Last week it was announced: the 4th generation of the Global Reporting Initiative Guidelines (G4) are a fact. During the GRI Conference in 2013, the G4 Guidelines were presented to a large international audience from more than 80 countries. A great moment, but where are we really?
During the opening, the current state of affairs was summarized: ‘In 20 years, we have come far. Sustainability reporting has become a global movement and that was unthinkable five years ago. But: our current economic system is unsuitable for valuing non-financial elements. So we need other measuring instruments. Changing measurement methods will change behaviour. The G4 Guidelines are very necessary, because otherwise we miss the momentum.’
The G4 Guidelines have increased user-friendliness and accessibility. They are presented in two interconnected parts: Part 1 the reporting requirements and Part 2 the implementation manual. Part 2 is more detailed and provides more guidance. The emphasis on what is material encourages organizations to provide only information that is critical to their business and stakeholders. This means organizations and report users can concentrate on the sustainability impacts that matter, resulting in reports that are more strategic, more focused, more credible, and easier for stakeholders to navigate. The other good news is, that with more focus on materiality, it is much simpler for first time sustainability reporters and SMEs to start reporting! It is very doable now, so to non-reporters: please get cracking!
A pioneering role does not seems to be the case for Asia. Thus Adam Brennan (PUMA): "We asked suppliers to prepare a sustainability report. The results were mixed: In Asia there was not a mindset for sustainability '. In Europe, however there is more support for sustainability reporting. European Commissioner Michel Barnier spoke clearly: ‘Banks and other financial institutions should return to their original task of financing the real economy. But restoring the banking sector will not be enough to solve the crises. We need more responsible companies. Boards should reflect diversity in gender, age et cetera. But more importantly, the way needs are met should be public information. Transparent companies are not yet the norm.’
The European Commission does more than just talk about where the problems lie. Recently, a bold regulative proposal was presented in which large companies (> 500 employees) are required to report on how they perform on specific sustainability themes. This means to be transparent, because that is part of the solution, not part of the problem.
A nice goal, but is it sufficient? Firstly, this is only for the big companies, companies with fewer than 500 employees are (still) out of the picture. More important is the criticism that this only concerns sustainability reporting and not being transparent about the process of value creation (integrated reporting). Nevertheless, the initiative of the European Commission is to be welcomed: it is the next step on our long journey towards a sustainable society. Above all it is a sign of political leadership, and that is exactly what we needed.
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