The Global Reporting Initiative (GRI) was created in 1997 in the wake of the Exxon Valdez disastrous oil spill to create mechanisms that could hold companies accountable for their environmental impact. It has since extended to social and governance as well to encompass ESG issues.
With the first guidelines published in 2000, the GRI Standards formally launched in 2016 and have become an internationally recognized framework reference for ESG reporting. GRI reporting allows organizations to understand and disclose their negative and positive contributions toward sustainable development. Companies can increase transparency and meet stakeholders’ expectations and needs through a common language framework.
Overview Of GRI Reporting Principle-Based Framework
The standards GRI established ensure that companies are not only held accountable for the impacts of their activities but also own the responsibility of managing these impacts, regardless of size and industry.
Universal Standards
Foundation - The foundation principles define report content and quality as the starting point for using the GRI Standards.
General Disclosures - General disclosures report information about the company, including profile, strategy, ethics and integrity, stakeholder engagement, and reporting process.
Management Approach - This is used to report how a company manages material topics and explain why a topic is material, where the impacts occur, and how impacts are managed.
Topic-Specific Standards
Economic Standards
Economic standards include:
- Economic Performance: such as value generated and distributed, financial implications, benefits, and retirement plans
- Market Presence: including entry-level wage by gender compared to local minimum wage and proportion of senior management hired locally
- Indirect Economic Impacts: disclosures on infrastructure investments
- Procurement Practices: specifically, spending on local suppliers
- Anti-corruption: disclosures on risk assessment, training on policies and procedures, and actions taken in case of incidents
- Anti-competitive Behavior: reporting actions for antitrust and monopoly practices
- Taxes: including approach to taxes, tax governance, control, risk management, country-by-country reporting
Environmental Standards
Environmental Standards include:
- Materials: materials used, recycling, reclaimed products
- Energy: internal and external consumption, energy intensity, reduction efforts
- Water and Effluents: water withdrawal, discharge, and consumption
- Biodiversity: including sites owned/managed in or near protected areas, the impact of activities on biodiversity, and on conservation list species
- Emissions: direct and indirect GHG emissions, intensity, emissions of ozone-depleting substances, and other significant emissions.
- Waste: waste generated, and waste disposal (including hazardous waste)
- Environmental Compliance: including sanctions for non-compliance
- Supplier Environmental Assessment: supplier screening using environmental criteria, adverse impacts in the supply chain, and resulting actions
Social Standards
Social Standards include:
- Employment: employee turnover, new hires, benefits to full-time employees vs. part-time, parental leave
- Labor/Management Relations
- Occupational Health and Safety: management systems, work-related injuries, and ill-health
- Training and Education: training programs, transition programs, career development
- Diversity and Equal Opportunity
- Non-discrimination: incidents and corrective actions
- Freedom of Association and Collective Bargaining with operations and suppliers
- Child Labor and risks in the supply chain
- Forced or Compulsory Labor
- Security Practices: training security personnel in human rights policies and procedures
- Rights of Indigenous Peoples and incidents of violations
- Human Rights Assessment: employee training on policies and procedures, agreements, and contracts that include human rights clauses
- Local Communities: engagement, impact assessment, development programs
- Supplier Social Assessment: social criteria in suppliers screening, negative social impact in the supply chain
- Public Policy and political contributions
- Customer Health and Safety: product and services health and safety impacts, incidents of non-compliance
- Marketing and Labeling: requirements and compliance, incidents of non-compliance concerning products, services, and marketing communications
- Customer Privacy: privacy breaches complaints and data loss
- Socioeconomic Compliance: fines and sanctions for non-compliance with social and economic laws and regulations
Benefits Of GRI Reporting
GRI reporting, and ESG reporting in general, is the answer to stakeholders' growing demand for sustainability. By clearly communicating an organization's impact on key issues, companies can better evaluate their performance and inform their decision-making processes. Some of the known and measured benefits also include investors’ interest and increased stakeholder loyalty.
GRI reporting is one of the most comprehensive ESG frameworks to help organizations communicate and demonstrate accountability for their impacts on the environment, the economy, and people. It also provides a more accurate map of existing gaps and allows benchmarking within or across industries.
GRI’s sustainability reporting offers both broad and sector-specific coverage and can be used with other ESG frameworks.
Getting Started On ESG Programs
No matter the standards and goals that are most relevant to your business, ESG reporting must obey a few basic rules to be profitable and positively impact growth and sustainability. The key to getting started and avoiding heavy constraints on resources is to understand the value of data and the importance of supplier engagement. Without cooperation from the partners in your value chain, you end up with little to report, inaccurate data, and the risk of losing precious time in building a credible and meaningful report.
Watch our on-demand webinar to learn more about implementing and tracking ESG initiatives in your supply chain.
