Measuring Sustainability

GRI launches “user friendly” revisions to its reporting guidelines.

The challenges and opportunities of sustainability reporting were top of the agenda in Amsterdam in early October, with hundreds of corporate, government and non-governmental organization (NGO) executives scheduled to hear former U.S. Vice President Al Gore and other international notables mark the long-awaited launch of the latest Global Reporting Initiative (GRI) guidelines.

The new guidelines—commonly referred to as G3—are the third set of revisions since the GRI was introducedin 2000 with the stated mission that “reporting on economic, environmental, and social performance—sustainability reporting—become as routine and comparable as financial reporting.” The GRI guidelines seek to create one common form of non-financial reporting for “all organizations regardless of size, sector, or location.” GRI currently claims almost 1,000 reporting organizations from more than 53 countries, including major corporations such as Hewlett-Packard, Nike, McDonald’s, Coca-Cola and IKEA Group.

The latest G3 revisions include major changes in the “principles” guiding an organization’s reporting as well as revisions of key “indicators” of performance and “technical protocols” that provide detailed guidance on how to approach reporting.

The principles have been revised to be “very practical, plain language tests that really help the practitioner focus the report and get much more value out of it for their organization and stakeholders,” says Alyson Slater, Director of Communications for Amsterdam-based GRI. Notable changes among key indicators include a new “Disclosure on Management Approach,” which allows reporting organizations to “provide context for their performance” for interpretation by analysts.

“I think these G3 Guidelines are a very significant milestone in the whole field of non-financial reporting,” says Allen White, a co-founder of GRI who served as its CEO from 2000 to 2002. White, now a senior fellow at the Tellus Institute in Boston, says the “much more user friendly” guidelines will help persuade more companies to employ the GRI framework for sustainability reporting. One key goal of G3 was to make the guidelines more attractive to financial analysts seeking to assess sustainability performance.

“Companies don’t want 50 people asking them for 50 different things about labor standards,” says White. “They’ll be increasingly inclined to turn to the GRI framework as the emerging standard for reporting and they will, as many do now, tell analysts and other stakeholders, ‘If you want to know what’s going on with our labor standards, go read our GRI report.’”

To make it easier for organizations to use its reporting framework, GRI is employing a strategy of working with third-party service providers that develop supporting products. “GRI won’t provide services based on its own guidelines,” says Slater, but will “partner with learning and enabling-type services” to create new products. “We’ll do what we can to insure that all those software developers that are making reporting wizards are using the GRI guidelines accurately,” she says.

With GRI reporting organizations now nearing 1,000, “scaling up is the issue,” says White. “A thousand is great, but even if you’re just talking about publicly-listed companies, there are tens of thousands on all the stock exchanges. So it has to go an order of magnitude up the scale.”

GRI’s Slater agrees, suggesting that the G3 revisions were critical because “making sure the guidelines are as top-notch as they could be” was a prerequisite for growth. “There is a long, long, long, long way to go,” she says. “And for that, we can’t rely on the GRI network or the organization alone. We need NGOs to start demanding it, we need consumers to start demanding it, we need investors to start demanding it. Then you start having a knock-on effect.”

By Michael Connor. Published in the Fall 2006 issue of CRO Magazine.