On April 4, 2002, the Global Reporting Initiative (GRI) was launched as a permanent, independent global institution at the United Nations in New York City. Its mandate is to make sustainability reporting as routine as financial reporting while achieving the highest standards of consistency and rigour. The launch was an important event for businesses worldwide because it cements GRI as the leading authority and standard on sustainability reporting.

GRI was established in 1997 as a multi-stakeholder effort to develop globally applicable guidelines for reporting on the economic, environmental, and social performance of companies. It has involved hundreds of people in shaping and publishing two editions of detailed guidelines. A third is currently in draft and open for public comment until May 26, 2002. Here are five reasons to give the guidelines a good look:

1. GRI is set to become the standard for sustainability reporting.

After five years as the midwife and nanny of GRI, the Coalition for Environmentally Responsible Economies (CERES) spun GRI off as a separate institution. It now has an independent board of directors and will locate its headquarters in Amsterdam. While there are dozens of initiatives aimed at developing sustainability indicators, GRI is the only one to provide comprehensive guidance developed with input from all sectors. If it indeed becomes the standard, the GRI Guidelines deserve thoughtful review by any institution that may be held to them.

2. GRI a valuable tool for any company seeking to improve its environmental or sustainability reporting.

With the benefit of input of smart people from businesses, NGOs, accounting firms, and consultancies, GRI has developed detailed standards for reporting and guidance on what to include in a sustainability report, including dozens of specific indicators. The environmental indicators are the most developed. The new draft improves on previous editions by focusing and expanding the economic and social reporting guidance and indicators, in particular, and better linking them to existing standards and codes. The guidance on social and economic reporting can be especially helpful to companies seeking to expand their environmental reporting toward sustainability reporting.

The Guidelines can also be a useful tool for raising awareness within a company of growing stakeholder interest in transparency and accountability -- and what it will take to satisfy that interest. The introductory sections provide a primer on the forces shaping the landscape of disclosure on corporate social responsibility issues, while the indicators help identify which aspects of company performance are of most interest to external audiences.

3. Mandatory reporting is coming.

In some places, it's already here. Mandatory environmental reporting schemes exist in Denmark, The Netherlands, Norway, and Sweden, and are under consideration in Japan. Companies traded on the French stock exchange must report on the sustainability of their social and environmental performance. The European Parliament recently debated but did not adopt (for now) corporate social responsibility reporting requirements.

As legislators and regulators consider mandating some form of reporting, they will inevitably look to the GRI Guidelines for the substance of their requirements. Indeed, acting GRI Executive Director Allen White notes that the officials who developed the French reporting requirements sought and used input from GRI.

4. The era has shifted from let a thousand flowers bloom to let the flowers have something in common.

The first dozen years of environmental reporting and three or so years of GRI reporting have been characterized by a creative profusion of reporting formats, contents, tones and use of indicators and reporting standards. This has had the advantage of providing unique portraits of companiesí personalities, cultures, and approaches to sustainability, but has been less successful at achieving the goal of a standardized format that invites and facilitates comparison of the performance of various companies.

With the recent draft, the guidelines are clearly entering a new era in which GRI will seek to promote consistency and comparability and tighten up the standard that allows a company to state that its report was prepared ìin accordance withî the guidelines. The draft proposes that companies be allowed to make that claim if they meet several conditions, including publishing a cross-reference index to the guidelines and including a statement from the board or CEO that the report ìis a true and fair representation of our organisationís sustainability performance.î Companies interested in using the guidelines should take a look at the draft now so that they are comfortable with the information that will require the CEOís stamp of approval.

5. Sustainability and corporate governance agendas are converging.

One of the major drivers of sustainability reporting has been shareholder activism using tools of corporate governance such as shareholder resolutions.

A theme of the recent CERES conference was the search for common ground between sustainability activists and investors with a more traditional focus on corporate governance issues -- which have become all the more compelling in the wake of the Enron collapse. We can expect increased shareholder activism and scrutiny of every kind of Board action. CERES itself is launching a program on ìSustainable corporate governance focused on the risks posed by climate change.

As GRI matures, socially responsible investors can be expected to push for reporting in accordance with GRI for companies that have not yet taken that step.

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Leah V. Haygood is a Principal of BuzzWord Sustainable Reporting in Silver Spring, MD. She works with companies on sustainability performance assessment and reporting and has authored or co-authored 10 public environmental and sustainability reports for major companies. She can be reached at lvhaygood@earthlink.net.