Introduction to the next generation of GRI Guidelines (G4): How does a global multi-stakeholder network create globally applicable sustainability reporting guidelines? - Dr Nelmara Arbex

Introduction to the next generation of GRI Guidelines (G4): How does a global multi-stakeholder network create globally applicable sustainability reporting guidelines? - Dr Nelmara Arbex
Melbourne, March 2012
Introducing G4: how does a multi-stakeholder network create globally applicable Sustainability Reporting Guidelines? Dr. Nelmara Arbex, Deputy Chief Executive, “Guidance, Support and Innovations area”
Global Reporting Initiative
GRI: a network organization *Business Academia *Civil Society *Mediating institutions Governments *Labor *Financial markets
GRI: a network organization • Governance Bodies – BoD, SC, TAC • Secretariat, Focal Points and Ambassadors • Organizational Stakeholders • Governmental Advisory Group • Training partners and training participants • Project sponsors • Content development partners • Strategic Alliances
The sustainability challenge How can business be profitable and contribute to solutions at the same time?
Managing change “What you can’t measure, you cannot manage. What you can’t manage, you cannot change.” Peter Drucker Writer, professor and management consultant
GRI Sustainability Reporting Guidelines and the Sector Supplements!
The G3 Guidelines • Reliability, Accuracy, Timeliness, Clarity, Comparability, Balance • Materiality • Stakeholder Inclusiveness • Completeness • Sustainability Context Profile
What is sustainability reporting? • Economic, environmental, social performance information and governance aspects related to sustainability • Multi-stakeholders focused • Continuous improvement
How the GRI network does it? Through a “Due Process” ! SC + WG TAC BoD BoD Public Public Comment Comment Period Period
Are companies using GRI guidance?
Different sources • 2010 - Bloomberg projects that over 4500 reports are “based” on GRI Guidelines • 2011 - KPMG last “International Survey on Corporate Sustainability Reporting” : 80% of G250 and 69% of N100 (3400 companies) use the GRI Guidelines
GRI reports identified by GRI - 1999-2011* 2500 2000 1913 1515 1500 1430 1121 1000 715 524 500 378 280 148 166 126 11 44 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 *Sustainability Disclosure Database data from 1 February 2012
Identified Integrated GRI Reporting* 2010 & 2011 2010 2011 21% 13% Not integrated Integrated 87% 79% n = 1913 n = 2267 *Sustainability Disclosure Database data from 1 February 2012
If you would take a picture of current sustainability reporting field, you would see…
Future reporting context • Demand for sustainability performance information is increasing – also from regulators • Metrics is not coherent/harmonized • Lack of precision - leads to high reporting and verification costs • Most reports lack material focus • Information in pdf of other unfriendly formats • “Integrated Reporting” is a trend
G4 Objectives • To be user-friendly for beginners and experienced reporters • To improve the technical quality, clearer definitions • To align with other reporting frameworks • To offer guidance which leads to material reports (“materiality”) • To offer guidance on how to link the sustainability reporting and Integrated Report - aligned with IIRC • To provide support to improve data search (XBRL)
G4 timeline 2011 2012 2013 MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN Launch May 2013!!! Text Revision / Editing Task Force Working Working Governance Public Comment Working Groups Public Comment Bodies give Preparatory Stage Groups Groups Final Edit LAUNCH Period 1 Meet Period 2 Final Vote Formed Meet MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN 2011 2012 2013
Considering this context and G4 Objectives, how would the network recommend GRI to proceed? First G4 PCP August/November 2011
Participants by region & constituency groups Financial Civil Society Markets & Mediating Business Labor Total Organization Information Institution Users Total 527 166 79 12 1050 1834 AFRICA 21 5 2 - 36 64 ASIA 96 31 12 - 178 317 EUROPE 232 62 29 8 413 744 LATIN 84 26 16 2 215 343 AMERICA NORTHERN 71 34 17 1 143 266 AMERICA OCEANIA 23 8 3 1 65 100
G4 PCP - Participants Total 1834 Constituency Regional Breakdown Breakdown AFRICA 3% OCEANIA 5% ASIA Business NORTHERN 17% 29% AMERICA 15% Mediating LATIN Institution Civil Society AMERICA 57% Organization 19% 9% EUROPE 41% Financial Markets & Information Labor Users 1% 4%
Participants by reporting relationship Latin North Total Africa Asia Europe Oceania America America N= 1834 64 317 744 343 266 100 % % % % % % % Reporter 41 44 41 42 37 41 44 34 31 37 31 41 34 25 Consultant Assurance 11 14 19 9 12 8 7 Report 37 28 35 34 43 45 39 reader Other 17 16 12 16 15 23 24
Main findings 1. Which elements stakeholders would like to see covered as a minimum in a sustainability report Q10 (1714) 2. GRI should define and “recommend” a set of topics and indicators per sector - Q16 (1715), Q17 (1407), Q13 (879) 3. GRI G4 should offer guidance on how to link sustainability reporting and IR - Q20 (1693) 4. Topics – top 6: Business Ethics, Greenhouse Gas Emissions, Eco-Innovation, Life Cycle Assessment, Water, Biodiversity, - Q22 (1683)
Main findings Other important highlights 1. “minimum requirements for a GRI report” - coherence throughout the stakeholder groups and regions (strategy overview, material impacts, risks, material indicators) with small divergence – Q10. This results will help shaping G4 Application Levels. 2. The survey attracted an important number of opinion makers. E.g. from labor: AFL-CIO, from north America; Council of Global Unions, ITF, TUAC-OECD from Europe
G4 – SIX main work streams 1. Technical standardization – Editing Task Force 2. Profound revision of parts of G3(G3.1) or new content proposals – WG 3. Harmonization (and references updating) – Secretariat and TAC 4. G4 online 5. XBRL – GRI Taxonomy for G4 6. Sector guidance in G4
1. Technical Editing Task Force “…to improve the technical quality of the GRI Guidelines, by introducing clear descriptions of what is expected to be disclosed and alignment with well established standard practices.” The technical improvement will enable reports to be more technically robust, resulting in improved reporting processes, data gathering and auditing
1. Technical Editing Task Force “…to improve the technical quality of the GRI Guidelines, by introducing clear descriptions of what is expected to be disclosed and alignment with well established standard practices.” The technical improvement will enable reports to be more technically robust, resulting in improved reporting processes, data gathering and auditing G4
2. Profound revision of parts of G3(G3.1) or new content proposal - WG • Disclosure on management approach • Governance • Boundary • Application Levels • Supply Chain
2. Profound revision of parts of G3(G3.1) or new content proposal - WG • Disclosure on management approach • Governance • Boundary • Application Levels • Supply Chain • Inclusions and updates: Biodiversity, GHG, H&S, Corruption and five others (to be announced soon!!!)
2. Profound revision of parts of G3(G3.1) or new content proposal - WG • Disclosure on management approach • Governance • Boundary • Application Levels G4 • Supply Chain • Inclusions and updates: Biodiversity, GHG, H&S, Corruption and five others (to be announced soon!!!)
3. Harmonization (and reference updating) – Secretariat and TAC • Selection of documents, reporting metrics and other materials to be included in the Guidelines as references • Guarantee that the final content is harmonized with main international reporting guidance (UNGC, OECD, etc.)
3. Harmonization (and reference updating) – Secretariat and TAC • Selection of documents, reporting metrics and other materials to be included in the Guidelines as references • Guarantee that the final content is harmonized with main international reporting guidance (UNGC, OECD, etc.) G4
3. Harmonization (and reference updating) – Secretariat and TAC • Selection of documents, reporting metrics and other materials to be included in the Guidelines as references • Guarantee that the final content is harmonized with main international reporting guidance (UNGC, OECD, etc.) • Guarantee connection to IIRC framework development
3. Harmonization (and reference updating) – Secretariat and TAC • Selection of documents, reporting metrics and other materials to be included in the Guidelines as references • Guarantee that the final content is harmonized with main international reporting guidance (UNGC, OECD, etc.) • Guarantee connection to IIRC framework development IR G4
4. G4 on-line • To offer G4 also in a web based format • To make easier for beginners and experienced companies to follow GRI Guidance and define the content in their GRI report • To offer templates (to the ones interested in templates) • To offer link to data tagging systems • And more… GRI is looking for sponsors for this part of the project. Ideas?
4. G4 on-line G4 • To offer G4 also in a web based format • To make easier for beginners and experienced companies to follow GRI Guidance and define the content in their GRI report • To offer templates (to the ones interested in templates) • To offer link to data tagging systems • And more… GRI is looking for sponsors for this part of the project. Ideas?
5. G4 – GRI XBRL taxonomy • GRI Taxonomy for G3(G3.1) launched in March – Launched a Voluntary Filing Program – GRI is looking for companies willing to tag their sustainability data using the GRI Taxonomy • This is the base for G4 XBRL version (and will help to improve technically G4 definitions)
G4 web-enabled ! G4
6. Sector guidance in G4 • To offer specific guidance on material topics/aspects to be reported per sector (GICS - 64) • It starts with research on currently identified material topics (current SS and other sources) • GRI will collaborate with organizations with focus on such analysis • Publish findings for Public Comment in May 2013 (details and timeline to be announced soon)
G4 timeline 2011 2012 2013 MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN We are here Launch May 2013!!! We are here! Revision / Editing Task Force Text Working Working Governance Public Comment Working Groups Public Comment Bodies give Preparatory Stage Groups Groups Final Edit LAUNCH Period 1 Meet Period 2 Final Vote Formed Meet MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN 2011 2012 2013
The G3 Guidelines • Reliability, Accuracy, Timeliness, Clarity, Comparability, Balance • Materiality • Stakeholder Inclusiveness • Completeness • Sustainability Context Profile
From G3(G3.1) to G4 G3(G3.1) G4
The G4 team Melbourne, March 2012
The G4 team NA – design and strategy AH - implementation Technical New content Sector G4 Digital Guidelines Related Editing TF and Harmoniz. Guidance Publications (3) A vd H BB TB AA+IV tbd PCP, Events and Communications and Network team, Governments team Dissemination Venue, Date
TETF • Coordination: Alice • Experts: Roger Adams (ACCA), John Purcell (CPA), Kerstin Simpson (Net Balance) Melbourne, March 2012
Working Groups - Team • Content Development Working Group Coordinators support Disclosure on Management Approach Anna, Jennifer Amina Governance and Remuneration Anna Amina Supply Chain Disclosure Laura Amina Boundary Anna Karlien, Sylvia Minimum Requirements / Application Katja Maggie, Level Amina & ... Jack (editor) supporting all 5 Working Groups
Harmonization - Team Contents UN Global Compact Anouk OECD Anouk ISO Laura Proposal References in G4 Anouk, Maggie and Amina IIRC Anouk, Nelmara Other Anouk
The sustainability challenge
www.globalreporting.org To know more about G4 developments, go to GRI’s website and read the newsletter!
First PCP and Topics
Results Topics PCP Online Offline Total 1 Business Ethics. 1111 1111 2 Greenhouse Gas Emissions. 909 909 Shortlised 3 Eco-innovation. 741 741 based on 4 Life Cycle Assessment (LCA). 741 741 Primer Survey 5 Water. 690 690 Results / 6 Biodiversity. 606 606 Possibility 7 to vote in Remuneration and performance-based pay. 539 539 PCP 8 Chemicals of Concern. 438 20 458 9 Plastics, Packaging and Waste. 387 387 10 High Impact Event Management and Preparedness. 337 337 11 Green Building Practices. 320 320 12 Disabled Persons. 286 286 Added in 13 OHS 158 61 219 PCP by 14 Children's Rights 4 80 84 participan ts 15 Supply Chain Sustainability Management and Performance 47 47 16 Community Impacts and Development 19 19 17 Animal Rights & Welfare 17 2 19 Topics that scored less than 10 were not included in this list
New topics or update suggestions • Already to be covered by WG or “references updating and harmonization” • To be addressed under “sector” guidance • There is no mature international discussion on how this topic could be reported on • There is mature international discussion on how this topic should be reported on
XBRL
G4 timeline 2011 2012 2013 MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN We are here Text Revision / Editing Task Force We are here! Working Working Governance Public Comment Working Groups Public Comment Bodies give Preparatory Stage Groups Groups Final Edit LAUNCH Period 1 Meet Period 2 Final Vote Formed Mee t MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN 2011 2012 2013 GRI XBRL taxonomy and GRI voluntary filling program Abu Dhabi , March 2012
GRI Taxonomy development process Exposure draft Final release Build, review & test taxonomy review Public comment update period update jun-11 jul-11 aug- sep- oct-11 nov- dec- jan-12 feb-12 mar- 11 11 11 11 12 Credibility of development process: • Fully documented architecture • Quality review by the Taxonomy Review Team (experts from software providers, assurance providers, investors, reporters, standard bodies) • Public Comment Period • Aligned with taxonomy development approaches used by financial accounting standard bodies (IASB, FASB and EDINET) More on Thursday, 11:45 am, Taxonomy Summit, Paul Hulst
Voluntary Filing Program What? Showcase of XBRL reports (instances) created Why? To help sustainability reporters use the GRI Taxonomy by providing examples and to acknowledge them For whom? Organizations that use the GRI Taxonomy Contact XBRL@GlobalReporting.org Abu Dhabi , March 2012
GRI’s sustainability reporting framework is covered by the GRI Taxonomy •GRI’s sustainability reporting framework: GRI Taxonomy Webinar – March 5 2012
Size of the GRI Taxonomy Extended Link Number of disclosures in Number of checks in Number of concepts G3 Guidelines G3 Checklist in G3 Taxonomy Content index n.a. n.a. 210 Strategy and Profile disclosure 42 140 241 Economic category 9 53 124 Environmental category 30 111 385 Labor Practices and Decent Work category 14 49 204 Human Rights category 9 25 71 Society category 8 26 73 Product Responsibility category 9 35 116 Attachments n.a. n.a. 9 Total 121 439 1433 59 GRI Taxonomy Webinar – March 2012
The GRI Taxonomy – an example •GRI’s sustainability reporting framework: GRI Taxonomy Webinar – March 6 2012
Every reportable data element is included in the GRI Taxonomy •GRI’s sustainability reporting framework: Every reportable data element has • a unique tag • data type definition • labels, multiple languages and types • a reference to its location in the GRI Guidelines GRI Taxonomy Webinar – March 6 2012
GRI Report as an XBRL instance <xbrli:context id=“Y10-11"> <xbrli:entity> XBRL <xbrli:identifier scheme="http://www.kvk.nl/kvk-id">40346342</xbrli:identifier> instance </xbrli:entity> <xbrli:period> <xbrli:startDate>2010-06-01</xbrli:startDate> <xbrli:endDate>2011-05-31</xbrli:endDate> </xbrli:period> </xbrli:context> <gri-c:NetRevenues decimals=“-6" contextRef=“Y10-11" unit=“EUR">632700000</gri-c:NetRevenues> GRI Taxonomy Webinar – March 6 2012
GRI Taxonomy development process In cooperation with Deloitte Netherlands. Exposure draft Final release Build, review & test taxonomy revie Public w comment updat period update e jun-11 jul-11 aug- sep- oct-11 nov- dec- jan-12 feb-12 mar- 11 11 11 11 12 Credibility of development process: • Fully documented architecture • Quality review by the Taxonomy Review Team (experts from software providers, assurance providers, investors, reporters, standard bodies) • Public Comment Period • Aligned with taxonomy development approaches used by financial accounting standard bodies (IASB, FASB and EDINET) 63 GRI Taxonomy Webinar – March 2012
How GRI Taxonomy adds value to the reporting process Easy access to timely reliable, and comparable data Prepare Quickly generate data template for different Automatic generation of stakeholder conversations the report Report Connect Mapped data source with clear definition Data in comparable format Monitor Define Complete overview of data Data in measurable availability format 64 GRI Taxonomy Webinar – March 2012
How to get started 1 understand • Obtain knowledge of XBRL • Select XBRL software tool(s) GRI GRI • Understand the GRI Taxonomy Taxonomy Report • Map sustainability report to the GRI Taxonomy 2 tag • Tag content index to the GRI Taxonomy • Tag facts and statements in the sustainability GRI apply GRI report to the GRI taxonomy Taxonomy tags Report 3 submit • Review and validate instance document XBRL • Submit XBRL report to GRI Instance GRI 65 GRI Taxonomy Webinar – March 2012
Reporting process with the Voluntary Filing Program Taxonomy Reporting Taxonomy Framework Instance file Data Reporters consumers GRI Voluntary Filing Program 66 GRI Taxonomy Webinar – March 2012
Focus for profound revisions • Disclosure of management approach • Governance and ethics • Boundary • Minimum level of disclosure required • Supply Chain • Revision - topics: Biodiversity, GHG, H&S, Corruption, among many others And… more on material topics per sector! Amsterdam, March 2012
Other publications
Support publications • Topics • Reporting practices • Tools Venue, Date
Linkage documents • Guidance for using GRI Sustainability Reporting Framework in combination with other frameworks • UNGC, ISO26000, CDP, Earth Charter Venue, Date
Learning Series • Starting points • Pathways • Explorations Venue, Date
GRI Database – Feb 2012
Sustainability Disclosure Database January 2012 Usage Stats
GRI Reporting by Guidelines* 2011 8% GRI - G3 GRI - G3.1 92% n = 1279 *Sustainability Disclosure Database data from 1 February 2012
GRI Reporting by Application Level* 2010 & 2011 2010 2011 10% 22% 20% 23% A+ A B+ 21% 8% B C+ 10% 18% C 11% 4% Undeclared 11% 5% 16% 21% n = 1911 n= 1266 *Sustainability Disclosure Database data from 1 February 2012
Application Level Declaration by GRI Report Type* 2011 100% 90% 80% 70% Undeclared 60% C C+ 50% B 40% B+ A 30% A+ 20% 10% 0% GRI - G3 GRI - G3.1 n = 1106 n = 105 *Sustainability Disclosure Database data from 1 February 2012
GRI Reporting by Application Level Declaration Status* 2010 & 2011 2010 2011 32% 31% 39% GRI-checked Third-party-checked 52% Self-declared 17% 29% n = 1503 n = 1283 *Sustainability Disclosure Database data from 1 February 2012
Application Level Declaration by Status* 2010 2010 & 2011 2011 400 400 350 350 300 300 250 250 Self-declared 200 200 Third-party-checked GRI-checked 150 150 100 100 50 50 0 0 A+ A B+ B C+ C A+ A B+ B C+ C *Sustainability Disclosure Database data from 1 February 2012
Linkages to Other Initiatives* 2011 No linkages to other initiatives Link to at least 1 other initiative 40% n = 1283 60% UNGC Not referenced Referenced ISO 26000 CDP 9% 23% 41% n = 1200 n = 1200 n = 1197 59% 77% 91% *Sustainability Disclosure Database data from 1 February 2012
GRI Reporting by Sector* 2010 & 2011 500 450 400 350 300 250 200 2010 150 2011 100 50 0 *Sustainability Disclosure Database data from 1 February 2012
GRI Reporting by Supplement Use* 2011 100% 90% 80% 70% 60% 50% Reports from sector (not using SS) 40% Reports for sector using SS 30% 20% 10% 0% Financial Electric Mining and Food Processing NGO Services Utilities* Metals n = 146 n = 64 n = 48 n = 46 n = 26 *Sustainability Disclosure Database data from 16 January 2012
GRI Reporting by Organization Type* 2011 6% 3% 0% 3% Publicly listed 10% Private (non-listed) State-owned 51% Cooperative Non-profit 27% Partnership Public institution n = 1033 *Sustainability Disclosure Database data from 1 February 2012

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Introduction to the next generation of GRI Guidelines (G4): How does a global multi-stakeholder network create globally applicable sustainability reporting guidelines? - Dr Nelmara Arbex