iCompli Sustainability

04 Oct

Top 20 things you need to know about GRI 4.0 Featured

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The Global Reporting Initiative (GRI) is the most widely used sustainability reporting framework. So when they make a change, the business world notices.

Recently, GRI introduced GRI 4.0, the organization’s the newest guidelines. These new guidelines have shifted the focus to put more emphasis on materiality, stakeholder engagement and a principled approach to reporting, among other changes.

Now, whether you are a business with experience reporting under GRI, or a newcomer to sustainability reporting, these new guidelines could throw you for a loop. With that in mind, our report assurance experts have created a comprehensive list of the top 20 things you should know about GRI 4.0.

20 Things You Need to Know about GRI G4

  1. It’s all about Materiality. G4 focuses on identifying an organization’s Material Aspects – those issues that:
    • Reflect the organization’s significant economic, environmental and social impacts; or
    • Substantively influence the assessments and decisions of stakeholders.
  2. G4 takes a broader view of what an organization’s ‘Boundary’ is: focusing on impact rather than legal control. Boundary refers to where an impact occurs for each Material Aspect identified. Impacts can be of an internal or external nature, that is, they can exist throughout the value chain.
  3. Stakeholder engagement is a critical component of Materiality. If you’re not engaging with your stakeholders and addressing their material issues – including joint ventures and other impact locations – you better start.
  4. G4 incorporates a principles-based approach. This covers content and data quality principles.
  5. G4 is both BIGGER and smaller than its predecessor. The number of Profile-type disclosures goes from 42 to 58; Performance Indicators increase from 84 to 91; and Aspects from 37 to 46. BUT you only have to report on what’s material to your organization, which means there could be less to report than under G3.1.
  6. Application Levels (A, B and C) have been eliminated. In their place, an organization can report “in accordance with GRI” to either the Core or Comprehensive Levels.
  7. The Core option contains the essential elements of a sustainability report – 34 of the 58 General Disclosures and one Specific Disclosure for each Material Aspect identified.
  8. The Comprehensive option requires additional disclosure on strategy and analysis, governance, supply chain and performance metrics – all 58 General Disclosures and ALL Specific Disclosures for each Material Aspect reported.
  9. The new disclosures on supply chain could pose a resource and data challenge for all companies but particularly for large, multinational companies with a complex supply chain.
  10. You can declare your report “in accordance with GRI” at the Core Level, but go beyond that to report on as many General Disclosures and Specific Disclosures as you see fit.
  11. GRI will not be checking Core or Comprehensive reports for compliance.
  12. G4 is offering a ‘Materiality Matters’ check, instead of the Application Level (A/B/C) check from G3.1. The ‘Materiality Matters’ check verifies that the 10 standard disclosures for Identified Material Aspects and Boundaries (G4-17 through G4-23) and Stakeholder Engagement (G4-24 through G4-27) are correctly located in the Content Index and the final report.
  13. G4 has a number of new disclosures on compensation. The good news is that some can be satisfied with information from your Proxy report.
  14. There are TWO potential “poison pills” in the new Governance Disclosures that could make reporting at the Comprehensive level problematic for even the biggest companies. You have to report compensation ratios for highest-paid individual in EACH country of significant operations.
  15. You must have a Disclosure on Management Approach (DMA) for each of the Material Aspects you’re reporting on (in theory that could be up to 46 for a large global enterprise), but if you are managing a number of Aspects similarly, you can combine the DMAs in your report (as long as you make clear which ones you have combined) so you don’t end up reporting separately on 40+ DMAs.
  16. If available for an organization’s sector, Sector Supplement Indicators (now called Sector Disclosures) will be required for both Core and Comprehensive levels – if they are material. If not, no need to report on sector disclosures.
  17. G4 Disclosures can be referenced to other reports from your company: annual reports, proxy statements, voluntary statements, a CDP response, etc. G4 wants specifics – no general references – with the section, table or pages that address the disclosure.
  18. The Content Index now asks for the location of each Standard Disclosure (page reference or link to other reports), and whether it has been externally assured. The G3.1 Content Index sections for the “Level of Reporting” (Fully/Partially/Not) or the “Type of data” (qualitative/quantitative) did not make the move to G4.
  19. If you have any disclosures assured by a third party, you have to indicate those that have NOT been assured as well.
  20. Information can be excluded if reliable data is unavailable or if there are specific legal prohibitions or confidentiality issues at play.

Not yet transitioned to reporting with GRI 4.0? If you are looking to start, learn how iCompli Sustainability can help you begin identifying gaps and opportunities within your organization.

Download the full Top 20 list here.

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Karl Pfalzgraf, Practice Leader

Vice President, Sustainability Services

Karl is the Practice Leader for iCompli Sustainability. He has a broad background in GRI reporting and assurance with more than 20 years of experience developing strategic sustainability communications and executing programs at the international level. Most recently, he served as Director, Business Development with AccountAbility, a leading international corporate responsibility think tank and consultancy. Previously Karl was Director, Global Brand and Communications at PwC, where he was responsible for global sustainability communications. Earlier in his career, Karl was Vice President, Corporate Communications at J.P. Morgan. He is a Member of the ANAB Committee of Experts for Event Sustainability and is a LEED Green Associate. Karl has led the development of the certification program for the ASTM sustainability standards. 

Contact via email

Phone: 1-203-447-2817

Website: www.linkedin.com/pub/karl-pfalzgraf/b/375/491
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