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Introducing sustainability
reporting for SMEs
This document is available for free
download on www.globalreporting.org
Ready to
Report?
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READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs
Contents
COPYRIGHT
This document is copyright-protected by Stichting
Global Reporting Initiative (GRI). The reproduction
and distribution of this document for information is
permitted without prior permission from GRI.
However, neither this document nor any extract
from it may be reproduced, stored, translated, or
transferred in any form or by any means (electronic,
mechanical, photocopies, recorded, or otherwise)
for any other purpose without prior written
permission from GRI.
Global Reporting Initiative, the Global Reporting
Initiative logo, Sustainability Reporting Guidelines,
and GRI are trademarks of the Global Reporting
Initiative.
© 2014 Global Reporting Initiative
ABOUT GRI
The Global Reporting Initiative (GRI) promotes the use
of sustainability reporting as a way for companies and
organizations to become more sustainable and contribute
to a sustainable global economy.
GRI’s mission is to make sustainability reporting standard
practice. To enable all companies and organizations
to report their economic, environmental, social and
governance performance and impacts, GRI produces free
Sustainability Reporting Guidelines.
GRI is a not-for-proft, network-based organization;
its activity involves thousands of professionals and
organizations from many sectors, constituencies and
regions.
www.globalreporting.org
Contact: info@globalreporting.org
DISCLAIMER
Neither the GRI Board of Directors, the Stichting
Global Reporting Initiative or its project partners
can assume responsibility for any consequences
or damages resulting, directly or indirectly, from
the use of GRI publications. The fndings and views
expressed herein do not necessarily represent the
views, decisions or the stated policy of GRI or its
project partners, nor does citing of trade names or
commercial processes constitute endorsement.
FOREWORD 3
PURPOSE OF THE BOOKLET 3
SECTION A: VALUE OF SUSTAINABILITY
REPORTING FOR SMEs 4
SECTION B: GRI REPORTING PROCESS
FOR SMEs 8
ACKNOWLEDGEMENTS 19
PUBLICATION DEVELOPMENT
Content development
Enrique Torres Rodriguez, GRI
General supervision
Ásthildur Hjaltadóttir, GRI
Text Revision
Carinne Allinson
Design and Layout
Mark Bakker, Scribbledesign
Photography
Cover: © iStockphoto.com
Page 4, 8, 15, 17, 18, 19: © iStockphoto.com
Page 14: Creative Commons/Thomas
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Foreword
Purpose of the booklet
your company can measure its performance and manage
change. This will drive improvement and innovation inside
your company.
In recent years, Small and Medium-sized Enterprises (SMEs)
in various regions have begun to publish their sustainability
reports. GRI has followed this movement through a number
of projects since 2008. SMEs that have participated in these
projects say that the value of the reporting process was
much greater than they had anticipated at the beginning of
the process. They found that sustainability reporting helped
them to identify their most signifcant issues to focus on and
from there improve productivity and make cost savings. In
addition, their competitiveness often improved after gaining
access to new markets and new clients.
To conclude, GRI’s experience is that many SMEs believe that
there is a clear connection between sustainability reporting
and achieving real change within their company.
With that in mind, GRI invites you to get “Ready to Report”!
Important to know!
A Small and Medium-sized Enterprise (SME) is a category of
enterprise that falls below a certain threshold in size, often
determined by number of employees and annual turnover
(revenue). These thresholds are usually determined by
governments and can vary between sectors, with a maximum
of 250-1,000 employees and a turnover of up to €50 million.
Further criteria determine whether a company is either medium
or actually small. Some countries even recognize a “micro”
enterprise as an even smaller type of business category.
According to the United Nations Industrial Development
Organization (UNIDO), SMEs make up more than 90% of
businesses worldwide and on average account for 50% of the
Gross Domestic Product (GDP) of all countries and for 60% of
their employment.
As a small or medium-sized company you are reading
this booklet because you want to know more about
sustainability reporting. Let’s assume that your company
is one of the increasing number of Small and Medium-
sized Enterprises (SMEs) that recognizes the need to better
understand your sustainability impacts and how to make
your business operations more sustainable and maybe even
communicate your sustainability performance. But you
probably have a lot of questions, such as… Why should your
company do a sustainability report? Why should you use the
Sustainability Reporting Guidelines of the Global Reporting
Initiative (GRI)? What would your company have to do to take
the frst steps? This booklet will help you to answer these
questions.
A sustainability report provides information on your com-
pany’s most important impacts – positive or negative
– on the environment, society and the economy. GRI’s
Sustainability Reporting Guidelines are the most widely
used, comprehensive sustainability reporting standard in the
world. G4, the fourth generation of the GRI Guidelines, was
launched in May 2013 and involved extensive stakeholder
consultation and dialogue with hundreds of experts all
around the world, from a wide variety of sectors, including
companies, civil society, labor organizations, academia,
and fnance. The aim of G4 is to help reporters prepare
sustainability reports that matter – so that robust and
purposeful sustainability reporting becomes standard
practice. Your company can use these Guidelines to develop
your sustainability report and in the process can generate
reliable, relevant and standardized information on your
sustainability impacts and performance. This information can
then be used to assess opportunities and risks, and enable
more informed decision-making – both within your business
and among your stakeholders, such as your clients. By
developing and communicating your understanding about
the connections between sustainability and your business,
This booklet is for SMEs that are considering whether
sustainability reporting is relevant for them and if so, how to
start the reporting process. It provides a simple introduction
to sustainability reporting using the GRI G4 Guidelines so
that your company can take the frst steps in its sustainability
reporting journey. This will be done by:
• Making the case for sustainability reporting for SMEs:
Section A looks at the internal and external benefts of
sustainability reporting based on the experiences and
testimonies of SMEs that GRI has engaged with in a number
of projects since 2008.
• Introducing fve easy steps to preparing a sustainability
report using the G4 Guidelines: Section B details the steps
for creating a GRI sustainability report using the fve phase
GRI model for a sustainability reporting process: Prepare,
Connect, Defne, Monitor and Report.
Foreword
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Contents
Section A
Value of sustainability
reporting for SMEs
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1. Value of internal changes (internal benefts)
2. Value of recognition (external benefts)
This section sets out what SMEs have discovered is the
value of sustainability reporting. It is based on testimonies
from nearly 400 SMEs that the GRI has worked with in a
number of GRI-initiated projects. The section is divided
into two parts: “The value of internal changes” (internal
benefts) and “The value of recognition” (external
benefts).
Value of sustainability reporting for SMEs
Value of sustainability
reporting
1) These projects have been implemented under GRI’s GANTSCH Program from 2009 to 2012 and the Business Transparency Program from 2013.
See www.globalreporting.org/reporting/reporting-support/support/Pages/default.aspx for more information.
Vision &
strategy
Management
systems
Strengths &
weaknesses
Employee
motivation
VALUE OF
INTERNAL
CHANGES
(INTERNAL
BENEFITS)
VALUE OF
RECOGNITION
(EXTERNAL
BENEFITS)
Reputation
& trust
Attracting
funding
Competitive
advantage
Stakeholder
engagement
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1. Value of internal changes (internal benefts)
1.1 DEVELOP VISION AND STRATEGY ON
SUSTAINABILITY
The reporting process encourages your company to identify
your vision and strategy for operating in a more sustainable
manner, and for ofering more sustainable products and
services. During the reporting process, you are able to
identify a link between the implementation of the reporting
process and your strategic development.
1.2 IMPROVE MANAGEMENT SYSTEMS, INTERNAL
PROCESSES AND SET GOALS
A key beneft of the reporting process is that it allows your
company to track progress and highlight areas needing
improvement, so that you can manage what you measure
and make changes where necessary. Once your company
tracks and assesses its performance, you can identify areas
where you could be doing better, e.g. potential productivity
improvements and cost reductions. Once your company
starts reporting, there will be increased expectations that you
continually improve in relation to your performance goals.
1.3 IDENTIFY STRENGTHS AND WEAKNESSES
The reporting process provides early warning of trouble
spots – and shows up unexpected opportunities. These
discoveries can help your company’s management to
evaluate potentially damaging developments before they
emerge as unwelcome surprises (i.e. risk management), and/
or grab opportunities before your competitors. It is also
possible that during the reporting process you discover that
some issues are not as well managed as you frst thought.
This can put at risk the reputation of your company. It is also
common that your company will identify critical issues which
had not been considered before.
1.4 ATTRACT, MOTIVATE AND RETAIN EMPLOYEES
Your company’s high performance standards and reputation
are “intangibles” that help to attract and motivate employees.
The reporting process shows that your company is not just
“talking” about sustainability issues, but is also prepared to
publicly discuss, measure and act on them. This will increase the
trust between your company as an employer and its employees
and so enhance your reputation. In the end, your workforce will
contribute more and stay longer if it is motivated, empowered,
and in agreement with strategic objectives.
“Sustainability reporting instills commitment to
monitor those issues more accurately and also to
enhance the engagement of stakeholders in order
to decrease negative impacts and increase positive
ones.” - Jorge Quintas Serrano, Owner/Director, Quintas &
Quintas, Portugal (Electrical Sector)
“Reporting within the GRI Framework is about
asking questions about the economic, social and
environmental impacts of your activities and looking
for answers together with your staf. This process leads
to increased employee awareness as well as motivated
staf and increased productivity rates.” - Seyhan Yilmaz,
Marketing Manager, Topkapi Iplik San. Ve Tic., Turkey
(Textile Manufacturing)
“We have seen and observed that there are many
savings possible as well as ways to make ourselves more
efcient. This was only possible after data collection
on energy, material consumption and monitoring
productivity of our workforce.” - Imran Shabbir, Managing
Director, Ali Trading Co. Ltd, Pakistan (Sporting Goods
Manufacturing)
“Completing a sustainability report meant refecting
and analyzing, learning to put quantifable values on
the sustainability of all parts of our business. This helped
us to develop short-, medium- and long-term business
objectives.” - Roser Bombardó, Manager, Socarrel SSL, Spain
(Forestry & Environmental Advisory Services)
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2. Value of recognition (external benefts)
2.1 ENHANCE REPUTATION, ACHIEVE TRUST AND
RESPECT
Your company’s key stakeholders are infuenced by the
reputation, respect and trust you have earned. As such, there
are always concerns about how much the reputation of your
company might be damaged by public disclosure on potential
risks or bad news. The natural instinct is for you to avoid such
admissions; however, balanced reporting can create trust and
respect. This means reporting both on what goes well and also
on where there is room for improvement.
2.2 ATTRACTING FUNDING
Providers of fnancial capital are asking tough questions of
companies these days. Lending institutions and investors
increasingly take into consideration performance in diferent
aspects of sustainability issues when evaluating companies,
e.g. good governance, ethical values, social priorities and
environmental actions. Non-proft organizations are in a similar
situation where they are dependent on donors and/or sponsors
to fund their project activities. Implementing a GRI reporting
process can help your company to improve the general
management of sustainability issues and be prepared to talk
openly about your performance. This demonstrates high-quality
performance management which can provide access to funds.
2.3 TRANSPARENCY AND DIALOGUE WITH
STAKEHOLDERS
The sustainability reporting process is an important tool to
achieve transparency and disclose sustainability performance
to your company’s stakeholders. As an SME, your stakeholders
are likely to be clients, suppliers, local community pressure
groups, providers of fnancial capital, employees and owners.
Through the relationships which the reporting process can
create between your company and its stakeholders, you
can receive feedback on your business operations, which
will enable you to review processes and identify business
opportunities.
2.4 ACHIEVE COMPETITIVE ADVANTAGE AND LEADERSHIP
Sustainability reporting is still not common practice across all
regions and sectors, especially for SMEs. For this reason, your com-
pany can be identifed as a “leader in sustainability”. This is especial-
ly important because an increasing number of larger companies
screen potential and current suppliers for their economic, social and
environmental performance and the impact this may have on their
own supply chain. By being able to show existing and potential
clients your company’s commitment to conducting business in a
sustainable manner, you increase your chances of being selected as
a preferred supplier by larger companies.
“Reporting transformed us and diferentiated us from the
others, made the exporters notice us and we are now seen as
pioneers. Banks and fnancial institutions also recognize our
eforts.” - Julio Hernandez Flores, Head of Worker Health, Security
and Wellbeing, Soc. Inmobiliaria Campos del Carmen Bajo Ltda,
Chile (Agricultural Industry)
“Sustainability reporting has allowed us to demonstrate the
synergies with those who we work with on a daily basis. As such,
it has strengthened our role in the local economy of our territory
and by doing so enhanced our company’s reputation.” - Rusó
Macau Oliva, Managing Director Productes Alimentaris, Spain
(Gourmet Food Production)
“The process of sustainability reporting is a benefcial
initiative, especially in the sense that any stakeholder can see
and understand what the company is doing with regards to
sustainability and other issues. Stakeholder engagement was
a new and rewarding process and allowed the development of
a shared understanding of what sustainability means for Sree
Santhosh.” - Vinoth Kumar, Managing Director, Sree Santhosh,
India (Textile Garment Manufacturing)
“The sustainability report enables us to be transparent about
the management and current status of our company with our
clients and customers. This helps us to consolidate our current
client base and also acquire new ones.” - Oriol Antúnez Llonch,
General Manager, Fomartgeries Montbru SA, Spain (Cheese
Manufacturing)
To conclude, GRI’s experience is that SMEs operating in very diferent contexts can all implement sustainability
reporting not just to “do good” but also to become better businesses in the process.
So, let’s now see how an SME can begin to take its frst steps to doing a report using the GRI G4 Guidelines…
Section B
GRI reporting
process for SMEs
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The GRI sustainability reporting process will help your company to implement the steps for creating a GRI sustainability
report. It also includes proposals for actions that your company can undertake to address its sustainability impacts and the
plans needed to support these actions. GRI divides the reporting process into fve phases:
Let’s now look at the fve phases and the activities and decisions that need to be taken in each phase. In doing this, we will
assume that your company will use the G4 Guidelines to prepare your sustainability report.
Introduction
1. Prepare
2. Connect
3. Defne
4. Monitor
5. Report
Introduction: Model of the reporting process
GRI reporting process for SMEs
P
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pa
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e
C
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f
n
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M
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p
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G4 is available in several languages. You can fnd an
overview of this on the GRI website.
Organize and hold the frst set of meetings with
those directly involved in the reporting process.
The objectives for these meetings are the following:
❱ ❱ Ensure top management are committed to the
process.
❱ ❱ Identify an initial list of sustainability topics
that are potentially relevant and that the senior
decision-makers in your company want to act
and report on. Think about your company’s
business goals and the sustainability context
in which you operate and list the economic,
environmental and social impacts which might
be most important, as a starting point. You can
use this list later on to inform your decisions on
which stakeholders to engage with and how
(Connect phase) and then to help you identify
all possible relevant topics (Defne phase).
❱ ❱ Reach agreement on the action plan for the
reporting process: that is, what activities and
decisions need to be taken (by whom), at each
stage of the reporting process. The plan should
also include budget estimations and staf
resources where necessary. GRI recommends that
your company plans for around 10-12 months for
the full reporting process.
Decide if your company will complete a frst
report that meets the requirements of the GRI G4
Guidelines or only uses G4 for reference.
4
For your company’s report to meet the G4
requirements, it will need to meet the ‘In
Accordance’ criteria, either Core or Comprehensive.
Choose an ‘In Accordance’ option that is most
appropriate for your company.
5
For SMEs that are
frst-time reporters, GRI recommends the Core ‘In
Accordance’ option.
Decide if your company will compile a standalone
sustainability report or whether the sustainability-
related information will be included within other
reports (e.g. Annual Report).
The main objective during this phase is to get ready to
start the reporting process.
Checklist
The following is a checklist of the main activities and
decisions for your company at this stage:
Select the sustainability reporting team that will
coordinate the reporting process. Although this may
be just one person (in the case of a micro company,
for example), it is recommended that you have a team
of staf members, preferably representing each of the
departments in your company.
The members of the sustainability reporting
team need to familiarize themselves with the G4
Guidelines.
2
This does not mean that they need to
know every detail of G4. However, they need to know
how the G4 is structured and where to fnd relevant
information when needed. GRI recommends that
you begin by reading the document ‘An Introduction
to G4: The next generation of sustainability reporting’
3
before going into the details of the G4 Guidelines. This
provides a simple overview of the key features and
elements of the G4 Guidelines.
Important to know!
G4 is presented in two separate documents:
Reporting Principles and Standard Disclosures. GRI’s
Reporting Principles are the criteria that should be used
to guide your decisions made throughout the reporting
process. They consist of four Principles for Defning
Content and six Principles for Defning Report Quality.
The Standard Disclosures are the GRI ‘questions’ you
answer in your report. They consist of General and
Specifc Standard Disclosures.
Implementation Manual: This is the ‘how to’ section,
and provides detailed advice and recommendations for
reporting with G4.
The G4 Guidelines are also available as an online tool. You
can access this from the GRI website. It is important that
you are familiar with the G4 structure before using the G4
online tool.
1. Prepare: Plan your reporting process
2) The GRI G4 Guidelines can be downloaded for free from the GRI website: www.globalreporting.org/reporting/g4/Pages/default.aspx.
3) This is available as a free download from the GRI website: www.globalreporting.org/resourcelibrary/GRI-An-introduction-to-G4.pdf.
4) See G4 Reporting Principles and Standard Disclosures, pp. 13-14.
5) See G4 Reporting Principles and Standard Disclosures, pp. 11-13.
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READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs
Decide if your company’s report will also
address other (national and/or international)
standards, frameworks and regulations, such as
regulatory reporting requirements on labor or the
environment that your company has to follow.
Important to know!
The G4 Guidelines include references to other widely
recognized frameworks, and are designed as a
consolidated framework for reporting performance
against diferent codes and norms for sustainability.
These global frameworks include the OECD
Guidelines for Multinational Enterprises, the United
Nations Global Compact Principles, and the UN
Guiding Principles on Business and Human Rights. G4
also includes references to the major international
conventions which often inform national legislation.
For example, the International Labour Organization
(ILO) Conventions for labor regulations.
Hold meetings with your company’s staf members
to explain what is going to be done, why this is
important for your company and what will be
expected from diferent departments at diferent
stages of the reporting process. This should be
the beginning of ongoing communication with
staf to ensure that there is understanding and
commitment across the company throughout the
reporting process.
4) See G4 Reporting Principles and Standard Disclosures, pp. 13-14.
5) See G4 Reporting Principles and Standard Disclosures, pp. 11-13.
“Reporting our sustainability achievements and
challenges represents the opportunity to share and
compare our environmental and social performance with
international practices, and to identify the areas that
have not yet been included in our sustainability strategy.”
- Carlos Marin Morales, General Director, Alltournative SA de CV,
Mexico (Tourism Sector)
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Identify key stakeholders that your company will
talk to for feedback on the main sustainability
topics and impacts for your company. The initial list
of potentially relevant topics that your company
identifed in the Prepare phase can be useful to
inform your decisions on key stakeholders.
Consider how your company will communicate
with your key stakeholders. When preparing
stakeholder engagement there are two
important factors to consider: the objective of
the consultation (what to ask) and the format of
the consultation (how to ask). The initial list of
potentially relevant topics that your company
identifed in the Prepare phase can be used to
inform your decisions on what to ask the key
stakeholders. The consultations can take place in
groups or individually. It can be face to face or at
a distance. How to engage stakeholders depends
on the objective of the consultation, the type of
stakeholder(s), the nature of your company and
also available resources.
The outcome of your company’s stakeholder
engagement is a list of the sustainability topics
that your stakeholders consider important. The
sustainability reporting team will then need to
review the list to present recommendations to the
senior decision-makers of topics to be reported on.
The main objective during this phase is to identify who
your company’s key stakeholders are and how you will
engage with them. This process is called ‘stakeholder
engagement’.
This is important because when deciding what to include
in your report, you will have to take into consideration the
points relating to your company’s activities which these
groups and individuals consider most important.
Important to know!
In the GRI Guidelines, stakeholders are defned as “entities
or individuals that can reasonably be expected to be
signifcantly afected by the organization’s activities,
products, and services; and whose actions can reasonably
be expected to afect the ability of the organization to
successfully implement its strategies and achieve its
objectives.” (G4 Implementation Manual, p. 9)
Checklist
The following is a checklist of the main activities and
decisions for your company at this stage:
As a start, it is recommended that you make sure you
understand the Stakeholder Inclusiveness Principle.
6
Read the Implementation Manual (pp. 9-10) to
understand the GRI defnition of stakeholders and also
what GRI provides as guidance on how to apply this
Principle.
2. Connect: Collect input from key stakeholders
6) The Stakeholder Inclusiveness Principle is one of the Principles for Defning Report Content.
“As a company ofering sustainability services, it is important
for us to live out our values and lead by example in running
a sustainable business. Reporting gives the company an
opportunity to understand the consequences and implications
of striving to improve our sustainability performance.” - Nick
Rockey, Managing Director, Trialogue, South Africa (CSR Advisory
Services)
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The G4 Guidelines set out a process of four steps
(Identifcation, Prioritization, Validation and Review) to
help you decide on your company’s material Aspects
and Boundaries. Each of the four steps covers specifc
elements of the ways to defne ‘what matters and where
it matters’, and employs particular GRI Principles for
Defning Report Content.
Important to know!
The model for GRI’s four step process appears in the G4
Reporting Principles and Standard Disclosures, p. 90. It
is further explained in detail in the G4 Implementation
Manual, pp. 31-39. This process is Guidance and while it is
recommended by GRI, it is not obligatory to follow for an
organization to do a report that is ‘In Accordance’ with G4.
However, companies are required to apply the Principles for
Defning Report Content and explain how they have applied
them to defne the report content.
Checklist
The following is a checklist of the main activities and
decisions for your company at this stage:
Identifcation:
❱ ❱ Identify a broad range of sustainability topics which
may be relevant. Use the Reporting Principles
for Stakeholder Inclusiveness and Sustainability
Context to do this.
7
❱ ❱ For each topic which has been identifed as relevant,
your company’s sustainability reporting team will
need to assess the related impacts, and where those
impacts occur.
❱ ❱ The impacts may occur within your company
but can also occur in organizations outside your
company that you have a relationship with (e.g.
suppliers, distributors). It may also be that impacts
for the same topic occur within and outside your
company (e.g. emissions).
8
Prioritization:
Narrow the list of relevant topics from the previous
step down to your company’s most important
topics (“material Aspects”) and where the main
related impacts occur (“Boundaries”). The
Reporting Principles for Stakeholder Inclusiveness
and Materiality should be used in this step.
9
Tasks
for the sustainability reporting team during the
The main objective during this phase is to defne
the material Aspects (what matters) and Boundaries
(where it matters) for your company’s report. This
means defning the issues that are really important t o
achieve your company’s sustainability goals, respond
to the information needs of your stakeholders and
manage your impacts on the economy, environment
and society. These are issues directly related to your
company’s core business strategy. In this way, G4 places
the concept of “materiality” at the heart of sustainability
reporting.
The following terms from the above paragraph are
very important for understanding the GRI process for
deciding on your report content. Therefore, let’s look at
how each are defned in the G4 Guidelines.
“Aspect” is the name that GRI gives to sustainability
subjects covered by the Guidelines (see G4 Reporting
Principles and Standard Disclosures Table 5, p. 44).
“Material Aspects” are those that “refect the
organization’s signifcant economic, environmental
and social impacts; or that substantively infuence
the assessments and decisions of stakeholders” (G4
Reporting Principles and Standard Disclosures, p. 92).
“Boundaries” (“Aspect Boundary”) is the description
of where impacts occur for each material Aspect. For
this, your company should consider impacts within
and outside your company. Boundaries can vary for the
diferent Aspects on which your company reports (G4
Reporting Principles and Standard Disclosures, p. 92).
“Materiality” is explained in G4 as follows:
“Organizations are faced with a wide range of topics on
which they could report. Relevant topics are those that
may reasonably be considered important for refecting
the organization’s economic, environmental and social
impacts, or infuencing the decisions of stakeholders,
and, therefore, potentially merit inclusion in the report.
Materiality is the threshold at which Aspects become
sufciently important that they should be reported.
Beyond this threshold, not all material Aspects are of
equal importance and the emphasis within a report
should refect the relative priority of these material
Aspects.” (G4 Implementation Manual, p. 11).
3. Defne: Decide on your report content
7) These are two of the Reporting Principles for Defning Report Content. See the G4 Implementation Manual, pp. 9-11.
8) See the G4 Implementation Manual, pp. 33-35, for an explanation of this step.
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the Disclosures Management Approach (DMA) and
Indicators that your company would be reporting on
for each material Aspect. You can read an explanation
of DMA and Indicators below.
For the Core ‘In Accordance’ option, you are required
to report on a minimum of one Indicator per material
Aspect as well as DMA.
Important to know!
Disclosures on Management Approach (DMA) give your
company an opportunity to explain how you are managing
your material economic, environmental or social impacts
(Aspects). The DMA focus on three things: describing why
an Aspect is material, how its impacts are being managed,
and how the approach to managing this Aspect is being
evaluated. See the G4 Implementation Manual for guidance
on how to report on the DMA (pp. 63-65).
Indicators allow your company to provide comparable
information on your economic, environmental and social
impacts and performance. G4 contains Indicators for a wide
Prioritization step include the following:
❱ ❱ For each Aspect, assess its importance on a.
stakeholder assessments and decisions and b. your
company’s economic, environmental and social
impacts.
10
The Aspect can be deemed ‘Material’ if it is
considered signifcant on both views but it can also
be the case that it is considered “Material” because it
is sufciently important on one of the views.
❱ ❱ Defne the reasons (‘criteria’) why an Aspect is
‘material’.
11
❱ ❱ Decide how much information needs to be disclosed
for each material Aspect (‘coverage’). As a general
rule, those Aspects that have a higher reporting
priority should get a greater level of coverage.
12
❱ ❱ Prepare recommendations for the senior decision-
makers of your company, to include the following:
• List of recommended material Aspects and the
Boundaries for each of these Aspects.
• Criteria used to draw up the above list.
• Proposals for how much information should be
disclosed for each material Aspect. This includes
9) These are two of the Reporting Principles for Defning Report Content. See the G4 Implementation Manual, pp. 9-10 and 11-12.
10) See the G4 Implementation Manual, pp. 36-37.
11) See the G4 Implementation Manual, Figure 6 (p. 37) for an illustration of a matrix of prioritization of Aspects.
12) See an explanation of this in the G4 Implementation Manual, p. 38.
Tips for the
identifcation step
❱ Your company could begin the stakeholder engagement by giving stakeholders a list of
the GRI G4 Aspects for them to consider. Table 1 on p. 9 of the G4 Reporting Principles
and Standard Disclosures provides an overview of these. Additionally, your company
should check whether GRI has developed Sector Guidance for your sector. If so, you will
need to look at the GRI Sector Disclosures for other possible relevant topics. Include any
other topics that are specifc to your company. This is a good moment for your company
to come back to your initial list of potentially relevant sustainability topics (identifed
in the Prepare phase). This way, your company can make sure that it is considering all
possible relevant topics.
❱ Your company should plan its stakeholder engagement to provide a broad range of
possible topics. This means engaging with a broad range of stakeholder groups and
asking for their feedback on a broad range of potential topics. Use methods of dialogue
that allow this (e.g. surveys or questionnaires).
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range of sustainability issues. For example, these could
include water usage, health and safety, human rights
or an organization’s impact on local communities. See
the G4 Implementation Manual for guidance on how to
report on each of the G4 Indicators (pp. 66-235).
Validation:
It is now time for your company’s senior decision-
makers to take a fnal decision, based on the
recommendations by the sustainability reporting
team. The discussions should take into account the
Completeness Principle and apply its related tests.
13
Read the G4 Implementation Manual (pp. 38-39) for an
explanation of this step.
You have now reached the end of the Defne phase
and should at this point be able to address all G4
Standard Disclosures that relate to the material Aspects
and Boundaries identifed, as well as Stakeholder
Engagement.
14
13) This is one of the Reporting Principles for Defning Report Content. See G4 Implementation Manual, pp. 12-13.
14) Standard Disclosures for Identifed material Aspects and Boundaries are G4-17 to G4-23 and for Stakeholder Engagement are G4-24 to G4-27.
“The major beneft for us has been integrating a
process of continuous evaluation that improves our
day to day management.” - Tònia Florit, Managing
Director, Caritas Diocesana de Menorca, Spain (Non-
Proft Sector)
Tips for the
prioritization step
❱ In the Prioritization step, you may need to get clarifcation on some of the feedback
given in the Identifcation step. This could mean the sustainability reporting team
going back to some of your stakeholders to get more in-depth information. That
would involve using dialogue methods that allow a high level of interaction, e.g.
one-to-one or (focus) group meetings.
❱ The tests under the Materiality Principle provide an excellent basis to structure the
discussions and decisions needed in the Prioritization step.
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systems and procedures for your company.
15
There
are many tools and approaches used by companies
to collect data, from simple Word documents and
Excel spreadsheets to sophisticated software tools.
16
You should take into consideration not only the
direct costs of new tools but also the time and money
involved in training staf to use them efectively.
It is quite possible that your company may identify
material Aspects or other topics for which it does
not yet have a monitoring system or even a policy.
If this is the case, you must decide what information
you cannot disclose and explain this in the report. G4
allows for ‘reasons for omission’ in exceptional cases.
These are explained in the G4 Reporting Principles and
Standard Disclosures (p. 13).
Decide if your company will establish and report
on “SMART”
17
targets and if so, what these will be.
Targets can be about your company’s performance
on its material Aspects. They can also be to improve
(or introduce new) procedures and systems. It is
important to establish SMART targets to develop
an idea during the reporting process what the next
steps are.
Establish procedures to make sure that your company
is systematically checking progress on both the
sustainability performance of your material Aspects
and how efective your monitoring systems are.
The main objective during this phase is to collect and
analyze the information your company needs in order to
build the content of the sustainability report, as well as to
manage its sustainability performance. Your sustainability
report is not only a means of communication but also
a tool for change. Remember, once you can measure
an issue, you can manage it; and once you can manage
something, you can change it.
Important to know!
It is important to highlight that a report that identifes risks,
and outlines the challenges that the company faces as well
as the steps it needs to take to address them, is entirely
consistent with the goals of G4. This will promote the change
that is most relevant for your company and its stakeholders.
Checklist
The following is a checklist of the main activities and
decisions for your company at this stage:
Check if you have the internal systems in place to
gather the necessary information or can have them
in place in time to properly monitor and report. If you
have identifed that there are signifcant impacts for
material Aspects in entities outside your company,
you will also need to consider how you will get that
information.
Apply the Principles for Defning Report Quality when
making decisions on the appropriate data-gathering
4. Monitor: Build your report
15) The Reporting Principles of Comparability, Reliability and Accuracy are especially relevant when assessing data-gathering systems and procedures (see G4 Implementation
Manual, pp. 13-16).
16) See the GRI website for a list of the current GRI Certifed Software Tools: www.globalreporting.org/reporting/reporting-support/certifed-software-and-tools/Pages/
default.aspx.
17) SMART is Specifc, Measurable, Achievable, Relevant, Time Bound.
“The basic data of sustainability reporting is valuable. Our
factory is far from reaching the target of true sustainability, but
through systematic data collection and analysis, making data
available to relevant staf, especially middle management, it
gives them a comprehensive understanding of the operational
process of our factory.” - Hugo Liu, Assistant to the Managing
Director, Shunde Hengfa, China (Apparel and Footwear)
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Has your company decided to have the report
externally assured?
18
If so, make sure that it is clearly
indicated which Standard Disclosures have been
externally assured (and which not) in the external
assurance column in the context index.
19
Also, ensure
you have all the necessary information to address the
Standard Disclosure on Assurance (G4-33).
Decide how the report will be presented. This
includes how to present the full report and also
specifc information from the report that is needed
by particular stakeholder groups. This involves having
a clear idea of who your report readers are, what
information each will be most interested in, and
whether the report (or parts of it) will need to be
translated for specifc stakeholder groups.
When you have a fnal version of your report, you can
request GRI to perform a check of the report. Currently,
GRI ofers a check service for G4 reports called
Materiality Matters. The check focuses on the General
The main objective in this phase is to complete the
sustainability report, which is then publicly launched.
Checklist
The following is a checklist of the main activities and
decisions for your company at this stage:
Compile the necessary information for each of the data
points that are needed to address the G4 Standard
Disclosures.
Make sure your report gives a complete picture but also
uses concise text. Make sure that there are clear and
agreed deadline dates for feedback and the fnal sign of.
Complete a Content Index using the GRI Content
Index tool that is provided on the GRI website. Each
‘In Accordance’ option has its own Content Index.
These are explained in the G4 Reporting Principles and
Standard Disclosures (Core − pp. 31-32, Comprehensive
− pp. 33-35).
5. Report: Check and communicate
18) See the G4 Implementation Manual, p. 51, for an explanation of how GRI uses the term ‘external assurance’.
19) Note: If your company has not had the report externally assured, you are still expected to complete the external assurance column. In such a case, you would put “No” for
each Standard Disclosure.
Tips for compiling information
and writing your report:
❱ The Guidance that is provided in the G4
Implementation Manual will help you to check
that you have included the necessary information
to address the requirements of each Standard
Disclosure. These appear for General Standard
Disclosures (pp. 23-61) and for Specifc Standard
Disclosures (pp. 62-231).
❱ Ensure that you are applying the G4 Reporting
Principles for Defning Quality by using the tests
under each of the Principles. The Reporting
Principles of Clarity, Timeliness and Balance are
especially relevant to use when writing your report
(see G4 Implementation Manual, pp. 13-16).
❱ If you would like to see how other organizations
have reported on particular Standard Disclosures
that you need help with, the GRI Sustainability
Disclosure Database ofers a collection of reports
that you can check.
❱ If you have a technical question about reporting
with G4, you may fnd the answer in the G4 FAQs
available on the GRI website. Alternatively, you can
email guidelines@globalreporting.org.
❱ It is very important that the sustainability
reporting team invests time in discussing the
layout and presentation of the report content,
what illustrations it will contain, what are the key
themes and the writing style. It is likely that there
will be diferent ideas on these so it is important
that agreement is reached early in the report
writing process.
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Standard Disclosures G4-17 to G4-27 and checks
whether they are clearly located in the fnal report.
20
Finally, your company is ready to publish the report.
This can be done on your company’s website,
through a printed publication and/or through a
communication to all stakeholders that have been
involved in the process.
GRI encourages your company to register your report
with GRI free of charge so that it will appear in the
GRI Sustainability Disclosure Database. This will help
to map GRI reporting around the world and also give
visibility to your report. This can be done through the
GRI website.
Organize a formal launch and celebration to recognize
the hard work of all those involved in the reporting
process.
Gather external and internal feedback on lessons
learnt during the process. This the frst step in
preparing for the next reporting period. This is the
appropriate moment to come back to Step 4: Review
from the steps for defning material Aspects and
Boundaries.
21
20) You can fnd out more information on this check on the GRI website, www.globalreporting.org/reporting/report-services/Pages/Materiality-Matters.aspx, or write to
reportservices@globalreporting.org.
21) See the G4 Implementation Manual, p. 39.
“The value of the reporting process was not only in the publication of the report itself, but
rather within the many lessons we learned while pulling the information together. Mostly,
we learned that we actually possessed information, statistics and ideas that could support
our assumptions about how good a company we were, as well as how we can potentially
improve in the future. Although time consuming, the process taught us a great deal and
was extremely rewarding.” - William Hughes, Managing Director, Impahla Clothing, South
Africa (Apparel and Footwear)
Tips: A fnal checklist for your G4 report
Check that you have included the following in your G4 report:
Information on the chosen ‘In Accordance’ option that is right for your company, and met
the requirements.
Explanation of how you have defned your company’s material Aspects, based on impacts
and the expectations of stakeholders.
Indication of where impacts occur (Boundaries).
Description of your company’s approach to managing each of its material Aspects (DMA).
Indicators for each material Aspect according to the chosen ‘In Accordance’ option.
GRI Content Index help your stakeholders fnd relevant content.
GLOBAL REPORTING INITIATIVE
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