The nonprofit Global Reporting Initiative is seeking comments on a draft of its third generation Guidelines for Sustainability Reporting.
The GRI is an independent "multi-stakeholder" organization that has developed voluntary guidelines for companies that report on the economic, environmental and social dimensions of their businesses. Those corporate reports, typically called "sustainability reports" that are issued annually alongside a company's 10-K, have been filed by hundreds of global companies, such as Cisco, HP, Japan's Hyundai, Germany's Commerzbank, and others.
The latest draft, released this month and dubbed "G3," updates guidelines last issued in 2002. The draft is the result of nearly a year’s worth of research, development, and consensus-seeking by multi-stakeholder technical working groups, according to GRI spokesmen.
The GRI says the guidelines were revised to increase their user-friendliness and to increase the comparability of reports, and experts say that has been achieved.
Savitz
"The guidelines are becoming simpler and clearer, which is a welcome change," says Andrew Savitz, a GRI expert and former partner in PricewaterhouseCoopers’ sustainability practice. "The guidelines are also becoming more prescriptive in terms of what to report, how to report, and about certain industry specific issues."
While the 2002 guidelines contained a total of 97 indicators, the draft G3 guidelines include 79 total indicators. New in the draft guidelines are:
Issues—Guidance on how to determine what issues to report on, and how to select relevant indicators;
Boundaries—Guidance on setting the report boundary;
Tests—A set of tests for each reporting principle to help with its application;
Risks & Opportunities—New disclosure items on strategy and analysis that highlight key issues, risks, and opportunities;
Indicators—A restructured Indicator section that now contains two main elements: "Disclosures on Management Approach" and "Performance Indicators;"
Protocols—A technical protocol for each performance indicator, which contains definitions for words used in the indicator, compilation methodologies, and other useful resources.
In addition to comments on individual reporting principles or disclosure items, the GRI wants input on a number of issues, such as how to define “relevance and materiality,” the usefulness of the concept of splitting indicators and management disclosures, the usefulness and appropriateness of the proposed Disclosures on Management Approach, and whether any essential process or narrative information have been lost from the 2002 guidelines.
Savitz says that companies should review the G3 draft to make sure they understand the implications. "CFO's and others in the internal reporting supply chain should pay particularly close attention," says Savitz, "as GRI is rapidly becoming the generally accepted standard for 'triple bottom line' reporting."
Comments on the draft guidelines, which are available in English, Portuguese and Russian, may be submitted through March 31, 2006 (see box above, right).
A second draft will be produced by mid-year and submitted to the GRI’s governing bodies for approval before its final release, slated for October. To increase awareness and participation in the public comment period, the GRI is holding a series of one-day “Sneak Peek” events in more than 20 cities from January through March.
Extensive details, the draft, related coverage, sample sustainability reports, and other resources are available from the box above, right.
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