The Global Reporting Initiative (GRI) is re-purposing itself under new leadership to drive the uptake of using reporting (i.e. to improve business processes, to drive greater progress towards intended outcomes, to become more influential in investment decisions, etc.), as opposed to driving the creation of reports in and of themselves.  Michael Meehan from GRI said “I want to shoot for a world where you don't have sustainability professionals sitting in silos. I am hoping to see companies integrating sustainability into all business decisions. (…) Now, people get it. What they need is better tools to integrate sustainability into the way they make decisions[1]."

To meet this objective, GRI is evolving its sustainability reporting guidance to a series of standards and looking to transition reporting to a more frequent and digitized format, much like the digital tagging that has been in use for many years in financial reporting.

This seems like an admirable vision for the GRI – and one the market should be ready for.  We know first-hand that our clients and their data and content contributors are looking for ways to get more value from their sustainability reporting processes as these reports take a significant amount of resources to develop, manage and deliver.

Let’s take a look at how GRI is evolving.

Shifting from guidance to standards

In a nutshell, GRI has introduced changes to simplify the reporting process by transitioning its G4 reporting framework from a guidance framework to a set of modular, interrelated standards. The Transition to Standards project was initiated in November 2015 by the Global Sustainability Standards Board (GSSB) in an effort to improve structure and formatting of content from G4 with the aim of making the GRI Standards easier to keep up-to-date, and even more suitable for referencing in policy initiatives around the world.  The key features are:

• These Standards include all the main concepts and disclosures from G4, with a more flexible structure, clearer requirements, and simpler language.
• There are 3 “universal” standards applicable to all organizations preparing a report ‘in accordance’ with the GRI Standards, and 35 “topic-specific” standards with more to be added in the future. (These topic-specific standards are based on the Aspects and Specific Standard Disclosures from G4, and have been whittled down from 46 to 35 aspects).
• Similar to G4, there will be two options for preparing a report ‘in accordance’ with the Standards: a Core and a Comprehensive option. Organizations will need to report against Sustainability Reporting Standards (SRS) 101, 201 and 301 and one disclosure for each material topic for Core and every disclosure for each material topic for Comprehensive, just as now in the G4 framework.
• The 35 topic specific standards are organized in three series; Economic topics in the 400 series, Environmental topics in the 500 Series, and Social in the 600 Series (the subcategories of Labor Practices and Decent Work, Human Rights, Society, Product Responsibility have been combined in this series).

The public comment period closed on July 17^th and GRI expects to have the final standards issued late this year or early2017, with them coming into effect for the 2017 reporting year (i.e., reports issued in 2018).

How will the new GRI Standards affect reporting organizations?

For organizations already reporting in accordance with G4 (core or comprehensive options), the impacts of the shift to the new standards should be relatively minor. For now, the “standards” don’t need to be certified against, the majority of disclosures remain the same, and GRI continues to emphasize the importance of reporting on the most material issues and provides a recommended process for determining those material issues.  However, the additional context and supplementary guidance the standards provide will be quite helpful for reporting companies, especially those new to reporting.

GRI has said they will continue to refine the recommended approach to reporting on certain aspects (now topics in the SRSs) to reflect best practice and ensure consistency with other reporting frameworks (i.e. CDP carbon and water questionnaires).

Companies will have to get used to new terminology – again (it wasn’t that long ago GRI transitioned from 3.1 to 4) – and may need to update the language used in their sustainability data collection and reporting software solutions (if they use one).

Some companies are thinking about how to report against the GRI G4 as well as the SASB standard for their sector.  Others are considering what an Integrated Report would look like and how to move in that direction. Every company’s reporting journey will be unique based on the specific demands and expectations of its key stakeholders.  Our job is to help our clients streamline their reporting and communication efforts in ways that provide the greatest business value, by helping them map out their key stakeholders (and their informational needs), identify their most material issues, set goals for each material issue and monitor and assess progress against those goals in an efficient, compelling and integrated manner.

The demand for greater transparency on sustainability performance is not going away, that is certain.  The SEC in the U.S. is currently undergoing public consultation exploring the importance of ESG disclosures to investors’ decisions, and what a disclosure framework for ESG matters might look like.  The EU Directive on disclosure of non-financial and diversity information has already been adopted and comes into effect for reports issued post Jan 2018. Another recent post from my colleague Emma Armstrong talks about how these developments might be game changers.

Stay tuned for our next blog in this series which will focus on GRI’s move to create the technical infrastructure necessary for digital reporting, and our perspective on how this will impact the reporting landscape, and guidance on how companies can best prepare (and benefit) from this inevitable shift.

Please contact Jennifer.Clipsham@anthesisgroup.com for further information.

[1] Source: http://csr-reporting.blogspot.ca/2015/06/will-gris-new-strategy-work.html