GRI updates sustainability reporting guidance

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24 May 2013

The Global Reporting Initiative (GRI) has released the fourth major revision of its Sustainability Reporting Guidelines, dubbed 'G4'. The GRI's guidelines are widely used in preparing sustainability reports and are designed to provide a standardised approach to reporting on economic, environmental, social and governance (ESG) performance. The revised guidelines are intended to be easier to use, place a greater emphasis on materiality in sustainability reporting, and include new and updated disclosures in various areas, including governance, ethics and integrity, supply chain, anti-corruption and greenhouse gas (GHG) emissions.

The G4 guidelines are presented in two parts:

  • Reporting principles and standard disclosures - this includes the criteria to be applied when preparing sustainability reports in accordance with the guidelines, the reporting principles underlying sustainability reports (in terms of content and quality), and the standard general and specific disclosures required
  • An implementation manual - providing further explanation on how to apply the reporting principles and prepare the standard disclosures.

The table below provides an overview of the G4:


Reporting principles

Principles for defining report content

  • Stakeholder inclusiveness
  • Sustainability context
  • Materiality
  • Completeness

Principles for defining report quality

  • Balance
  • Comparability
  • Accuracy
  • Timeliness
  • Clarity
  • Reliability
Standard disclosures

General standard disclosures

  • Strategy and analysis
  • Organisation profile
  • Identified material aspects and boundaries
  • Stakeholder engagement
  • Report profile
  • Governance
  • Ethics and integrity
  • General standard disclosures for sectors (if available)

Specified standard disclosures

  • Disclosures on management approach
  • Aspects, by category:
    • Economic - economic performance, market presence, indirect economic impacts, procurement practices
    • Environmental - materials, energy, water, biodiversity, emissions, effluents and waste, products and services, compliance, transport, overall, supplier environment assessment, environmental grievance mechanisms
    • Social - labour practices and decent work, human rights, society, product responsibility (with additional indicators for each)
  • Specified standard disclosures for sectors (if available)

The Guidelines offer two options on how to prepare a sustainability report ‘in accordance’ with G4:

  • 'core' - essential elements providing a background for sustainability reporting
  • 'comprehensive' - requiring additional standard disclosures around strategy and analysis, governance, ethics and integrity, and more comprehensively communicate performance.

Reports prepared 'in accordance' with G4 are also required to include a 'GRI Content Index' which effectively cross references disclosures made to the individual report elements required by G4. The GRI also requests organisations using the guidelines to notify GRI upon release of the report if they are 'in accordance' with the guidelines or contain the standard disclosures but have not fulfilled the other requirements meet the 'core' or 'comprehensive' classifications.

In terms of materiality, the guidelines outline the principle that an entity should report on items from the list of subjects covered by the guidelines (called 'Aspects') that reflect an organisation's significant economic, environmental or social impacts or which substantially influence the assessments and decisions of stakeholders. Materiality is considered the "threshold at which Aspects become sufficiently important that they should be reported". The Implementation Manual provides additional guidance on applying the principle, including, among other aspects, a focus wider than only on the financial condition of an organisation, consideration of internal and external factors, alignment with established methodologies and concerns for expert communities, and focusing on those areas requiring active management or engagement by the organisation. A series of 'tests' are also provided.

G4 also provides guidance on how to present sustainability disclosures in different reporting formats, such as standalone sustainability reports, integrated reports, annual reports, and online reporting. There is also an emphasis on harmonisation with other important global frameworks, and the guidelines outline 'links' to including the United Nations (UN) Global Compact Principles, the UN ‘Guiding Principles on Business and Human Rights’, and the OECD Guidelines for Multinational Enterprises. It also considers the relationship between integrated reporting and sustainability reporting, noting:

Although the objectives of sustainability reporting and integrated reporting may be different, sustainability reporting is an intrinsic element of integrated reporting. Sustainability reporting considers the relevance of sustainability to an organization and also addresses sustainability priorities and key topics, focusing on the impact of sustainability trends, risks and opportunities on the long term prospects and financial performance of the organization. Sustainability reporting is fundamental to an organization’s integrated thinking and reporting process in providing input into the organization’s identification of its material issues, its strategic objectives, and the assessment of its ability to achieve those objectives and create value over time.

Organisations reporting using the GRI guidelines can continue to use the previous guidelines ('G3' and 'G3.1') until they transition to the G4 guidelines. However, GRI is expecting all entities to complete the transition to G4 in reports published after 31 December 2015.

Click for press release on the launch - the G4 guidelines can be downloaded here (both links to GRI website).

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