In a stunning display of willful negligence, the Global Reporting Initiative (GRI) today released the long-awaited update to its Sustainability Reporting Guidelines, G4, in which known defects are left firmly in place. Of particular concern is GRI’s handling of the reporting principle known as sustainability context, without which there can be no bona fide sustainability reporting at all. By choosing to leave that principle in its prior state of disrepair, GRI has effectively consigned organizations to another five or six years of feckless reporting, and itself to irrelevance.
As GRI has been pointing out for over a decade now, corporate sustainability reports must be inclusive of sustainability context to be meaningful. Environmental impacts should be reported relative to ecological thresholds, and social impacts relative to human needs. There simply cannot be any true, authentic, or empirical disclosure of sustainability performance unless such context is included; any more than there can be financial reporting without expenses being included.
Almost as bad as GRI’s intellectual (if not ethical) transgression, has been the manner in which it treated its own stakeholders in the run-up to G4. In both of the public comment periods preceding this week’s release, leading sustainability professionals from around the world urged GRI in the strongest possible terms to improve its treatment of the sustainability context principle in G4. Proposed language for how to do so was even provided, all to no avail.
At this juncture, one has to wonder whether or not GRI truly comprehends the magnitude of the mistake it has made here. On the one hand, it properly advocates for the inclusion of sustainability context in corporate reports, while on the other it completely fails to provide guidance for how to do so, as if the inclusion of context in reporting is discretionary. As a consequence, most GRI-compliant reports are entirely context-free, and therefore do not disclose sustainability performance at all, including the ones to which GRI has historically bestowed A+ ratings.
The famed systems thinker and sustainability guru, Donella Meadows, once wrote: “When indicators are poorly chosen, they can cause serious malfunctions.” Well thanks to GRI, we now live in a world where every company on Earth is compelled to use poorly chosen (context-free) indicators in their sustainability reports, the content of which tell us nothing about their true sustainability performance. What’s more, such indicators can even hide or misrepresent such performance, precisely because they leave context out of the picture.
But that’s only the half of it. Worse yet is that organizations themselves also rely on sustainability reporting to guide and inform their own management efforts. But how can they be expected to do so – effectively, that is – if the information they’re relying on is defective? “People can’t respond to information they don't have,” Meadows explained. And thanks to GRI’s actions this week, they won't be getting any anytime soon – at least for another five or six years, that is (till G5?).
As the dominant international framework for corporate sustainability reporting, then, GRI has been an abject failure, and it’s time we admitted it. It neither responds to the needs of its constituents, nor to the science, reason, and best practices of its own peers. By behaving in such ways, GRI does a grave disservice to the rest of us, who for so many years have been taking the subject seriously, and working hard to make genuine progress in corporate sustainability possible.
GRI’s actions, by contrast, make a mockery of sustainability management, and of CSR measurement and reporting, in particular. This will do nothing but help fill the world with yet another generation of so-called sustainability reports, which although compliant with GRI, amount to nothing of the kind. And while all of this has been explained to GRI, it has steadfastly refused to act, despite worsening conditions in the world. The hypocrisy here is appalling.
Indeed, GRI’s willful negligence on this matter is inexcusable, if not deeply unethical.
If ever there was a time when a procedure for authentically measuring and reporting the true sustainability performance of organizations was needed, this is it. By choosing to ignore it, GRI is now knowingly complicit in perpetuating the use of a non-financial reporting system that actually obfuscates, much less exposes to management, the true sustainability performance of organizations.
Looking ahead, then, it is clearly time to end the charade and usher in a new era of authentic, context-based sustainability measurement, management, and reporting. In fact, the context-based train has already left the station. And while GRI has clearly chosen to remain behind, the rest of us are free to move on, and indeed we must. Why? Because if there are twenty-five things that have to happen in order to make the transition to the new economy possible, this is one of them. So sayonara, GRI!
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