G4 seeks to tighten focus of reporting on issues of material relevance, swapping depth for breadth
The Global Reporting Initiative (GRI) has released the fourth generation of its widely used Sustainability Reporting Guidelines with the intent of focusing reporting on subjects that matter directly to stakeholders and weeding out less-relevant information.
G4, unveiled to 1,600 corporate leaders and other stakeholders at a conference in Amsterdam, seeks to increase the relevance of sustainability reporting by opting for a tight focus instead of the broad-sweep reporting of the first three versions of the guidelines, which met with frequent criticism.
‘By placing an even greater emphasis on the concept of materiality, G4 will encourage reporting organizations to provide only disclosures and indicators that are material to their business, on the basis of a dialogue with their stakeholders,’ GRI says in a press release. ‘This will allow reporting organizations and report users alike to concentrate on the economic, environmental and social impacts that really matter, resulting in reports that are more strategic, more focused and more credible, as well as easier for stakeholders to navigate.’
The organization says G4, which was drafted over two years by 120 experts in labor, business, civil society and other areas and through public consultations that generated more than 2,500 responses, also makes the guidelines easier to understand for people who are new to reporting and harmonizes the guidelines with the United Nations Global Compact Principles, the UN Guiding Principles on Business and Human Rights, and other global frameworks.
‘In today’s world, the increasing demand for sustainability information is inevitable,’ Nelmara Arbex, GRI’s deputy chief executive who led the development of G4, says in the press release. ‘Increasingly, governments, stock exchanges, investors and society at large are calling on companies to be transparent about their sustainability goals and performance. But this demand is also a demand for sustainability-related information that matters. This is what G4 is about.’
G4 updates disclosures on governance, ethics and integrity, supply chain, anti-corruption and greenhouse gas emissions, increases the flexibility given to those who prepare reports to choose the focus, offers more detailed guidance on how to determine materiality of topics, and reviews content and clear disclosure requirements, adds GRI.
In its press release, GRI says G4, which went through about 1,000 drafts before reaching its current stage, met with widespread approval from stakeholders. ‘One of the key benefits of the new G4 guidelines is their redefined focus on disclosure of material issues,’ Christian Mouillon, global vice chair of assurance at Ernst & Young, is cited as saying. ‘This step will increase the transparency and value of sustainability reporting for stakeholders and provide a more accessible framework for organizations, particularly those that have not previously reported.’
