The countdown to the launch of G4

by Robyn Leeson

The Global Reporting Initiative will launch the 4th iteration of The Guidelines - G4 – at the forthcoming conference May 22-24.

The design features proposed during the 2nd public comment period on the G4 Exposure Draft received some heated reviews. Ben Tuxworth from Salterbaxter and Ralph Thurm from A|HEAD|ahead, traded views on The Guardian Sustainable Business blog in February and March this year. Elaine Cohen rounded this off last month with her blog post Is G4 reporting suicide? It was all very strong stuff indeed.

However, since the comment period for final thematic changes closed in November, GRI has been working through the thousands of pages of feedback. Much has shifted in the design of G4 during the past several months. While there will be a launch next week, it remains to be seen if these changes will be enough.

The General and Specific Disclosure Items have been both reduced and simplified. The sector supplement content is also simplified and is to be used to inform considerations around material Aspects. Materiality is still a major focus but it is an open question as to whether the reduction in Disclosure Items from the G4 Exposure Draft, which is still an increase on G3/3.1, results in any elegance.

While there is no longer a formal requirement to map the value chain, there is an expectation of reporters to consider Aspects in the areas of the value chain where they are deemed to be material. The G4 will appear as two documents which will separate the “what to report” from the “how to report” as part of the stated G4 objective of becoming “standard ready”. The Disclosures on Management Approach can be reported at a more generic level to reduce duplication. All of these changes reduce some of the excesses presented in the G4 Exposure Draft. However, it doesn’t truly represent the “back to the drawing board approach” that some commentators have called for.

A number of issues remain. First, the application level system is still one of the most contentious features. A move from A,B and C to a simple in accordance model in the G4 Exposure Draft and now back to a two tiered ‘in accordance’ system reflects a somewhat circular discussion. Re-thinking minimum requirements demands a consideration of the whole of G4. This is problematic to do while changing the various, detailed and new parts. Certainly the application level system was being used for too many things by too many interests. The use of the application level system as a proxy for quality, for example, has been given a thorough work out recently alongside evidence of false claims and concerns about who, if anyone, should police the quality of reports. If it is not the role of the Guidelines or GRI itself, then we need to explore other mechanisms and institutional relationships. This is a bigger issue than the design of G4.

Second, one of the original objectives of G4 was to offer a path toward Integrated Reporting. Although GRI and the IIRC signed an agreement in March 2013, the extent to which G4 is able to reflect on Integrated Reporting was constrained by the differing development timelines. The launch of the Consultation Draft of the International Integrated Reporting Framework last month means that the GRI Conference will be held in the middle of the public comment period of the IR Framework. Maybe this is where we might see some fireworks? While we should be aiming for clear pathways between sustainability reporting and Integrated Reporting, there is still much to be done to paint those pictures. In the meantime, there is a natural, but unhelpful attraction to map the respective territories. If an integrated report is prepared for the providers of financial capital, then should a sustainability report perhaps speak to other stakeholders? The IR Framework lists other stakeholders including employees, suppliers and local communities as audiences for integrated reports as well. I expect that the session on integrated reporting at the Conference next week will be well attended.

One additional source of ignition at the Conference may be the growing interest in re-visiting the principle of sustainability context. This involves reporting sustainability performance but as a function of geographic thresholds or limits to resources. A company’s annual water consumption, for example, gains greater meaning when expressed as a function of overall water availability. Australia’s National Sustainability Council released Sustainable Australia Report 2013 last week. It presents national data on Australia’s environment, society, economy and collective wellbeing and is the first report of its kind in Australia. Although it is not a limits-based framework, the range of data could be used by many Australian reporters as a first step toward reflecting on their context.

Reporters however rarely experiment with this principle for a number of reasons. Ralph Thurm provides a good summary in his recent blog posting.

GRI has work to do in the area of context and it is still a founding principle of the GRI Guidelines. The IR Framework also uses the term context, but does it mean the same thing? An Integrated Report is defined as a concise communication about how an organisation’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value over the short, medium and long term. Integrated reporting that embraces a consideration of geographical thresholds or limits when considering the proposed six capitals? This might provide some of the rocket fuel we need.

Dr Robyn Leeson is a Director of Net Balance (, 
one of the world’s leading sustainability advisory firms.
Robyn is based in Melbourne.

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