As the private sector increasingly takes on greater leadership in helping to create a more sustainable world—as is taking place through the implementation of the recent Paris climate negotiations and the UN Global Goals for sustainable development, for example—more companies are disclosing on sustainability performance. But as more firms embrace sustainability reporting, and new developments in regulations and reporting practices emerge, sustainability reporting frameworks must continue to evolve.
In an effort to enhance the clarity and uptake of sustainability reporting worldwide, the Global Reporting Initiative (GRI) recently released its final set of Sustainability Reporting Standards (Standards) in November 2016, marking the next phase of GRI reporting. As the most commonly used framework for sustainability disclosures, this is a change any company reporting or considering doing so will want to make note of.
What are Standards?
The GRI is in the midst of restructuring its reporting framework from iterative guideline releases (as with G3 and G4, for example) to a set of modular, interrelated Standards. While this may seem a minor distinction in terms of language, it actually represents a significant operational shift. This restructuring means that parts of the Standards can be updated independently without requiring a new release of the whole set, which usually sets off a flurry of activity and can involve a steep learning curve. Ultimately, as reporting practices evolve, the new Standards will allow for a smoother implementation process for organizations using the GRI.
Another big change so soon after the G4?
Not exactly. The Standards are largely based on the G4, for now, and will not require as radical of a transition as many companies experienced when moving from G3 to G4. Even though the Standards are coming so closely on the heels of the G4 Guidelines, the main concepts from G4 are carried through, including the emphasis on reporting material topics only. In fact, the restructuring of the Standards has the potential to streamline an organization’s current GRI G4 adherence. By reducing some of the G4 pain points, the Standards provide clearer topic guidance and reduced duplication among the requirements.
What changes will we see in the topics?
As reporting practices evolve and new issues emerge, the Standards will allow for existing topics to be updated and new topics to be added. The first two Standards the GRI will be revising in 2017 include the topics on Water and Occupational Health and Safety.
Here are some of the key changes to note:
- Dropping G4-specific language, such as changing terminology from “Aspects” to “topics”
- General Standard Disclosures and Specific Standard Disclosures have been replaced with three universal standards and 35 topic-specific standards
- Sector Supplement guidelines are no longer required for “in-accordance”
- Clearer guidance on how to base a report on some of the Standards, e.g. SRS-referenced
- A specific table format is no longer required for the content index
As part of the transition to the Standards, the GRI has made significant governance changes in the past year. The Due Process Protocol was established as the guideline for setting, revising and maintaining the Standards. An independent standard-setting body, the Global Sustainability Standards Board (GSSB), will oversee and approve the development of the Standards.
Overall, the GRI’s restructuring of the Standards provides reporters with less repetition and a clearer, more logical arrangement of the content. While the G4 Guidelines will remain valid through July 1, 2018, early adopters of the Standards will benefit from the streamlined approach, allowing reporters to incorporate more naturally the GRI into their report narrative and structure.
To track the GRI Standards and other ESG disclosure frameworks check out our Sustainability Disclosure and Rankings Almanac.
For more information about how Standards might impact your reporting plans, or any other disclosure framework questions, feel free to contact KT Michaelson for a complimentary consultation.