Sustainability reporting bracing for significant changes ahead

Posted on March 3, 2011 by

In the small and growing world of sustaianability reporting, two significant changes can be expected in near future. They are
(1) the GRI G4 guidelines and
(2) the Integrated Reporting framework.

GRI G4 – The next generation of Guidelines

GRI G4 is the new and improved version of the comprehensive GRI framework. It is scheduled for a launch in 2013. The reporting under GRI G4 will take some more time, till around 2015. As is the standard, the process of developing G4 guidelines will be the multi-stakeholder process in which there are broad consultations. The final draft is expected to be ready by end 2012. The G4 guidelines development has started with ambitious objectives. It is being designed to meet several needs as GRI foresees that the number of companies reporting is going to increase rapidly over the next few years. Sustainability and ESG reporting is being adopted, particularly amongst the larger public companies, but a large number of companies, even in the public companies group have not chosen to disclose sustainability information.

GRI G4 has two broad goals – one to improve the G3, and prepare for scale-up.

It aims to improve G3 by
1. Providing better guidance on reporting of governance issues
2. By making definitions more robust to better support assurance processes
3. Updating the scope of sustainability as a concept
4. Providing guidance related to current stages of normative frameworks such as UNGC and OECD reporting guidelines
5. Revising the current definitions of application levels

It aims to prepare for scale up by
1. Offering flexible reporting elements for reporters dealing with different requests
2. Developing a user friendly format
3. Linking to the International Integrated Reporting Committee framework
4. Link to broader ESG reporting requests and ESG information users

We will soon come back with an update on the IIRC.

For corporates in India, even the basic ESG disclosure is not a widely adopted practice. Part of the reason is lack of structured demand from regulators such as SEBI and the ministry. With the Companies Bill trying to get some aspect of CSR and sustainability in the legislation, even if at voluntary level, the reporting of sustainability and approach to that should start looking up soon. As we have mentioned earlier, sustainability when integrated in the organization helps organizations beyond the obvious profits and profitability. This at least should now drive organizations towards thinking seriously about sustainability.

Posted in: Sustainability