The GRI calls for sustainability reporting "in context" but doesn't specify how to achieve this, making supplementary guidance essential. Stakeholders are getting savvier in assessing green marketing claims, making it important to have hard facts as back up. Environmental regulations often combine reporting requirements with limits or caps, which, at bare minimum, represent contextual boundaries for ongoing operations.
An additional reason rests in the simple reality that human activity continues to depend on many non-renewable resources and overshoot planetary carrying capacity while poverty and social inequity rise.
We're operating beyond our means in terms of natural and social capital, and already facing the ramifications, including climate change-related weather events and water supply limitations that threaten business and citizens alike. Yet, we have the capacity and the time to turn this situation around successfully, and understanding our situation is an essential first step to orient our efforts.
The method is more resource intensive up front, requiring research to characterize contextual conditions for the issue at hand, such as local water availability or cost of living for employees, establish goals to align performance and improvement accordingly.
However, McElroy notes that as more companies adopt the system, generalized tools to gauge context, allowances and accountabilities can be developed from these diverse examples and start up load will decrease. Deloitte has created one such tool already, the Enterprise Water Method, and continues to build its client services in this area. (See diagram above courtesy of McElroy and Deloitte Consulting.)
McElroy cites a broad business case.
"Context-based sustainability measurement and reporting can improve the quality of information required by managers to understand and control sustainability performance," he says. "It provides a means of conforming to the Global Reporting Initiative's requirement that 'sustainability context' be included in reports. Since the purpose of context-based measurement and reporting is to understand performance relative to the quality or sufficiency of vital resources in the world, stakeholders of all kinds also benefit from an organization's use of the method."