The Global Reporting Initiative recently released its new sustainability reporting guidelines, to be known as G4. It is hoped that reporting will now focus on what is most important to the reporting organization and to its different stakeholders, and reduce the reporting burden for issues not considered material. Indeed, the word material is at the heart of the G4 guidelines where the scope of what must be reported is ascertained through a materiality assessment.
For those familiar with the G3 and G3.1 guidelines, you will notice that the reporting levels (A, B or C) have gone. Now, to be reporting “in accordance with” the guidelines, you can either produce a core report or a comprehensive report. A core report will include a shortened list of standard disclosures, especially on governance, and a single indicator is sufficient for each aspect deemed material. A comprehensive report will include all standard disclosures and all indicators for each material aspect.
Note that for industries for which sector supplements have been published, all material aspects in the sector supplement must also be reported on. GRI is converting the existing sector supplements to work with G4 over the course of the next few months.
In keeping with the “is it material?” mantra, the new guidelines also include new emphasis on supply chain. First, in the organization’s profile section, a description of the supply chain must be included, then, where supply chain aspects are material, description of supplier screening and actions to mitigate risks, must be included.
Other significant changes are:
– more detailed guidance on what should be reported in the standard disclosures;
– new disclosures on how the board and senior management are involved in the development and oversight of sustainability policies and their training and competency to provide that oversight (not required for a core report);
– new disclosures on renumeration policies of board members and senior executives,
– new disclosures on ethics and integrity;
– the third party review, while still recommended, will no longer be noted by GRI as a “+” report.
A surprise for those who had reviewed the G4 Exposure Draft last fall, there is no reference to value-chain mapping. However, to complete a materiality assessment that includes the supply chain, something resembling a value-chain map will be essential.
If your organization needs assistance with its materiality assessment or just to get going on its corporate social responsibility reporting, ÉEM would be pleased to help.
Download the G4 Guidelines here.