It would be hard to find anyone in the world of corporate sustainability that made it through the end of October without hearing about the launch of GRI’s new Standards. GRI itself is heralding the move as introducing the “first global sustainability reporting standards,” and asserting that the newly branded Standards “will enhance corporate transparency world wide”(1). GRI is going big and bold, at least with the launch and release.
The Standards themselves are comprised of a collection of three required, universal Standards and thirty-three discretionary, topic-specific Standards. GRI’s Aspect/Indicator nomenclature has been reworked, along with the former GRI G4 Implementation Manual. The format of GRI’s new supporting documentation is more flexible; existing as separate PDFs for each individual Standard (still with multiple disclosures per Standard), and as a single PDF of all Standards together: Consolidated set of GRI Sustainability Reporting Standards.
For each topic-specific disclosure within a standard the guidance for each topic-specific Standard itself has been revised to more clearly explain the reporting requirements and to provide recommendations on compiling that information. A tricky little insert in the DMA also allows companies to substitute alternate, applicable disclosures if a topic is material but GRI’s disclosures don’t quite hit the mark.
How did the GRI do?
Overall, there is a lot to be excited about with the new GRI Standards. Their revamped modular structure is forward thinking, both for the GRI and for companies in crafting their reports. For future iterations, each topic specific standard can be individually updated. This means less work for the GRI, and will be reassuring to those fearing another round of updates or jaded by the not-so-faded memory of making the transition to the G4 from G3.
Clearer guidance notes! Everyone wins. Each topic-specific disclosure clearly spells out what is required by the GRI for reporting, any additional items or compilation notes that are recommended to include, and background information about definitions, where the information could be found, and the relevance of why it is being asked in the first place. For more analysis and nitty-gritty detail of how nomenclature and topics/aspects have shifted, explore this blogpost.
“The first global sustainability reporting standards”
Biggest question lies around terminology: “STANDARDS”. GRI has updated how it’s disclosures are organized and has clarified the guidance around response compilation, but what remains unclear is whether they really are the first global sustainability reporting standards? Yes, they have established the new Global Sustainability Standards Board (GSSB) to decide what a standard is, which objectively created the GRI Standards, but it takes more than just a name change to really be globally accepted as a true standard.
Now, GRI is offering a whole slew of introductory webinars, holding kickoff events world wide, and providing global training sessions. It is easy to see GRI’s motivation, there has been pressure building within the reporting community for unification and the GRI, with the Standards, is attempting to meet this real need. GRI’s G4 quickly became the most widely used reporting framework after its release, so it makes sense that they are leading the charge in moving toward truly global standards.
How far does this really get us?
Standards can only do so much. Companies will still need to address items of specific concern to their operations asked by other assessment tools such as the Access To Medicine Index and Ethisphere’s World’s Most Ethical Companies survey. Companies may also wish to include this sort of information in their sustainability report, so the gap between universal and specific data to report persists, and is not aided by the new standards.
Materiality also remains a sticky issue. Although multiple players (<IR>, GRI, SASB) agree that materiality matters (it even makes an appearance in the Dow Jones Sustainability Index assessment by RobecoSAM), the materiality process continues to be defined with inconsistent and varying methodology. This trend of conflicts and inconsistencies perseveres down to details such as which stakeholders should be included and what definition of “material”/ “materiality” companies should utilize in making their assessment.
Questions remain. Thus far it has been stated that sector disclosures are not required to be in accordance (but they don’t exist yet), so one may expect to see this change in the foreseeable future.
Branding it as this huge shift, ultimately, the actual changes are rather small. This may be a good thing though, considering the large amount of disruption at work in the CSR space, generally. This much is clear: if GRI is to succeed in bring about a cultural shift, it will need to continue to work collaboratively with companies and other survey frameworks to foster a new kind of buy-in and market mandate. These changes move the ball forward, but there remains a long way to go.