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Move over G3. The Global Reporting Initiative (GRI) is on track to finalize G4 reporting guidelines by May 2013. Significant changes will have a major impact on the 3,900+ companies that use the GRI standard for corporate responsibility (CR) communications. Here are some things you should know.

Goodbye application levels

There’s been too much confusion about what application levels mean. Calling the levels “A,” “B” and “C,” gave the mistaken impression that it was an indicator of sustainability performance or quality of reporting. Neither is the case. The new proposal is based on “in accordance” criteria.

Good news for beginners and smaller companies

A big emphasis on user-friendly guidance should make the guidelines easier to use and understand, especially for people new to sustainability reporting. A Web-based version of the framework will be available — a welcome option to the current hefty PDF. Smaller companies will have an easier time reporting, because the number of disclosure items will be reduced for them, a recognition of their relative lack of complexity compared to larger organizations.

“As people become more aware, and actually see more information, they actually become more skeptical.”

James Cerutti of Brandlogic

Focus and clarity

The goal is to produce more focused reports that are specific to an organization’s key operations and challenges. The trend has been for organizations to produce glossy reports with generic content. As a result, a company like BP could produce outstanding GRI-based reports that don’t focus on real challenges. Improving the technical definitions should make it easier for organizations to get external verification of reported information.

This is evident in the disclosure changes for Anti-corruption (in a new Ethics section) and GHG Emissions Indicators (grouped into three subsets). Energy Indicators also have been modified for more streamlined reporting.

Changes to management approach disclosure and reporting boundaries will require more specific information on how organizational strategies are implemented and how far impact disclosures should go. Product and supplier disclosures bring supply chain into closer view.

Harmony

The new guidelines are designed to better harmonize with other internationally accepted standards.


More is less

Most companies are doing better at sustainability performance but many aren’t getting credit. That’s one finding in the 2012 Sustainability Leadership Report by Brandlogic and CRD Analytics. Key audience perceptions aren’t rising at the same rate as their performance improvements. That may be because more reporting can simply mean more information that people can’t evaluate.


No integrated reporting guidance

While integrated reporting remains the goal for many organizations, there is no internationally agreed-upon standard yet. Organizations pioneering this effort are inventing it as they go. Standards will likely emerge in future GRI versions that codify the best practices of these leading edge organizations.

Will there be a grace period?

This is not expressly stated yet, but a grace period of up to two years was given with previous framework updates. Since this is a major upgrade, a similar grace period is likely.

The bottom line

This is a step forward for sustainability reporting in a landscape that’s fast evolving. While the GRI framework is only a guideline, it’s a great tool that promotes consistency and clarity. We’re ready to welcome CR 4.0.

Head to the GRI site to learn more about the changes or to read the G4 Sustainability Reporting Guidelines (finalized post article publishing).

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