Companies, nowadays, put emphasis on sustainability in their reporting to stakeholders as a means of providing information as to the viability of the business that help users in making economic decision. Emphasizing sustainability in corporate reporting enables a company to report their efforts and the results of these efforts (performance) on meeting economic, environmental and social objectives. This approach is called sustainability reporting.
Sustainability reporting is the practice of measuring, disclosing, and being accountable to internal and external stakeholders for organizational performance towards the goal of sustainable development. ‘Sustainability reporting’ is a broad term considered synonymous with others used to describe reporting on economic, environmental, and social impacts (e.g., triple bottom line, corporate responsibility reporting, etc.).
A sustainability report should provide a balanced and reasonable representation of the sustainability performance of a reporting organization – including both positive and negative contributions.
Sustainability reports based on the GRI Reporting Framework disclose outcomes and results that occurred within the reporting period in the context of the organization’s commitments, strategy, and management approach. Reports can be used for the following purposes, among others:
- Benchmarking and assessing sustainability performance with respect to laws, norms, codes, performance standards, and voluntary initiatives;
- Demonstrating how the organization influences and is influenced by expectations about sustainable development; and
- Comparing performance within an organization and between different organizations over time.
Source: Global Reporting Initiative
Sustainability Reporting isn’t just a random thoughts reporting. There are sets of guidelines which need to be followed or considered in order for the report to be meaningful to the stakeholders. The reporting needs to have a framework that is generally acceptable. This explains the existence of the Global Reporting Initiative (GRI). Also, the report will give more value to the stakeholders when ASSURED.
The Global Reporting Initiative (GRI)
The Global Reporting Initiative is a non-profit organization that promotes economic, environmental and social sustainability. GRI provides all companies and organizations with a comprehensive sustainability reporting framework that is widely used around the world.
GRI works towards a sustainable global economy by providing organizational reporting guidance.
GRI SUSTAINABILITY REPORTING GUIDELINES
The GRI Sustainability Reporting Guidelines (the Guidelines) offer Reporting Principles, Standard Disclosures and an Implementation Manual for the preparation of sustainability reports by organizations, regardless of their size, sector or location. The Guidelines also offer an international reference for all those interested in the disclosure of governance approach and of the environmental, social and economic performance and impacts of organizations. The Guidelines are useful in the preparation of any type of document which requires such disclosure.
The Guidelines are developed through a global multi-stakeholder process involving representatives from business, labor, civil society, and financial markets, as well as auditors and experts in various fields; and in close dialogue with regulators and governmental agencies in several countries. The Guidelines are developed in alignment with internationally recognized reporting related documents, which are referenced throughout the Guidelines.
The latest GRI Sustainability Reporting Guidelines is the G4. The GRI Sustainability Reporting Guidelines are periodically reviewed to provide the best and most up-to-date guidance for effective sustainability reporting. The aim of G4, the fourth such update, is simple: to help reporters prepare sustainability reports that matter, contain valuable information about the organization’s most critical sustainability-related issues, and make such sustainability reporting standard practice.
G4 Sustainability Reporting Guidelines (the Guidelines)
The Guidelines are presented in two parts:
- Reporting Principles and Standard Disclosures
- Implementation Manual
The first part – Reporting Principles and Standard Disclosures – contains Reporting Principles, Standard Disclosures, and the criteria to be applied by an organization to prepare its sustainability report ‘in accordance’ with the Guidelines. Definitions of key terms are also included.
The second part – Implementation Manual – contains explanations of how to apply the Reporting Principles, how to prepare the information to be disclosed, and how to interpret the various concepts in the Guidelines. References to other sources, a glossary and general reporting notes are also included.
You may download a copy of the G4 Sustainability Reporting Guidelines using this LINK.
At high level, the content of the G4 Sustainability Reporting Guidelines are as follows:
- THE PURPOSE OF THE GRI SUSTAINABILITY REPORTING GUIDELINES
- HOW TO USE THE GUIDELINES
- CRITERIA TO BE APPLIED BY AN ORGANIZATION TO PREPARE ITS SUSTAINABILITY REPORT ‘IN ACCORDANCE’ WITH THE GUIDELINES
- REPORTING PRINCIPLES
- STANDARD DISCLOSURES
- QUICK LINKS
The Need for Assurance in Sustainability Reporting
Sustainability reports, to give more value should be prepared in accordance with the Guidelines. Any report containing a statement that it is prepared ‘in accordance’ with the Guidelines should be prepared in accordance with the criteria presented in this section, and should present the GRI Content Index.
In the GRI Content Index a reference to the External Assurance Report should be included, if the report has been externally assured. GRI recommends the use of external assurance but it is not a requirement to be ‘in accordance’ with the Guidelines. Assurance, however, will increase the value of the reporting as a third party will be reporting independently as to a company’s compliance with the Guidelines.
Professional Firm Providing Sustainability Assurance Service
I am personally not aware of all the professional firm providing assurance on sustainability report. It is noted, however, that these top auditing firms, also included in the G4 Consortium, are offering the service:
- Ernst & Young (now EY)
In the Philippines, the practice of having sustainability report assured is not yet widespread among companies preparing it. Among the top provider of this service is EY Philippines (locally known as SGV & Co. or SyCip Gorres Velayo & Co.), the country’s largest professional services firm.
If you wish to avail of SGV & Co.’s Sustainability Report Assurance Service, you may directly contact me using this website in the “ABOUT” section in the menu. You will find a message section where you can leave your message and contact details. SGV & Co. can be directly reached through +63 (2) 891 0307. Just look for the Sustainability Assurance Leader.
In order to gather resources for this project, GRI established the G4 Consortium. Members of the Consortium – world-leading companies Alcoa, Enel, GE, Goldman Sachs, Natura and Shell – sponsored the project for the three year development of G4. GRI counted also on the expertise and support of Deloitte, Ernst & Young, KPMG and PwC to check and improve the technical features of the current Guidelines. These companies were also members of the G4 Consortium.
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Acknowledgment: Most of the content are sourced from Global Reporting Initiative.