Producing a GRI G4 CSR Report: The First 5 Steps
So, you’re thinking about your company’s next sustainability report, or possibly producing your first one, and you want to make the move to Global Reporting Initiative’s newest standard: G4. Where do you start? What does it take? The following are the first 5 steps I recommend, based on my experience managing UPS’s latest corporate sustainability report (the first Comprehensive report in the U.S., launching July 30) and working on another company’s report at the Core level.
1. Get C-suite Buy-in
Don’t even think about pursuing GRI G4 unless your leadership has bought into it. Why? Because G4 is hard. It takes an enormous amount of time and effort – more than what G3 entails – and leadership needs to agree that G4 is a strategic initiative that they will invest in. Not only will the team producing the report be putting in extra hours, but additional departments such as Human Resources, Legal, Finance, Communications, Engineering, and others will need to make room on their plates to support the initiative. With this many departments in the mix, it’s vital to have leadership on your side when there’s pushback, and I can promise you, there will be pushback. GRI G4 goes so much further than its prior iteration in requiring information on governance and remuneration. For example, the G4-54 indicator requires the disclosure of the ratio of the highest paid person’s salary (most likely the CEO) to that of your workforce. For many companies out there, just thinking about putting that type of information in the public domain is beyond scary, it’s downright catastrophic. So how do you get past that? The answer lies in the support of your leadership.
2. Conduct a Materiality Analysis
Once your leadership has decided they are invested in moving toward G4, the next thing to do is conduct an exercise to determine which issues are most material to your company. By the way, conducting a materiality analysis is just one of G4’s requirements. Based on my experiences, I would strongly recommend that a neutral, third party be engaged to do this because it requires a significant amount of research, time, and expertise.
The purpose of the materiality exercise is to prioritize the information that goes into the sustainability report so that it’s solely focused on the top issues and concerns that are important to your company and its stakeholders. Though it’s tempting to include feel good stories like a one-off donation drive to support disaster relief, if it’s not tied to overall strategic initiatives, it shouldn’t be in your CSR.
3. Analyze GRI Aspects and Indicators
Equipped with a list of Material Aspects, courtesy of the materiality exercise, it’s now time to dig into GRI’s Reporting Principles and Standard Disclosures guidelines and understand what it is that you will need to report on. Many Aspects have several Indicators under them, and it’s important to read through them to understand the implications of what is required for full disclosure. There will be times when you find yourself reading the language over and over again, only to realize you still have no idea what it’s talking about. In those instances, it helps to jump on the Internet, looking for forums or, even better, reviewing how other G4 reports in your industry approach the disclosure. And, if you have engaged a third party to help you with your materiality exercise, you can always ask them.
4. Make Decisions: In Accordance? Core? Comprehensive
It’s time to make some decisions. Is your company truly ready to embark on the G4 path? If not, than maybe the best path forward is to produce a report that “references” G4, but is not “in accordance” (in accordance is GRI’s terminology). However, if you are ready, the next step is to determine the level you are going to report at: Core or Comprehensive? The biggest difference between the two is not just the amount of information being disclosed, it’s the type of information being disclosed. Unless governance reporting is already embedded in your company, the choice is Core. There is no shame in reporting at the Core level because it is quite an endeavor in and of itself. However, if you are committed to quality reporting, the ultimate goal will be reporting at the Comprehensive level, and it would be best to create an internal plan on how to get to that next level in the upcoming year(s).
5. Create a Plan
With a clear decision made, the next question you’re going to get asked is, “so, when will this be done?” Even though you have just completed a lot of legwork, so much more needs to be done. Interviews need to be scheduled with internal subject matter experts (SMEs), data and information needs to be hunted down, and then copy needs to be written. And by the time you are able to begin writing, you have only completed one third of the project. The next two thirds will be focused on getting the copy through a gauntlet of approvals, and then putting the words into an architected and designed layout. When it comes to copy, multiple rounds of extensive review will be required – SMEs will want to weigh in on what is written and leadership will want to verify the strategies discussed. This means that these reviews will not happen simultaneously, but will need to be done in sequence. Same goes for putting the copy in layout – expect multiple rounds of review with certain parties needing to be able to review it before others. Set the expectation that this report isn't going to happen over a handful of weeks, but rather a collection of months.
Producing a G4 report is a long, hard road, but it can be extremely rewarding. There’s nothing like seeing months of work come together at the end of a project and realizing that the amount of information it contains and the alignment that has happened within the company is truly game changing. Sustainability reporting might not save lives, but producing a G4 report has the potential to make a big impact, and for me, that is why I’ll do it again.