Here come the Standards!
By Jackie Allender, Senior Consultant, ACCSR
There’s a lot to like about the new GRI Standards, which were released yesterday.
For one thing, they clarify a few areas that had caused a bit of reporting angst. And they keep the things that were really good about the G4 Sustainability Reporting Guidelines, such as the strong focus on materiality, and the emphasis on organisations taking responsibility for their impacts up and down the value chain.
The Standards will entirely replace the G4 guidelines for those producing a sustainability report from 1 July 2018.
As a GRI certified trainer, I’ve long noted the difficulty my students had in grappling with some of the concepts in G4, and some of the terminology. I’m sure GRI received plenty of feedback about these areas.
Under the Standards most of these issues appear to have been addressed.
No longer do we have to explain ‘GRI jargon’ such as ‘Aspects’ and the difference between GRI Aspects and other material issues. Now we can just use the much easier term ‘topics’ to refer to both material issues covered in the GRI Standards and those not covered by the Standards.
The other big issue that has been addressed in the Standards relates to the Boundaries for those topics.
The concept of Boundaries was introduced in G4 to ensure that for each material issue, organisations reported on their impacts wherever those impacts occurred, inside or outside the organisation (i.e. all along the value chain). The idea was to prevent significant economic, environmental or social impacts being ignored because they were not ‘directly’ caused by an organisation.
Just exactly how the Boundary was supposed to be reported under G4 was a little unclear. Some reports just noted that their impacts occurred ‘inside and outside our organisation’ – not particularly helpful!
So now GRI has provided better guidance which requires reporters to explain not only where the impacts occur, but also their organisation’s involvement with the impacts.
The Standards also clear up another area of difficulty – where impacts occur beyond the organisation (i.e. the Boundary for the material issue is somewhere outside of the organisation). Countless clients have complained to me that they simply did not have access to the data required to report on many impacts outside of their company, especially areas where they had no influence or leverage.
In cases like this, it is now possible to report the management approach for the topic and to provide a recognised reason for omission of the other data.
Another area that the Standards clear up – and a personal bugbear of mine – is the misconception that impacts were about impacts on the organisation. That meant reporters were defining their material issues according to how significant the impacts were on their organisation.
The new definition is that ‘impact’ “refers to the effect an organisation has on the economy, the environment, and/or society, which in turn can indicate its contribution (positive or negative) to sustainable development.” It specifically notes that impacts can be positive, negative, actual, potential, direct, indirect, short-term, long-term, intended or unintended and can also be related to consequences for the organisation itself. Whew – I think that covers it!
Many reporters will also be relieved that GRI has cleared up confusion around the terms ‘workers’ or ‘employees’ and that they are no longer required to report such detailed data on contractors – but they must state whether substantial portions of work are carried out by people who are not direct employees. This change acknowledges that many organisations simply don’t keep or have access to detailed data about their contractors’ employees, while also ensure they recognise the duty of care they have for those workers.
The Standards can be broken down into three universal standards that apply to all reporters who want to be ‘in accordance’. GRI 101 is about how to use the standards. GRI 102 contains General Disclosures which roughly map to the old General Standard Disclosures) and GRI 103 contains advice about compiling the Management Approach (the old DMAs under G4).
These are used in conjunctions with a set of topic-based standards (33 in all) organised into Economic, Environmental and Social categories. Reporters use only the relevant topic-specific standards that relate to their material issues, just like the Specific Standard Disclosures in G4.
A more detailed reading of the Standards shows some former G4 disclosures have been merged, and some have been moved to new areas. A ‘mapping document’ is available on the GRI website to show all these changes, which is a great move.
Finally the layout and content of the standards is much easier to follow.
There’s no need to skip between two large books to understand what you need to report on; guidance that was formerly in the Implementation Manual is part of the guidance provided for each standard. Bolded text shows the data that is mandatory to respond to each disclosure. That’s followed by reporting recommendations which are designed to encourage best practice. Guidance is then included to help organisations better understand and report on requirements.
This quick assessment gives the new GRI Standards the thumbs up. We’ll be interested to see the reaction of reporting organisations over the coming weeks, and how quickly the Standards are taken up.
Jackie Allender is a Senior Consultant with ACCSR specialising in sustainability reporting.