As dominant and valuable a framework as the GRI provides, times have changed substantially since the millennial years when it came to prominence. In a world in which the bottom line faces constant pressures and disclosure requests come fast and furious, companies must now choose to whom and how deeply to respond—while allocating resources accordingly. Although we believe a majority of companies would continue to rely on a GRI-based approach regardless of the final shape of the G4, many might simply not be able to justify to senior management the increased costs (and, potentially, added liability) of strict adherence to this voluntary standard.
There are four areas of the current draft in particular that we strongly recommend be reconsidered or refined:
- Value chain assessment: while helpful as a preparatory exercise in advance of the reporting process, its practical application is unclear when responding to specific indicators
- Greater emphasis on materiality: a laudable strategy that needs to be carried through the instructions so that it allows reporters to narrow their focus to a manageable set of issues and frees them from the compulsion to stick with a “checkbox” approach
- The replacement of application levels with a binary “in accordance” or “not in accordance” standard: the right idea, but a more graduated scale of adherence would be less discouraging to both smaller companies and those companies that do not aspire to the highest levels of reporting—yet still want to publicly declare their adherence to GRI principles and protocols
- Additional supply chain indicators: A step in the right direction, but excessively detailed and burdensome—especially for companies that would find themselves needing to both collect this data from suppliers as well as provide it to their own customers
- Increased governance disclosure requirements: more onerous than necessary in being split out into dozens of indicators; also politically unfeasible for some organizations
Our impression from the conversations we’ve had to date with clients, peers, and other corporate reporters is that we are far from alone in the above concerns. Fortunately, in the coming months, the GRI still has time in which to refine its course as it sifts through the commentary provided by its stakeholders. We sincerely hope that, should the response from stakeholders warrant it, the GRI will delay the final release of the Guidelines until the standard has been sufficiently reworked to ensure its continued practicable applicability and global adoption.