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Home > By DEPARTMENTS > Leadership and Governance for Sustainability > Global Leadership

Sustainability Reporting with
GRI's G2 Guidelines

GRI Guidelines are widely used in sustainability reports as accountability mechanisms to ensure following CERES Principles for responsible environmental conduct.

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Since Global Reporting Initiative's inception in 1997 GRI has developed from a bold idea to a thriving international network involving as many as 30,000 in 70 countries. This growth is a reflection of the establishment of the practice of sustainability reporting, which has evolved from an extraordinary exercise by a few pioneering organizations a decade ago to an essential management and communications tool for many businesses and a valuable resource for their stakeholders.

Over 1000 organizations now self declare the use of the GRI Guidelines in their sustainability reports, and a multitude of others use the Guidelines on a more informal basis without self-declaration.

GRI has its roots within the Boston based non-profits CERES and the Tellus Institute. The co-founder and former acting chief executive of GRI, Dr. Allen White, Vice President and Senior Fellow at Tellus, pioneered a framework for environmental reporting as advisor to CERES in the early 1990s with the aim of creating an accountability mechanism to ensure companies followed the CERES Principles for responsible environmental conduct.

Initially the North American market was unreceptive to the environmental framework and uptake was slow. This concerned Dr. White and the then executive director of CERES, Dr. Robert Massie, as well as the rest of the CERES board. Without a change in direction they believed their bold vision of a generally accepted environmental reporting framework would be unachievable.

According to Dr. White “it was time to look beyond the borders of the US for markets to those that were more receptive to the idea of a generally accepted framework…in short it was time for a Global Reporting Initiative(GRI)”.

Joan Bavaria, CERES board member at the time and pioneer of the Socially Responsible Investment community in the US, explains “The conception of GRI was for CERES a concession, recognizing that CERES must collaborate and combine efforts for reporting in a global economy to survive and flourish”.

In 1998 Massie and White partnered with UNEP to gain global reach, formed a multi-stakeholder Steering Committee, and began a series of stakeholder dialogues and working groups to initiate a process that would lead to the formation of GRI. Through this process of multi-stakeholder engagement, which has become the signature of GRI, they were advised in a pivotal Steering Committee in early 1998 to “do more than the environment”. On this advice they broadened the framework’s scope to include social, economic and governance issues such as labor standards, governance, and anti-corruption policies. From that moment on, GRI became a sustainability reporting framework.

G2 Guidelines

GRI launched the first version of the Guidelines in 2000, and the second iteration followed two years later at the World Summit on Sustainable Development in Johannesburg. These so-called G2 Guidelines received high profile recognition among governments, business, civil society and labor participants, and was one of only two initiatives mentioned in the official government declaration issued at the conclusion of the Summit.

That same year GRI was formally inaugurated at the United Nations as a new global institution and a collaborating centre of UNEP. At that point 150 organizations self -declared their use of the Guidelines in their sustainability reports.

In mid-2002 GRI relocated to Amsterdam and incorporated as an independent, non profit organization in the Netherlands. In the five years since GRI came to the Netherlands, it has firmly established itself as the world’s leading sustainability reporting institution and network while continuing its commitment to it original core values of inclusiveness, transparency, and technical excellence.

“Over the first 10 years, awareness of sustainability has significantly changed, it has moved from being the concern of the few to the concern of the many. Sustainability is high on the agenda of politicians, investors, consumers, and businesses – yet in these changing times it remains a complex issue to grapple with” explains Ligteringen.

The momentum around issues such as climate change has fueled this interest in sustainability and reporting. At the same time the nature of development, which has brought about wealth in the OECD countries, has come under question.

Emerging economies continue to follow this development path, driven by their desire to alleviate poverty among their own populations. China and India are realizing economic growth at unprecedented levels. But the severe unintended consequences of this growth are causing the global community to sit up and address the tension between the need for development and its negative impacts. In turn, “there is a growing understanding that we have to search for a different approach to development and out of this comes the sustainability agenda” stresses Ligteringen.

This growing understanding could be said to have raised people’s expectations of business. Two recent surveys by McKinsey and Co. (one of GRI’s now 437 Organizational Stakeholders) have found that consumers agree that corporate obligations to shareholders must be balanced by contributions to the broader public good but at the same time, their level of trust in businesses is decreasing.

"Reporting disclosures is going to be crucial in addressing this trust issue” emphasizes Ligteringen. Mervyn King, GRI Board Chair, agrees. He says to gain this trust "a company should make clear both the positive and negative effects of its operations on the local community. It should set out how it intends to enhance those positive aspects and how it will endeavor to eradicate or improve on the negative aspects of its business on the community in which it operates".

The basic substance of the GRI strategy is to encourage the use of the Guidelines as a generally accepted framework for sustainability reporting, and use the multi-dialogue as the process for creating and instilling trust in these Guidelines. Many challenges remain such as achieving a balance act between advancing the increasingly fast-paced debate on sustainability issues, while also remaining conveners of the multi-stakeholder process.

The changing operational context of GRI and sustainability reporting, and the emergence of new challenges, has led a broadening and realignment of the strategy.

Judy Henderson, current GRI Board member and former chair, explains "With an initial focus on the needs of report preparers the strategy now is turning to address issues faced by reporter users - the need to make material in reports more relevant, more comparable and the need for IT solutions to make the information more accessible. In order to establish a more common basis of knowledge, GRI has also now moved to develop and disseminate learning tools, training courses and services both for report preparers and users".

The first steps in engaging with the report readers will take place in the run up to the 2008 GRI conference, The Amsterdam Global Conference on Sustainability and Transparency - Sustainability Reporting Today: the Readers’ Verdict, with the launch of the GRI Readers’ Choice Awards and Survey.

As the sustainability debate advances and the sophistication of the methods of communicating the disclosures continue, it is clear sustainability reporting has a place in future. "Sustainability reporting has become critical for companies. It is important for companies to build the trust and confidence of its stakeholders and it is expected of companies today to report on the sustainability issues pertinent to its business" explains King.

It only leaves us to speculate on the anniversary of GRI’s conception, where it will be and how GRI will look in 2017? In the words of Ernst Ligteringen "in 10 years time sustainability reporting will be a normal practice for the majority of listed companies… whether the GRI as an institution still exists in its current form is neither here nor there, what is important is that our vision is realized".

www.globalreporting.org



Edited by Carolyn Allen, owner/editor of California Green Solutions
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