How To Use GRI Reporting Framework For Successful ESG Programs

by Source Intelligence

on January 6, 2022

The GRI (Global Reporting Initiative) was created in 1997 in the wake of the Exxon Valdez disastrous oil spill with the aim of creating mechanisms that could hold companies accountable for their impact on the environment. 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. Through a common language framework, companies can increase transparency and meet stakeholders’ expectations and needs.

 

 

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

 

As the starting point for using the GRI Standards, the foundation principles define report content and quality.

 

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 to provide an explanation on 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, benefit, 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 the growing demand for sustainability from stakeholders. By clearly communicating the impacts an organization has 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 and gives the opportunity to understand the impacts by and on an organization. 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 have a positive impact on 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.

 

Per GRI’s requirement, disclosure should be balanced (not solely focusing on positive impacts), clear, complete, comparable, reliable, and timely.

 

To help you get the supply chain data you need, Source Intelligence has created a fully automated ESG program that uses AI to verify data, regardless of the framework(s) you choose. From standards mapping to automated reporting, our solution eliminates manual tasks and makes collaboration easy and centralized. Our engagement team offers 24/7 support to communicate with suppliers and engage them to adopt sustainable practices by actively participating in your initiatives.

 

Are you ready to balance social conscience and financial performance without wasting time and money?

 

Request a demo of our ground-breaking compliance technology today.

 

Request a Demo

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