Global Reporting Initiative
|This article is outdated. (May 2015)|
|Founded||1997 Boston, United States|
Deputy Chief Executive
Director Marketing & Communications
|Rashmi van de Loenhorst|
|Secretariat (administrative office) elected by the Annual General Meeting|
|Affiliations||OECD, UNEP, United Nations Global Compact, ISO|
|Global Reporting Initiative|
The Global Reporting Initiative (known as GRI) is an international independent standards organization that helps businesses, governments and other organizations understand and communicate their impacts on issues such as climate change, human rights and corruption. Founded in 1997, GRI is a non-profit organization with its Secretariat in Amsterdam, the Netherlands. GRI produces one of the world's most widely used standards for sustainability reporting; also known as ecological footprint reporting, environmental social governance (ESG) reporting, triple bottom line (TBL) reporting, and corporate social responsibility (CSR) reporting.
As of 2015, 7,500 organizations used GRI Guidelines for the sustainability reports. GRI Guidelines apply to multinational organizations, public agencies, smaller and medium enterprises, NGOs, industry groups and others. For municipal governments, they have generally been subsumed by similar guidelines from the UN ICLEI.
The GRI is an example of an organization that acts outside of the top-down power command structures associated with government (e.g., quasi-autonomous bodies and regulators). Environmental governance is the multifaceted and multilayered nature of "governing" the borderless and state-indiscriminate natural environment. Unlike major protected policy areas such as finance or defence, the environment requires sovereign states to sign up to treaties and multilateral agreements in order to coordinate action. Sustainability reporting is a more recent concept that encourages businesses and institutions to report on their environmental performance.
The GRI was formed by the United States based non-profits Ceres (formerly the Coalition for Environmentally Responsible Economies) and Tellus Institute, with the support of the United Nations Environment Programme (UNEP) in 1997. It released an “exposure draft” version of the Sustainability Reporting Guidelines in 1999, the first full version in 2000, the second version was released at the World Summit for Sustainable Development in Johannesburg — where the organization and the Guidelines were also referred to in the Plan of Implementation signed by all attending member states. Later that year it became a permanent institution, with its Secretariat in Amsterdam, Netherlands. Although the GRI is independent, it remains a collaborating centre of UNEP and works in cooperation with the United Nations Global Compact.
A member of the board of the Dutch National Contact Point (NCP) of the OECD Guidelines for Multinational Enterprises. Herman Mulder was appointed as a Chairman of the GRI in 2011. In the past Mr Mulder was a senior executive vice-president at ABN AMRO, and is now a chairman of the True Price.
Governance of the GRI
The “GRI” refers to the global network of many thousands worldwide that create the Reporting Framework, use it in disclosing their sustainability performance, demand its use by organizations as the basis for information disclosure, or are actively engaged in improving the standard.
The network is supported by an institutional side of the GRI, which is made up of the following governance bodies: Board of Directors, Stakeholder Council, Technical Advisory Committee, Organizational Stakeholders, and a Secretariat. Diverse geographic and sector constituencies are represented in these governance bodies. The GRI headquarters and Secretariat is in Amsterdam, Netherlands.
GRI reporting guidelines
Standards for guidelines
Framework in the GRI aims to enable third parties to assess environmental impact from the activities of the company and its supply chain The standardized reporting guidelines concerning the environment are contained within the GRI Indicator Protocol Set. The Performance Indicators (PI) includes criteria on energy, biodiversity and emissions. There are 30 environmental indicators ranging from EN1 (materials used by weight) to EN30 (total environmental expenditures by type of investment).
Sustainability reporting aims to standardize and quantify the environmental, social and governance costs and benefits derived from the activities of the reporting companies accordingly. Some of the examples of the reporting measures to be used would be the quantified results of the CO2 emissions, working and payment conditions, financial transparency and alike.
For the assessment of the social impact created by the reporting organization, GRI standards were created according to international labor practices and the environmental impact by conducting an independent audit. ISO 14010, ISO 14011, ISO 14012 and ISO 26000 set out a standard for assessing the environmental impact, while OHSAS 18001 lays down a health and safety risk management system. For instance, the ILO’s eight core conventions outline specific groups or population that require special attention: women, children, migrant workers and their families, persons belonging to national or ethnic, linguistic, and religious minorities, indigenous peoples, and persons with disabilities. In order to circumvent “greenwashing” or falsified reporting, the financial institution can conduct an independent audit of the investee or enter into a dialogue with the top management of the company in question.
The definition of the sustainability has been ubiquitously applied. One of the views suggests that it termed by some academics 'reflexive environmental law’. Reflexive environmental law is an approach in which industry is encouraged to ‘self-reflect’ and ‘self-criticise’ the environmental externalities that result as a product of their activity, and thus act on these negative social impacts in a way that dually safeguards growth and protects the environment. There is also concern that the "exponential demand for disclosure" would be hard to maintain with solely GRI capacity and adiministration. As of 2015 there are several international agencies with similar objective and their own reportig standards. Amongst the is the United Nations Carbon Disclosure Project which has similar aims as GRI.
GRI’s Data Partners collect and process information about GRI reporting and sustainability reporting in general. They regularly share data with GRI about reports and reporting organizations, and also serve as on-the-ground hubs, identifying reporting trends in their countries and regions. The report and organization related information provided by Data Partners is added to GRI's Sustainability Disclosure Database.
The GRI data partners' analysis of reports show an increase in GRI reporting worldwide. The official GRI data partner in The United States, The United Kingdom and The Republic of Ireland — The Governance & Accountability Institute, releases data tracking frequency and other aspects of GRI reporting in the benchmark S&P 500 and Fortune 500 companies.
Criticisms and controversies
A common criticism of GRI and the GRI guidelines are that the focus is on more reporting, not better reporting or more usable or actionable reporting. GRI's focus has been to continually get governments and stock exchanges to require more organisations around the world to produce sustainability reports, preferably with using the GRI guidelines. The focus on quantity over quality supports the value of GRI's brand but has also resulted many reports that are little more than public relations efforts.
GRI allows reporters to self-declare that they are A, B or C level reporters. The distinction between the letter grades is based on the number of indicators a company choses to report, so C reporter can only report against 10 key performance indicators from the GRI guidelines while an A level reporter should report about 50 indicators. Linking more reporting—of information which may or may not be material in nature to a given organisation—to a better grade is another way that GRI has driven quantity of reporting over quality.
Data quality and audit and assurance of non-financial accounting practices is not a primary focus of GRI. Non-financial audit or assurance is not a required part of reporting in accordance with the GRI guidelines. In addition, while GRI prides itself on its multi-stakeholder approach, investors were not invited to participate in the creation of the guidelines until recently.
While GRI pushes for more reporting, they have done little to increase or even assess the impact of existing sustainability reports. While sustainability reporting is intended to make economic development sustainable in light of planatary limits, in practice, most organisations report performance against their own historical performance, against short-term targets developed internally or against industry best practice.
GRI's Sustainability Context Principle "involves discussing the performance of the organisation in the context of limits and demands placed on environmental or social resources at the sector, local, regional, or global level." However, GRI provides little guidance on how to do this, and most organisations that use the GRI guidelines for sustainability reporting do not report performance in this context.
European Commission Directive
In December 2014, EC has adopted a new directive obliging large multinational corporations to provide non-financial disclosure to the markets. The law applies to public companies with more than 500 employees. Companies that would provide such a reporting would be required to report on environmental, social and employee-related, human rights, anti-corruption and bribery matters. Additionally, these large corporations would be required to describe their business model, outcomes and risks of the policies on the above topics, and the diversity policy applied for management and supervisory bodies. The reporting techniques are encouraged to rely on recognized frameworks such as GRI’s Sustainability Reporting Guidelines, the United Nations Global Compact (UNGC), the UN Guiding Principles on Business and Human Rights, OECD Guidelines, International Organization for Standardization (ISO) 26000 and the International Labour Organization (ILO) Tripartite Declaration.
- Sustainability reporting
- Sustainability accounting
- Triple bottom line
- Integrated reporting
- UN Global Compact
- Mervyn King (judge)
- The Amsterdam Global Conference on Sustainability and Transparency
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- Official site
- Official site of GRI's Exclusive US, UK, and Ireland Data Partner Governance & Accountability Institute
- Global Reporting Initiative profile on database of market governance mechanisms