRI does cross check / verify the reports?

My answer: For G4, so far, zero rigorously. At this point, GRI has not committed to performing an "Application Level Check" (ALC), which we know from our ABC days of G3, on new reports which are "In Accordance" with G4. Time will tell if GRI will do this. If so, the In Accordance check will have to be somewhat different and unequivocally more rigorous than the current ALC, in my view. All the issues around false claims in GRI reports which prompted a weak response from GRI earlier this year would only undermine G4 if they resurface. Either GRI will elect to stay on the sidelines and let stakeholders do the work, or they will opt for a full and reliable check which adds value to companies and stakeholders.  

Question: Where can we find the downloadable Book of Principles, please?

My answer: All the G4 materials can be downloaded from the GRI website - click here for direct teleportation. Phew. Glad that was an EASY question.

 

Question: Is the G4 aligned to the UN Global Compact?

My answer: Sort of. There are general linkages to the ten principles of the UNGC in the Reporting Principles book of G4, and throughout the Implementation Manual by indicator where relevant.  However, with a G4 report, where it is possible to, say, completely omit at COMPREHENSIVE level any discussion of Human Rights or Anti-Corruption, if they are not material, or even environmental disclosures, a G4 CORE or COMPREHENSIVE report may not meet the requirements for an Active Level or Advanced Level COP, where a G3 A level report almost certainly would have done and a B level report probably would have done.

Given the seemingly close relationship between GRI and the UNGC, it is indeed rather curious that greater alignment was not designed into both organizations' disclosure requirements.   

Question: Would there still be the C, B and A levels in reporting?

My answer: Only by mistake.  Or by anachronism. I have already forgotten them.

 

Question: Are the KPIs in G4 different from the ones on G3.1?

My answer: Yes. And No. G4 has 91 KPIs (Specific Standard Disclosures) where G3.1 had 84  and G3 had 79. (Inflation happens, even to the GRI). About 12 of these disclosures are completely new, but many more have been modified. In many cases, the formal reporting requirement of a certain part of an indicator has been moved to "guidance" which means, essentially, take it or leave it.

 

Question: Can you specify the information "One performance Indicator per Aspect"? Is there a minimum number like 10 indicators as it was in G3?

My answer: No, there is no minimum. The number of performance indicators is determined by the number of Material Aspects you select. If you have 346 Material Aspects, then for a CORE report, you would have to spill the beans on 346 Performance Indicators. If you have 1 Material Aspect, then in theory, your CORE report could be very short indeed. In practice, though, there is an expectation that due process will prevail and that companies will deliver a result which includes an appropriate and relevant set of Material Issues by adhering to the reporting principles for content and quality.  

Question: How G4 is accepted internationally and how is the comparison with ISO standards?

My answer: G4 has received significant appreciation from a wide range of those connected to Sustainability Reporting in different ways, as it is seen to provide a more relevant and targeted approach to sustainability reporting. There are some who feel that G4 doesn't go far enough is some areas, but on the whole, G4 is welcomed by the global CSR and Sustainability community, at least, that's the way it seems to me. G4 does not directly compare with ISO standards, as it is a reporting framework and not a quality standard. G4 blissfully ignores ISO26000, despite the fact that many companies are using ISO26000 to structure sustainability reports. G4 does make references to ISO standards on occasions, such as ISO14604 and the GHG Protocol for carbon emissions reporting.

Question: How about other emissions like Mercury, POPs, other pollutants considered hazardous in Basel, Stockholm, Rotterdam, PIC conventions?

My answer: G4 contains a performance indicator relating to "other" emissions including Nox, Sox, POPs, HAPs, VOCs and PMs. (Ha-ha. Don't you just love the language of sustainability?). Check out Specific Standard Disclosure G4-EN 21, Emissions Aspect, Environment Category. As to other pollutants, companies are free to add specific references if these are material to their business and their stakeholders. G4 is less prescriptive here.

Question: How is supply chain environmental degradation considered by G4 in developing nations. Like conflict material issues. Can a company intentionally limit or reduce the boundary of supply chain issues dealing with Env, Child Labor, against ILO basic criteria, and still be acceptable by GRI authorities, e.g. metals extracted from African countries - being used by multinational mobile manufacturers?

My answer: Great question and a very serious issue which goes right to the core of how a company should use G4 for reporting on important issues. Of course, the G4 framework is only as good as the companies who use it. As with any set of guidelines, companies may abuse them. It is indeed possible to "doctor" your set of material issues and leave out the ones that are uncomfortable for a company to report on. It is indeed possible to deliver an "In Accordance" G4 report at COMPREHENSIVE level and leave out half of the information that would have been required at G3 Application Level A. It is indeed possible to lack integrity in the preparation and publication of G4 reports. At this point, GRI has not announced plans to check and monitor how the G4 framework is being used.

However, this speaks to the guiding approach in the development of G4. That of encouraging companies to take ownership for their reporting and demonstrate accountability in a mature way. This means that companies should follow due process (see the G4 Reporting Principles on Content and Quality Book) in the development of a materiality matrix, consult with internal and external stakeholders as relevant and define the list of issues that make sense for the business and its stakeholders. The report should be constructed around these issues.

G4 starts from the point that companies will and should want to do this because it's right for their business. Of course, we all know better, and that many companies will not be quite as far-sighted. We will all need to be very alert when we see the first G4 reports entering the reporting landscape and first, before counting how many performance indicators a company has responded to, scrutinize the way in which material issues were defined and whether those issues make sense in a broader context of a company's role in society and impacts on people, society and the environment.

Specifically, as regards conflict minerals, child labor issues etc., these should be reported if they are considered material by the reporting company. G4 does not prescribe disclosures on these issues. 

Question: How global usage of G4 is acceptable - specially in Middle East UAE? 

My answer: Globally, the GRI Reporting Framework is very widely used. What the uptake of G4 will be remains to be seen. In UAE, there are very few reporters at this time and my impression is that uptake of the GRI Framework is about half and half. Some use GRI - including Masdar, who delivered a first Sustainability Report for 2012 at GRI Application Level A+, and some don't. What will happen with G4 is anybody's guess. Anyone for a little wager?

Question: Should it be necessary to refer to G3 before using this new version? Or just apply G4 without looking back the previous version?

My answer: Fabulous question to finish up with. I think the best way to approach G4 is to start with G4. It really doesn't matter what was in G3. Of course, if you have published G3 reports, you might wish to make some comparisons of different disclosures and this might help with decision making in certain areas as you make the transition.

But in my view, G4 needs a G4 mindset, not a "G3-plus-changes" mindset. G3 has tended to start with a set of reporting requirements and you work down the list deciding what you can or cannot report on. G4 starts with a process to define a set of issues that are important and a decision about how to report on them. It's a different game.

G4 is a standalone framework. We don't need G3 any more. In fact, I predict that very soon, G3 reports will be no more than nostalgia.

 

Thanks again to all who attended the webinar and for all your questions.

Don't forget to check out the G4 Guru on Facebook :)

 

Looking forward to seeing loads of G4 reports in the coming months :)

 

elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of  Understanding G4: The Concise Guide to Next Generation Sustainability Reporting  AND 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)