G4 Guidelines Announced at GRI Conference

Now trending: board reporting best practices
May 24, 2013

The long-awaited Global Reporting Initiative (GRI) G4 Guidelines for Corporate Social Responsibility (CSR) reporting were released May 22 at the Global Conference on Sustainability and Reporting in Amsterdam.

The new guidelines mark an important change from the previous approach to CSR reporting, focusing now on materiality and not on the number of indicators addressed. Under the new G4 Guidelines, companies should only describe activities that have significant economic, environmental, or societal impact.

There is also a new generic format for Disclosures on Management Approach (DMA). For each issue, a DMA needs to be completed in which the company provides an explanation about why it is material, including an assessment of its overall impact and how the issue is being managed. Another important, new feature reflects the GRI application level. Under G3.1, companies were given a grade of A, B, or C based upon how much information they disclosed about their CSR performance, not by how sustainable they actually were.

This method has been replaced with the “In Accordance Scheme” that consists of Core and Comprehensive options—both of which focus on materiality. The Core option is simpler: companies need to report on one or more of the GRI performance indicators for a given issue. For the Comprehensive option, companies must report on all of the relevant indicators. The transition period from G3.1 to G4 will last two reporting cycles. After December 31, 2015, GRI will only accept reports that follow G4 Guidelines.

By placing the emphasis on materiality described by individual reporters, G4 Guidelines will have to address the issue of comparability. The risk is that the difference in perception and management of materiality between companies is significant enough that it may not be easy to compare G4 CSR reports directly, even for companies in the same sector. Under the new G4 Guidelines, two important incentives for companies to write CSR reports have been altered in favor of increased disclosure on material issues. It remains to be seen how this new dynamic will influence the content and format of CSR reporting in the future.

Wdesk enables teams to collaborate and manage data within the G3.1 framework and will continue to adapt as G4 evolves. To learn more about how Wdesk can help you with your CSR report, visit the CSR Reporting Solution page, or schedule a demo to see it in action.

Francis Quinn

About the author

Francis Quinn is the Director of Corporate Sustainability Technologies for Workiva. Before joining Workiva, he directed sustainable development for L’Oréal in Paris.