Guide to Giving
MEDIA, JOBS & RESOURCES FOR THE COMMON GOOD
NEWS  |  General, Opinion

The Step Up To G4


Wednesday, 6th March 2013 at 9:36 am
Staff Reporter
The May release of G4, the latest incarnation of sustainability reporting guidelines by the Global Reporting Initiative (GRI), is seen by reporters in Australia with both anticipation and trepidation. This is Part One of a series by Banarra Principal Paul Davies.

Wednesday, 6th March 2013
at 9:36 am
Staff Reporter


0 Comments


FREE SOCIAL
SECTOR NEWS

 Print
The Step Up To G4
Wednesday, 6th March 2013 at 9:36 am

The May release of G4, the latest incarnation of sustainability reporting guidelines by the Global Reporting Initiative (GRI), is seen by reporters in Australia with both anticipation and trepidation. This is Part One of a series by Banarra Principal Paul Davies.

The May 2013 release of G4, the latest incarnation of sustainability reporting guidelines by the Global Reporting Initiative (GRI), is seen by reporters in Australia with both anticipation and trepidation.

Although it is not yet finalised, with some fine-tuning still to be done by GRI, its proposed content was made available through an exposure draft in late 2012, highlighting key areas of change that companies will need to absorb and adapt to if they wish to produce, or claim to produce, a GRI G4-compliant report.

As with earlier transitions in its Guidelines, GRI will allow reporters a period of time to come to terms with, and incrementally apply, the new criteria. This article will briefly touch on what the anticipated changes are to G4 (at least as far as we can tell from the exposure draft), what is their significance for businesses, and what reporters should be thinking about, or doing, in preparation for these changes.

The big ticket step-up areas that aspiring G4 users should start considering are in the disclosures around boundary and value chain, management approach, supply chain, governance, anti-corruption and, of course, that ever challenging but fundamentally important aspect called materiality. More than ever before, materiality now sits squarely at the centre of a GRI report.

Rather than overwhelm you with all these changes in one article, it’s more palatable to perhaps break these down through a series of short instalments, which also of course builds a sense of excitement and anticipation.

Boundary and value chain

The boundary-setting process helps organisations decide (and readers identify) what’s in, and what’s not in, the report. G4’s expected approach is to move away from traditional legal and structural report boundaries dictated by corporate ownership, to now focusing report disclosures on any part of the value chain that is affected by a business’ material impacts. 

This represents a broadening of thinking around the breadth of material impacts and how the organisation is accountable for them. The approach encourages a lot more rigour in how reporters describe their value chain, report boundary and materiality process, and how their identified material impacts are accounted for relative to their entire value chain. We hope that this means less “vague” materiality statements in reports.

Mapping your value chain is now the first step in determining your report boundary. In mapping the value chain of your organisation, you need to look both upstream (your suppliers and their suppliers, where relevant) and downstream (your clients and, again if appropriate, their customers). Needless to say this may be quite involved for larger organisations, depending on the level of detail and the number of value chain components covered. The suggested approach is to keep it simple initially for your first G4-compliant report and get used to the concept.

You then need to think about your material issues to report, and prioritise, not just in relation to your business, but also in relation to their impacts within your value chain. This will enable you to set boundaries for your report that now make more sense in relation to the specific issues you are reporting.

Disclosures on Management Approach

Disclosures on Management Approach (DMAs) are intended to provide you with an opportunity to explain (and the reader to understand) how your business is managing its material impacts on the value chain, whether economic, environmental, or social. In past reporting they have often been ignored, or if included, been vague and irrelevant to the material impacts you are addressing. However, to readers, they are just as valuable as performance data.

The G4 exposure draft outlined a generic approach to DMAs that is quite simple in nature but unfortunately was communicated poorly in the draft, leading to confusion and concern. The simple intent is that DMAs are provided by the reporter only for material impacts. It is proposed by G4 that these disclosures are provided at the “Aspect level” (which, for those of you unfamiliar with GRI reporting, is typically the level at which most organisational performance areas are managed).

But the G4 allows you to also report management approaches at a higher organisational level, or at a more performance indicator-specific level, depending on which is more reflective of how you manage a particular impact – in other words there is flexibility to reflect different organisational approaches to different performance areas. You don’t need DMAs around non-material aspects of your performance.

These expected changes regarding DMAs are designed enhance readers’ knowledge and appreciation of how material topics and their impacts are understood and managed by your business, and to redress the imbalance that has existed in reports that focus more on performance data and less on management capability. It also encourages transparency on the reporter’s challenges and barriers to managing difficult issues.

In the final version of G4 it is possible that DMAs will now be a minimum requirement for any report claiming compliance with the GRI framework (it wasn’t for GRI Application Level C reports in the past).

The strong materiality focus of the DMA approach in G4 is a good move in producing more focused, more informative and more transparent reports.

In future articles we will look at the likely governance, supply chain and anti-corruption changes to G4 and how to understand and address them.

About the Author: Paul is a Principal at Banarra and a certified GRI trainer, a member of the GRI G4 working group on management approach disclosures, a member of the GRI G4 Practitioner's Network, a member of the IIRC working group on the assurance of integrated reports, and one of a handful of Certified Lead Sustainability Assurance Practitioners worldwide. He has written and contributed to four award-winning sustainability reports, assured more than 30 sustainability reports, and has also written, edited and produced over twenty Annual Reports. He has also delivered workshops on GRI, auditing, and materiality, both nationally and internationally.
 



AON

FEATURED SUPPLIERS


Yes we’re lawyers, but we do a lot more....

Moores

...


NGO Recruitment is Australia’s not-for-profit sector recru...

NGO Recruitment

Helping the helpers fund their mission…...

FrontStream Pty Ltd (FrontStream AsiaPacific)

More Suppliers


YOU MAY ALSO LIKE

Filling the Service Gaps That People Keep Falling Through

Dr Tessa Boyd-Caine

Tuesday, 5th September 2017 at 8:41 am

Survey Reveals Australian Attitudes to Torture in Conflict

Lina Caneva

Tuesday, 6th December 2016 at 3:05 pm

Indigenous Advocate Named 2016 Telstra Business Woman of the Year

Lina Caneva

Tuesday, 22nd November 2016 at 12:30 pm

Aussies Say Yes to Multiculturalism, Marriage Equality But No To Politics

Lina Caneva

Tuesday, 22nd November 2016 at 11:05 am

POPULAR

Moves to Stop Volunteering at Overseas Orphanages

Luke Michael

Wednesday, 13th September 2017 at 1:54 pm

Future Uncertain for Disability Organisations Following Funding Cuts

Wendy Williams

Tuesday, 19th September 2017 at 8:29 am

Majority of NFPs Are Not Believed to be Well-Run, According to New Survey

Luke Michael

Tuesday, 12th September 2017 at 4:14 pm

More Australians Are Giving Time Not Money

Wendy Williams

Monday, 11th September 2017 at 5:07 pm

Write a Reply or Comment

Your email address will not be published. Required fields are marked *


Guide to Giving
pba inverse logo
Subscribe Twitter Facebook

Get the social sector's most essential news coverage. Delivered free to your inbox every Tuesday and Thursday morning.

You have Successfully Subscribed!