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Use the GRI Standards ASAP to accelerate positive change

Gerasimos — Tue, 18 Dec 2018 08:00:24 +0000

HOW WE ARE ACCELERATING POSITIVE CHANGE AND HOW YOU CAN TAKE ACTION

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With the course you will learn how to take positive sustainability action ASAP using the GRI Standards: an all-round, complete, structured, and methodical approach used by 80% of the world’s largest 250 companies.

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This article lays out how companies or organisations can accelerate positive change with the use of the GRI Standards which are overwhelmingly, the chosen framework for CSR/ ESG/ SDG/ Sustainability reporting. Today, 80% of the world’s 250 largest companies report according to the GRI Standards.

Two major issues in today’s world – the bigger picture is material
1) Whilst there is a huge take-up of sustainability reporting by the largest companies globally, they only represent approximately 10% of the global economy. SMEs, which represent about 90%(1) of the global economy, are taking little or no action to address huge issues like climate change or their impacts on the economy and society.

2) We need to shift gears and accelerate change, dealing now with issues that are screaming ‘urgent’ – like taking action on climate change (2a) (2b) (2c). This has to be done now by the vast majority of companies, large and small, on a global scale. Companies must first identify their impacts and, then, must take focused action by measuring, managing and changing.

Evolving your GRI Standards report to one that matters
In view of the pressing sustainability issues we are facing, I firmly believe that companies must make every effort accelerate positive change Tweet This!. They must take a step back and see the forest, address environmental issues but also take positive action to develop the economies and societies on which they rely for growth and profit. US$12 trillion is the cherry on the cake (see below).

I propose that in addition to their material topics, companies report on:

1) four very important standards (descriptions below):

GRI Disclosure 201-1 Direct economic value generated and distributed(3)
GRI Standard 203 Indirect Economic Impacts(4)
GRI Standard 308 Supplier Environmental Assessment(5)
GRI Standard 414 Supplier Social Assessment(6)

2) at least one positive impact on society, using any of the GRI Standards but, more specifically, GRI 201 and 203
3) how they implemented GRI’s Reporting Principles, which help them demonstrate that they are not greenwashing

How is a company treating the society on which it relies for growth and profit?
GRI Disclosure 201-1 Direct economic value generated and distributed
With this disclosure companies must report and provide information on:

Direct economic value generated: revenues;
Economic value distributed: operating costs, employee wages and benefits, payments to providers of capital, payments to government by country, and community investments;
Economic value retained: ‘direct economic value generated’ less ‘economic value distributed’.

GRI Standard 203 Indirect Economic Impacts

Disclosure 203-1 Infrastructure investments and services supported
Disclosure 203-2 Significant indirect economic impacts

What does this mean for the person in the street?

These are both marvellous GRI Standards that companies can use to report on their positive impacts. However, many companies see sustainability reporting as a tick box exercise and fail to realise the importance of using their strengths to tackle, head-on, the problems that seem to be always in the headlines. Imagine a world where most companies are finding solutions for the important issues in the societies they operate and rely on for profit/growth. Issues related to infrastructure, unemployment (most importantly, youth unemployment), support for local suppliers and economic development in areas of high poverty, or the availability of their products and services for those with low incomes.

License to operate – millennials
Millennials, who hold our future in their hands, are overwhelmingly pro-sustainability and are showing this with their every action. Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.(7)

Case studies of companies demonstrating positive impacts on the economy and society

Increasing supply chain pressure to get the smaller companies (that represent 90% of the global economy) to measure-manage-change
GRI Standards 308 and 414 supplier assessment (environment and social), used in combination with any of the other environmental or social standards, will accelerate positive change. Smaller companies wishing to be part of the supply chain of larger companies will, as a matter of fact, have to provide the information required by these standards. Most importantly, they will not be burdened with a full-scale report, as they will only be reporting on what matters (materiality).

What does this mean for the person in the street?

Experts on climate change are screaming ’emergency’, but politicians and other decision-makers around the world are either indifferent or dragging their feet, or not moving fast enough. Imagine a world where, despite these difficulties, the overwhelming majority of large companies, take action ASAP. A world where these companies take it upon themselves to clean their supply chains of emissions using GRI 308 Supplier Environmental Assessment in combination with GRI 305 Emissions. In essence, these companies will be using their buying power to implement the positive change that is so desperately needed and get the companies (SMEs) that are responsible for 90% of global economic activity to toe the line. At the same time, they will be able to tackle other key environmental issues (e.g. water, waste, biodiversity, and others).

Similarly, companies can leverage their strengths to implement positive outcomes for society. GRI 414 Supplier Social Assessment will help diminish bad practices in their supply chain. Companies will be able to address issues such as occupational health and safety, diversity and equal opportunity, child labour, forced or compulsory labour.

Case studies of companies cleaning their supply chain

How the GRI Principles can help companies avoid being accused of greenwashing
I believe that companies might hold back from implementing positive change, in fear of being accused of greenwashing. In the digital age we live in, information is instantly and freely accessible throughout the globe and this applies to companies, too: people are able to instantly access information about a company’s policies, the impact of its activity, its reputation, with or without the company’s consent(8). The GRI Reporting Principles go a long way in helping companies demonstrate that they are not greenwashing(9). By requiring companies to report according to these principles, GRI helps them create a first-class report regarding both content and quality, and demonstrate that they are taking solid, focused action (materiality) on their most important impacts. In essence, companies are building their armour and, if a question appears on social or other media, they are able to simply say ‘we are dealing with this impact in a responsible way, you can find information on how we are constantly improving in our GRI Standards Sustainability Report’.

Strategy – Strategy – Strategy
Seeing 90% of the ‘forest’ (SMEs taking action) is material
In my opinion, we need to step back and see the forest. Small and medium-sized enterprises (SMEs), responsible for around 90% of global economic activity, must begin to measure, manage and change. By using the proposed standards we:
1) put in place the foundation for a solid strategy to address the urgent sustainability issues outlined above
2) help companies demonstrate in no uncertain terms that they are spearheading positive change ASAP and promoting social and environmental responsibility throughout their supply chains(10)
3) get more of the SMEs, which represent 90% of global economic activity, to engage in focused reporting (material topics)
4) streamline reporting for SMEs that will not be burdened to provide a full report.

Action has to be taken yesterday – US$12 trillion is the cherry on the cake
In view of the pressing issues we are facing regarding the environment, economy and society, we need to take urgent action. I invite companies to take positive action now, using the above-mentioned GRI Standards and report their progress in their next reporting cycle. The cherry on the cake is not just creating a better, more sustainable world for all of us. According to the ‘Better Business, Better World’ report by the Business and Sustainable Development Commission (BSDC), sustainable business practices will, by 2030, create, for corporations, tremendous market opportunities worth US$12 trillion Tweet This! (11).

London Stock Exchange guidance for CSR/ ESG/ Sustainability reporting

Gerasimos — Thu, 27 Sep 2018 14:51:13 +0000

Once, environmental, social and governance (ESG) issues were a concern only among asset owners, asset managers, banks, brokers and investment consultants. Today, however, investors routinely consider a company’s ESG performance along with other financial and strategic information, to better understand its future prospects and make informed investment decisions.

Responding, accordingly, to increased investor demand for a more consistent approach to ESG reporting, the London Stock Exchange published an ESG reporting guide to help companies better understand what ESG information they should provide and how they should provide it.

ESG-related information is ever more important to investors

A company’s human rights, health and safety, corruption and transparency performance is increasingly used to draw conclusions about the quality of management, exposure to business risks, and ability to leverage business opportunities.

ESG-related information has changed from being a “peripheral” part of investment analysis. Investors want to see how companies respond to climate, demographic, technological change and political developments, as well as how they benefit from the transition to the green economy Tweet This!. Today, almost all leading institutional investors of UK and Italian listed companies are signatories to the United Nations-supported Principles for Responsible Investment (PRI). Communicating with investors clearly and accurately on the ESG aspects of a company’s performance, providing them with complete, consistent, reliable, comparable and clear ESG information, is, thus, highly important.

It is also worth noting that ESG reporting does not just concern larger companies. According to Mark Zinkula, CEO, Legal & General Investment Management, it is about “all issuers, regardless of size, reporting relevant and material information to investors so that they can make better-informed investment decisions”.

Benefiting from ESG reporting

By disclosing the information that investors are looking for, businesses can prove that they are effectively managing business risks and identifying opportunities. Most importantly, companies that publish high quality information regarding the longer-term implications of ESG for their business are, research shows, increasingly more likely to attract and retain long-term investors. In addition, such businesses can also reduce the cost of capital and increase their ability to raise new capital to finance sustainable projects. Similarly, having a coherent view on ESG issues and strategy enables them to grasp opportunities presented by the unfolding sustainable and green economy.

Facts and figures

60 per cent of assets managed for EU investors incorporate sustainable investment strategies
Signatories to the United Nations-supported Principles for Responsible Investment (PRI) represent today $60trn in assets under management, up from $22trn in 2010
The GRI Sustainability Reporting Standards are the most widely used standards for ESG reporting globally: 61 per cent of European corporate responsibility reporters have used the GRI framework to date
In 2016, more than 80 per cent of the world’s top economies by GDP mandated ESG reporting in some form

What should businesses do?

To adequately respond to the growing significance of ESG issues among investors, companies should:

Explain the importance of environmental, social and governance factors to their business models and strategy
Explain how ESG issues may affect their business through, for example, reputational damage, employee turnover or license to operate, and how these impacts may affect business strategy and financial or operational performance
Explain how they plan to make the most of the new opportunities and revenue streams created by green and socially beneficial products and services
Identify the parts of the business that manufacture or provide goods, products and services which deliver environmental solutions and support the transition to a green economy

78% of the world’s 250 largest companies report in accordance with the GRI Standards

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.

FBRH GRI Standards Certified & ISEP recognised Sustainability Course | Venue: London LSE

By registering for the next 2-day FBRH GRI Standards Certified & ISEP recognised course you will be taking the first step in gaining the many benefits of sustainability reporting.

References:

This article is based on published information by the London Stock Exchange. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the publication’s meaning. If you would like to quote these written sources from the original please revert to the following links:

https://www.lseg.com/sites/default/files/content/images/Green_Finance/ESG/2018/February/LSEG_ESG_report_January_2018.pdf

https://www.lseg.com/esg

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Laying the foundation for good communication with responsible ESG/ sustainability reporting

Gerasimos — Fri, 12 Aug 2016 06:45:43 +0000

Responsible ESG/ Sustainability reporting implemented through a structured, methodical approach (identify-measure-manage-change) is of paramount importance for good communication. It provides a solid foundation for companies to succeed in the long-term by building and maintaining favourable reputations and relationships with key stakeholders for business success (for example: investors, top talent, local communities, clients, business partners et cetera). Your responsibly prepared ESG/ sustainability report becomes a valuable source of information and a reference for your company to demonstrate that it is already taking action through a methodical and structured approach – and that it does not leave anything to chance.

Good communication is evermore important in the digital age we live in. Information is instantly and freely accessible throughout the globe and this applies to companies, too: people are able to instantly access information about your company’s policies, the impact of its activity, its reputation, with or without your consent. Whether you are aware of it or not, conversations could be taking place about your company and people take action and make choices based on what information they have available.

Two key questions:

1) How will your company or organisation benefit from the transition to the sustainable (green) economy?

2) Are your competitors better prepared, gaining a competitive advantage?

Your competitors will gain a competitive advantage if they are better prepared/preparing for:

• Changes and stricter regulations regarding emissions, adjusting their products and services accordingly.

• Changes in buying patterns and investment decitions taken by newer generations which are overwhelmingly

pro-sustainability.

• Stricter stock exchange rules (World Federation of Exchanges (WFE) fully aligned with GRI Standards)

• The EU Directive: Large Companies must report non-financial information. Sustainability reporting is at centre of EU’s Green Deal with ambitious legislative changes backed by €1 trillion investment over the next decade. 50,000 EU and non-EU companies will have to report.

• Investors who want to see that a company is well-prepared for the foreseeable future.

• Ever growing supply chain pressure. Companies are choosing to do business with corporations that can provide sustainability-related information and data and can demonstrate that they are aware of environmental, economic and societal risks, taking continuous action. These companies are looking for long-term, sustainable relationships.

Responsible ESG/sustainability reporting acts like a radar for companies by enabling them to be proactive, foresee risks and take action before situations spiral out of control. The well-recognised GRI Standards for ESG/sustainability reporting are an important tool used globally to instill trust in people in our ever-connected world where there is increasing concern about climate change and the protection of our fragile environment. Equally important is that with the GRI Standards, your company gets to build trust and deal responsibly and conscientiously with its impacts on its key stakeholders (clients, suppliers, shareholders, local communities, NGOs or local government) who can hold it back or stop it from reaching its objectives. For instance, it is a well-known fact that trust is a key element in a relationship with clients. By building trust your company creates loyalty and long-term commitment to its services and brands.

Leveraging the GRI Standards to Gain a Competitive Advantage

Sustaincase — Fri, 22 Jul 2016 16:49:32 +0000

The GRI Standards are the world’s most widely used sustainability reporting standards: 80% of the world’s 250 largest companies use them to report. They identify their most important impacts and proceed by measuring, managing and changing. The GRI Standards are not a box ticking exercise: they can be used by any company, regardless of size, sector or location, not only to get a clearer picture of future risks and challenges, but also to identify and act on opportunities. Responsible sustainability reporting is like having your radar switched on.

A key insight is that a growing number of companies, who are sustainability reporters (and responsible individuals), are overwhelmingly choosing sustainable products and services. Most importantly, sustainability reporters are choosing to do business with companies that tie in well with their sustainability efforts. Research by well-recognized institutions shows that sustainability is an emerging megatrend. In addition to supply chain pressure, regulators are forcing companies to disclose non-financial information (in the EU, all large companies are required to report).

Moreover, companies who are reporting, in their effort to reduce their impacts even further, investigate and chose products and services that help them to do so.

How Desso gains a competitive advantage by controlling recycling

Consider Desso, which, by leasing carpets, is better able to ensure products are returned for recycling. By offering customers (e.g. hotel chains, governments, corporate offices, retail outlets, and healthcare) the option to lease rather than own carpets, Desso controls recycling and helps customers demonstrate, in their sustainability reports, how they manage to reduce even further their own impacts. Other carpet manufacturers who are not able to offer such solutions are doing so to their own detriment.

How did Coca-Cola handle problems with its bottled water business in Japan?

“Minaqua”, Coca-Cola’s bottled water brand in Japan, was suffering because it was not connecting to two key insights:

In Japan, recycling is not a nice-to-have, it’s a way of life
Real estate: a typical unit in Tokyo, which is home to 13 million people, is about 70 sq.m.

In 2009, Coca-Cola introduced an all-new Japanese bottled water brand, ILOHAS, whose bottles weighed just 12 grams when empty (40% less than the company’s other plastic bottles), and additional benefits included:

a 3,000 tons reduction in the amount of carbon dioxide produced during the manufacturing process
lighter delivery loads
recycling shipments with less wasted air
a smaller number of waste disposal emissions

As the ILOHAS bottle is so light, it can easily be twisted by hand into a thin, gnarly scrap of plastic, and take up significantly less room in recycling bins. Coca-Cola’s simple promotion message, “1. Choose 2. Drink 3. Twist 4. Recycle” went viral in Japan, with consumers posting videos on YouTube featuring them twisting. The product sales spiked by double digits in less than six months, along with a dramatic rise in recycling.

I invite you to take action, identify your most important impacts, measure, manage, and change and become, with your positive contribution, part of a positive chain reaction that is changing our world.

Simon Pitsillides

Editor
SustainCase

MBA Marketing, Fellow of the Chartered Institute of Marketing, GRI Nominated Trainer, ISEP Approved Trainer

References:

This article was compiled using the case studies below. For the sake of readability, we did not use brackets or ellipses but made sure that the extra or missing words did not change the original meaning. If you would like to quote these written sources from the original please revert to the following links:

1) Case study: How Desso designs and produces recyclable products containing recycled content, www.sustaincase.com

2) Design to grow (David Butler & Linda Tischler 2015)

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How not to be accused of Greenwashing

Gerasimos — Sat, 09 Apr 2016 09:36:54 +0000

Greenwashing (misleadingly using green PR or green marketing to create a perception that a company’s products or services are environmentally friendly and/or socially responsible) is not new, but is being increasingly used by businesses due to heightened consumer demand for environmentally friendly/ socially responsible brands and services.

How can you make sure your company is not greenwashing? Tweet This!

The three key questions you should be asking to make sure your company is not greenwashing are:

Have you already identified your most important impacts (materiality), the effect your company has on the economy, the environment and/or society – which in turn can illustrate your organization’s contribution to sustainable development?
Are you taking real, specific, continuous actions to minimise negative and increase positive impacts (measure > manage > change)?
Are you dealing with your impacts in an all-round, complete way? Is your company dealing openly and effectively with its environmental, economic and social impacts – instead of just focusing on actions that are good for publicity and PR?

Building trust with key stakeholders which are important for business success

Meaningful sustainability reporting that builds trust with stakeholders (such as top talent, investors, customers, suppliers, business partners, regulators, NGOs and local communities) is of key importance for any company producing a sustainability report. It can be achieved by:

demonstrating that you have a plan of action and will benefit from the sustainable “Green” economy.
providing, through the report, a balanced view of the organization’s sustainability performance, including both positive and negative aspects
engaging stakeholders based on internationally recognized guidelines
mapping the organization’s value chain and taking action on all impacts (due diligence)
making sure material topics chosen are consistent with industry best practices.
providing information on material topics and narrative context for significant impacts
connecting sustainability impacts and the company’s business strategy

Applying GRI’s Reporting Principles is the key to avoid ‘greenwashing’ – especially the following:

Balance: Both positive and negative impacts should be reported on, to allow a reasoned evaluation of sustainability performance.
- Does the emphasis on the various topics reflect their relative priority?
- Are both favourable and unfavourable results and topics being covered?
Comparability: Stakeholders should be able to analyze the organization’s performance in comparison with other organizations and over time.
- Can information be compared on a year-to-year basis?
Timeliness: Organizations should produce reports regularly, providing information in time for stakeholders to make informed decisions.
Accuracy: The reported information should be accurate and detailed.
- The margin of error for quantitative data is not sufficient to influence substantially the ability of stakeholders to reach appropriate and informed conclusions.
Clarity: Information should be comprehensible and accessible to stakeholders.
- Excessive and unnecessary detail must be avoided.
- Is information available to stakeholders, including those with particular accessibility needs, such as differing abilities, language or technology?
Verifiability: The processes used to gather, record, compile, and analyze information in such a way that the information can be examined to establish its quality.
- Is the scope and extent of external assurance identified?
- Has your assurance provider passed the GRI exam and is a GRI Certified Sustainability Professional (name published on the GRI website)?

Taking action to ensure that you are not greenwashing with the use of the GRI Standards

We propose you use the GRI Standards: an all-round, complete, structured, methodical and highly flexible approach adopted by 80% of the world’s 250 largest companies. Whether you are seeking to take action on the UN Sustainable Development Goals (SDGs) or need to implement a sustainable development plan for your company, the GRI Standards guide you every step of the way to identify and implement the decisions that matter. Most importantly, detailed requirements and guidance are provided, so you can begin to take action to minimise not only your company’s negative impacts, but also negative impacts within your supply chain.

Key facts about the Global Reporting Initiative’s (GRI) Standards:

80% of the world’s 250 largest companies issue sustainability/ ESG reports using GRI’s Sustainability Reporting Guidelines.
GRI is co-constructing with the EU the Directive for non-financial reporting (CSRD)
The GRI Standards can be used by any organization, regardless of sector, size and location.
GRI and the UN Global Compact have joined forces to enable measuring and reporting on the SDGs with the use of the GRI Standards.
Under the terms of a Memorandum of Understanding signed in 2010, the UN Global Compact adopts the GRI Standards as the recommended reporting framework for companies to communicate on progress made.
The Global Reporting Initiative has global strategic partnerships with the Organization for Economic Co-operation and Development, the United Nations Environment Programme and the United Nations Global Compact, with its framework enjoying synergies with the guidance of the International Finance Corporation, the International Organization for Standardization’s ISO 26000, the United Nations Conference on Trade and Development and the Earth Charter Initiative.
The GRI Standards main focus focused on taking action on what matters where it matters: companies identify their impacts on the environment and stakeholders, measure, set targets, take action to minimise their negative impacts and increase their positive impacts, report the outcomes in their ESG/ Sustainability report.

GRI Standards Certified & ISEP recognised course – LONDON

Geared for busy professionals:

This GRI Certified, ISEP Approved and CIM recognised course is geared for busy professionals who want to understand how to proceed and create a 1st Class GRI Standards Sustainability Report and have a plan for immediate action without wasting time.

Learn how to prepare a 1st Class GRI Standards Sustainability Report to address:

• the Sustainable Development Goals (SDGs)

• the EU Directive for Non-Financial Reporting

• Stock Exchange ESG Rules

• other frameworks /regulations

The FBRH GRI Certified courses take place every month in London (realtime remote training or classroom courses). You can book your place at this link.

Successful participants receive certificates from the Global Reporting Initiative, Continuous Professional Development (CPD) and the Institute of Environmental Management & Assessment (ISEP).

78% of the world’s 250 largest companies report in accordance with the GRI Standards

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.

References:

This article was compiled using publications by GRI and information at www.fbrh.co.uk. For the sake of readability, we did not use brackets or ellipses. We made sure that the extra or missing words did not change the publications’ meaning. If you would like to quote these written sources from the original please revert to the links below:

https://www.globalreporting.org/resourcelibrary/Meaningful-reporting-How-to-avoid-greenwashing.pdf

GRI 1: Foundation

www.fbrh.co.uk

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