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G4 – Updated Global Reporting Initiative Guidelines

29 May 2013 at 10:39 am
Staff Reporter
The Managing Director of the Australian Centre for Corporate Social Responsibility, Dr Leeora Black attended the launch in Amsterdam of the much-anticipated update to the Global Reporting Initiative sustainability reporting guidelines, known as G4.

Staff Reporter | 29 May 2013 at 10:39 am


G4 – Updated Global Reporting Initiative Guidelines
29 May 2013 at 10:39 am

The Managing Director of the Australian Centre for Corporate Social Responsibility, Dr Leeora Black attended the launch in Amsterdam of the much-anticipated update to the Global Reporting Initiative sustainability reporting guidelines, known as G4.

Here’s her detailed analysis of the G4 Guidelines and what means for Australian companies.

In a nutshell, G4- the updated Global Reporting Initiative Guidelines are better than the previous guidelines. The increased focus on materiality, the more detailed guidance on standard disclosures, and the streamlined “In Accordance” system (replacing the A, B, C levels) will result in better targeted, more concise and more powerful reports.

The G4 Guidelines are more detailed yet more flexible than the earlier versions, meaning we are less likely to see ‘cookie-cutter reports’ from different companies that look fairly similar, and more likely to see reports that are as unique and individualised as the organisations producing them.

Overview of key changes in G4

The G4 Guidelines are published as two volumes. Volume 1 contains Reporting Principles and Standard Disclosures. The reporting principles remain unchanged, but there are some additional standard disclosures (see below). Volume 2 is the Implementation Manual. It contains detailed notes on the principles and disclosures, as well as all the GRI indicators with explanations.


Materiality will be the overarching principle for deciding what to report. As in the past, materiality will be assessed from both a stakeholder and an organisational perspective. However, G4 provides more detail on how to undertake this process. Materiality analyses will need to interrogate even more deeply and strategically than in the past.

Organisations will be required to report only what is material, meaning some reports will be able to leave out information they are currently reporting, while others will need to report more fully on areas they may not have in the past.

Replacement of the “A, B, C” system with “In Accordance” reporting

The system of reporting at either A, B, or C level, depending on the number of indicators reported, is gone. So has the plus symbol for reports that are assured.

Instead, reports will be declared “In Accordance” with GRI G4, either as “Core” or “Comprehensive”. Core will be the less extensive form of reporting. A Core report will include a minimum set of standard disclosures (which are more comprehensive than the current ‘Disclosures of Management Approach’), and a minimum of one indicator from each of the material Aspects reported. In contrast, a Comprehensive report will contain all the standard disclosures and report on all indicators within each of the material Aspects reported.

There is no fixed number of material Aspects to report, meaning two reports that are both Comprehensive could have a very different set of indicators reported, depending on what is truly relevant for the reporting organisation.

ACCSR expects that only the largest of companies are likely to undertake Comprehensive reporting because only the largest companies will have the broad range of impacts that make Comprehensive reporting necessary.  

However, it is certainly possible for smaller organisations to produce Comprehensive reports. In these cases, the organisations are likely to report a smaller set of material aspects, but in more detail than may be current practice.

Standard disclosures

The system of “DMAs” (Disclosures of Management Approach) has been updated with General Standard Disclosures and Specific Standard Disclosures (which relate to Aspects). There are new disclosures in both areas.

Remuneration and ethics are two areas that are new General Standard Disclosures and will need to be discussed in any Comprehensive report.

The General Standard Disclosure related to remuneration policies for board members and senior executives is broadly consistent with recent measures to enhance the disclosure of executive remuneration in Australia, such as the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Bill 2011 and the Exposure Draft of the Corporations Legislation Amendment (Remuneration Disclosures and Other Measures) Bill 2012.

The General Standard Disclosure related to ethics and integrity is similar to requirements within the ASX Corporate Governance Best Practice Principles and for the most part these can be dealt with through discussion of a the organisation’s code of ethics, values and whistle-blowing procedures and policies.

Because these new disclosures are already part of the Australian corporate reporting landscape we expect that our ASX-listed reporting clients will not have any major difficulties with them.

We also expect that the remuneration disclosures will be regarded as excessive by non-listed reporters, so that Core reporting will be more appropriate for them.

Supply chain

The focus on “value chain” that caused a lot of concern in the G4 Exposure Draft has gone, but the increased attention to supply chain remains. First, a general description of the organisation’s supply chain is now required as a part of an organisation’s profile within the General Standard Disclosures and will be necessary for any GRI “In Accordance” report, whether Core or Comprehensive. Supply chain is also dealt with via Aspects within the economic, social and environmental categories. For example, procurement practices are an economic Aspect, supplier environmental assessments are an environmental Aspect, and supplier assessments are Aspects within the labour, human rights and society categories.

The focus on supply chain is therefore extensive and will require even closer co-ordination between report co-ordinators and procurement and supply professionals within organisations. Requirements for narrative-style disclosures related to supply chain Aspects mean that procurement and supply chain strategy will be under the spotlight as never before. ACCSR anticipates that many organisations will identify the need for further work on their supply and procurement policies and procedures as a result of applying the G4 framework.

Reviewing the report

ACCSR has always encouraged our reporting clients to conduct formal reviews of their reports with stakeholders. G4 now formalises the requirement for a review of material Aspects and adherence to the reporting principles, and provides detailed guidance on this in the Implementation Manual.

Relationship to Integrated Reporting

The International Integrated Reporting Committee (IIRC) is well advanced developing a framework for Integrated Reporting that takes a different approach to corporate reporting than GRI. Aimed primarily at investors, an Integrated Report discusses how an organisation creates or destroys value in each of six areas (called Capitals); financial, manufactured, social, human, intellectual and natural.

Both forms of reporting draw on triple bottom line approaches, and recognise the legitimacy of external stakeholders. However, Integrated Reporting takes a different orientation to GRI reporting, by asking organisations to focus on how they create value, while GRI asks organisations to account for their impact.

The two approaches are compatible and the two organisations are in fact working closely together. The experience of reporters in South Africa, where Integrated Reporting has been mandatory for stock-exchanged listed companies for two years, is that organisations generally issue both a GRI report and an integrated report.

ACCSR expects that in Australia reporters are more likely to want to combine Integrated and GRI formats in a single document. This is certainly possible and the earliest examples of integrated reporting published so far here have used GRI in the development of Integrated Reports.

Timing of changes

There will be a two year period of transition between the current G3/3.1 guidelines and G4.  That means you will be able to produce a maximum of two further reports using G3/3.1.

However, ACCSR’s strong recommendation is that you begin planning now to move to G4 as soon as practicable. For most organisations G4 will be simpler to use and reports will be easier to produce so it makes no sense to delay.

Training on G4

Those who have previously undertaken certified GRI training will be able to do a one-day Bridging Module for G4 after it is available some time in July. GRI expects to provide the new two-day Certified Training Program on G4 in September 2013 though it will probably take several weeks more for local Certified Trainers to have their locally relevant versions of the training approved by GRI.

ACCSR strongly recommends that people who have not yet undertaken GRI training wait for the G4 training module. Although it is technically possible to undertake a two-day training program on G3/3.1 and then a one day Bridging Module we think this will produce sub-optimal outcomes due to the amount of compulsory content in G3/3.1 that will soon be redundant.

ACCSR’s recommendations for reporting organisations

  • Apply the G4 materiality process for your next report. It’s better than the old process and will result in a better targeted report, even if you still declare it as an A, B or C report.
  • Identify any new Aspects that need to be included in your report and the associated indicators. If you are ready to report on them now, that’s great. If not, consider what steps you need to take to get ready and put plans into place.
  • Review the General Standard Disclosures now and identify any that will require additional work beyond what you currently report. Consider what you need to do to get ready and put plans into place.
  • If you have already completed GRI training, attend the one-day G4 Bridging Module as soon as it is available.
  • If you have not attended GRI training, book the two-day G4 training course as soon as it is available.

Download the G4 guidelines at

ACCSR is a Certified GRI Trainer and will offer the G4 Bridging Module in Melbourne on July 25, with other locations to follow from August 2013.

Staff Reporter  |  Journalist  |  @ProBonoNews

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