The GRI G4 Reporting Guidelines are on their way to becoming a ‘Standards’ for reports published from January 2018 onwards. Our Senior Consultant Saskia Jung attended the 5th Global GRI Conference in May this year and was able to provide early feedback on drafts of the standards, which will be finalised in October 2016.
The G4 guidelines are in transition mode to becoming ‘Standards’, and although this can sound daunting, it really is not. The main content and concepts have been carried over. One of the biggest changes is that the Standards will be modular and evolving, i.e. new topics or clarifications will be added to the existing ones more easily, without introducing a complete new version (that is why these are ‘Standards’ and not ‘G5’). The guidance has overall been strengthened, many changes are structural with some content from G4 being relocated or merged, to make it easier to find and navigate. The merging has resulted in the total number of topics being brought down from 46 to 33.
There are currently 33 topic-specific Standards drafts, organized in three series: a) Economic topics (400 series) – this includes the G4 Aspects from the Economic Category, plus Anti-corruption and Anti-competitive behaviour b) Environmental topics (500 Series) – this includes most G4 Aspects from the Environmental Category c) Social topics (600 Series) – this includes most G4 Aspects from the Social Category. The sub-categories under Environment, Health and Social have been removed.
There are changes in terminology, format and presentation, ultimately improving clarity to make these easier to understand and apply. For terminology for example, each standard will now be called an SRS (Sustainability Reporting Standard), previous ‘Aspects’ are now called ‘Topics’, ‘Shall’ means mandatory instructions i.e. the company is required to disclose to be in accordance, ‘Should’ means it is advised to disclose but it is not a requirement, and ‘Guidance’ means additional, helpful information.
What are the main changes and how will they affect you as a reporting company? If you are already a G4 reporter, the changes are limited.
- Companies have to apply all Reporting Principles (previously covered in G4-18) and comply with all applicable reporting requirements;
- The main elements of materiality remain the same as the centre piece of a company’s sustainability report, as they were in G4;
- Emphasis on the management approach (previously called DMA) has been taken further, for each material topic, the purpose of the management approach has to be reported, and a description of each of the components used to manage the topic (e.g., policies, specific actions);
- Boundary: This topic has been further clarified, so that topic ‘Boundary’ relates to a description of which entities cause the impact related to a material topic, wherever the impact occurs, and not just whether the impacts occur inside or outside of the organisation. Simply put, companies are required to disclose material impacts along their entire value chain.
- Impacts: this term has been clarified, and in the context of the GRI Standards, unless otherwise stated, ‘impact’ refers to an organization’s impact on the economy, the environment, and/or society – in other words, the organization’s contribution (positive or negative) to sustainable development.
- GHG Emissions: The details on how to report Energy Indirect (Scope 2) GHG Emissions have been specified.
- Worker / Employee: clarification for this term has been provided. Any indicators referring to workers should not only include employees, but also interns, apprentices, self-employed persons, and in general persons working for the organizations.
Some items have been moved around in where they are placed. A few Aspects have been merged (e.g. SRS 614: Supplier social assessment combines the three assessments for labour, human rights and society). Some disclosures have been relocated or combined (e.g. G4-57 and G4-58 on ethics and integrity have been combined). Some Aspects have been discontinued, with their content incorporated elsewhere (e.g. Transport).
Sector Disclosures are still very much there to supplement the GRI Standards, but in the new Standards they are referenced as guidance, not as a requirement. And the GRI Content Index is more outcome based and is no longer required in a particular format such as a table. It can also be put online, apart from the printed report.
We have managed to outline the major changes for you to give you a flavour of what is to come. Let us know if you want to know more. And stay tuned – we will update you when the Standards are confirmed, and any important news till then.