Which US brands do not declare GRI Application Levels?

The key sectors among US-based GRI reporters that do not declare their application levels are Energy Sector, Energy Utilities, Health Care Products and Food and Beverage Products. Examples include Abbott, Chevron and PepsiCo.

All organizations which follow GRI’s disciplined sustainability reporting framework deserve a big pat on their back. Having said that, it remains surprising to me that so many US-based GRI reporters are listed as ‘Undeclared’ in GRI’s database (>30% in US vs. 18% Global).

As most of you know, the GRI Application Level signifies to what extent GRI’s G3/G3.1 Guidelines have been used in a report. A declaration of Application Level highlights which set and how many disclosures have been covered in the report. However, contrary to often encountered perceptions, GRI Application Levels are not grades, do not provide an indication of the quality of a report, do not describe the sustainability performance of a reporter, do not signify compliance with GRI/G3 Guidelines and do not relate to an assurance process.

You may be surprised to find how many and which US brands are designated as ‘Undeclared’ in GRI's database. Looking at the 2010 data (2011 data is still very incomplete), the main sectors that did not declare their application levels in 2010 comprised the Energy Sector, Energy Utilities, Health Care Products, and Food and Beverage Products (see listing below). Why have these brands decided not to declare their GRI Application levels? Will this change in 2011? What would it take for these brands to declare their GRI Application Levels in the future?

Energy Sector (9): Chevron, ConEdison, Constellation Energy, Exxon Mobil, Halliburton [should probably not be classified under ‘Energy’], Marathon Oil, Occidental Petroleum (Oxy), and Sempra Energy 

Energy Utility (7): Green Mountain Energy, Green Mountain Power, Nevada Energy, NextEra Energy, NV Energy, PG&E, Progress Energy, TECO Energy

Health Care Provider (6): Abbott, GlaxoSmithKline (GSK), Life Technologies, Millipore Corporation (see also my previous blog entry: Assurance and Stakeholder Panels – All the same to Millipore?), Becton Dickinson and Company, Catholic Healthcare West 

Food and Beverage Products (4): Campbell Soup, Deanfoods, DR Pepper Snapple, PepsiCo

About the author: Mehrdad Nazari (MBA, MSc, LEAD Fellow) is a Corporate Responsibility, Sustainability Reporting & ESIA Advisor, and Director of Prizma. He was previously an environmental consultant with Dames & Moore, Principal Environmental Specialist at the European Bank and CSR Research Director at CoreRatings. Mehrdad has co-delivered a dozen GRI-certified courses on GRI’s sustainability reporting framework and is also a Licensed AA1000 Assurance Provider. Access Prizma’s latest newsletters here.

 

13 Comments to Which US brands do not declare GRI Application Levels?

  1. […] About « What are US brands that do not declare GRI Application Levels? […]

  2. Bob Pojasek left this message on LinkedIn: “Do you think the reason these firms do not use GRI is because GRI G3/3.1 does not have leading indicators? GRI has a terrific listing of lagging indicators, but these will not drive future performance. All the stock markets operate on a looking forward basis. To attract investment firms need to also pay attention to their performance and not just their RESULTS. You may know that the UN Global Compact contracted with EFQM to produce the Framework for CSR. It is a great source of information on leading indicators. The EFQM Performance Framework is used by 30,000 companies in Europe. Companies using the framework outperform financially the companies not using the framework by two-to-one. GRI also has an agreement with the UN Global Compact for incorporating the Lagging Indicators. However, it does not seem interested in the EFQM leading indicators even though they are sponsored by the same agency. Maybe GRI could improve its own performance by incorporating leading indicators in its G4 revision – something they say they will not do! So what do you make of all of this? Would you have GRI and these companies join the ranks of those that use leading indicators to drive their lagging indicators in the future??? We are all wondering why there is resistance to this.”

  3. Minna Mars left this comment on LinkedIn: “I like Bob’s comment about the market’s forward looking need for information; measuring always brings historic data – CSR as well as financial. If you read closely, in fact GRI requires companies using it to disclose a future path for developing those areas which are lagging. Still, agree with your view. Hope that the very recently published new CSR Strategy in EU with action agenda for 2011-2014 puts pressure on GR4 since personally I think what we need globally, is ONE standard – now there’s too much of freedom for companies to choose, and it makes comparing apples with oranges the least to say, challenging. Europe definitely is ahead of the US in this matter, and should show the way how to standardize terminilogy, leading indicators and corporate reporting around CSR/sustainability issues to make judging easier for customers, consumers and ESG investors.”

  4. Bob Pojasek continued conversationon LinkedIn: “Minna – Thank you for the comment and the reference. My point was that the looking forward portion already exists within the UN Global Compact sponsored (EFQM) “Framework for CSR.” All of the practices can be quantitatively represented as leading indicators. These practices are then linked to the RESULTS (lagging indicators) that GRI G3/3.1 publish. You need to have both leading and lagging indicators to effectively operate a CSR program. This is the principle behind the Balanced Scorecard approach. GRI has access to the EFQM Framework for CSR since both GRI and EFQM have MOU’s with the UN Global Compact. I feel that GRI lacks the will to make major changes in G4 because they operate on a conensus mode rather than a majority mode. It makes it difficult to foster change. It is interesting since CSR is all about making changes! If we do have ONE standard, it might have to come from the UN Global Compact staff or elsewhere if GRI does not wish to do so with its G4 revision. There are a lot of great standards available to draw upon. We just need a credible group to put them all together to derive the ONE STANDARD that you advocate. Please remember that GRI is located in Europe. It should reflect this fact in its revision process. We can only hope that they will do so.”

  5. Thanks for your comments, Bob & Minna. Curious to see if GRI G4 will pick up the changes you are advocating. – As you know, the UN GC has also been criticized recently – and is starting to ‘black list’ many who appear to have used that process for ‘blue washing’.

  6. Minna Mars posted this note on LinkedIn: “Thank you Bob for clarifying the concepts of leading and lagging – I’m not so familiar with the TQM but more with GRI, having worked within their frame. I think you got absolutely to the point. I will try to get hold of EFQM Frame for CSR to familiarize myself. Yes, GRI is hq’d in Holland, I think, but they have recently set up of representation in the US – I met their rep here in a networking event early summer. Thank you Mehrdad also for pointing to the blue washing, that was a new term for me; I know that there are even more interest groups following and rating companies’ GC performance than CSR.”

  7. Bob Pojasek contined the conversation on LinkedIn: “The UN Global Compact has MOU’s with GRI and EFQM and does not seem to use any of the excellent work that has been produced. They should take some criticism for this. EFQM is not using the lagging indicator work of GRI as found in G3.1. GRI is not using the leading indicator work of EFQM. The EFQM work is difficult to obtain. It should be published by the GC. It cannot rest on its original work. It must continually improve and inform, just like the rest of us. By “certifying” GRI trainers, one wonders if GRI may also involved in a little “blue washing.” What do you think?”

  8. Thanks for continuing the conversation, Bob.

    It seems that, de facto, many of these frameworks are competing – including for the limited attention of users – despite all the MOUs/assurances on complementary and collaboration.

    With regard to GRI’s ‘blue washing’ and ‘certifying GRI trainers’, I am not sure if this is a little dig that targets me or GRI. If you are referring to me, here the clarification/disclosure: as you may have seen on my LinkedIn profile, I have developed and delivered GRI-certified training programs for the US and Canada. This includes co-delivered a dozen GRI-certified courses (and numerous other courses on topics like Equator Principles, IFC Performance Standards etc). And I have assisted a few organizations with operations in developed and emerging markets with their sustainability reporting using the GRI framework. (More info on my web and/or blog)

    Although I attended a ‘train the trainer’ event offered by GRI in Amsterdam and was “approved” by GRI to deliver GRI-certified training (but GRI has not “certified” me or any other trainer for that matter). GRI has recently clarified its preferences on using the term ‘GRI certified’ about which I have blogged previously (GRI Certified Consultant, Reporter or Trainer?).

    More generally, GRI developed its training program (offered through a franchise of training partners around the world) to provide more standardized/consistent training in the hope that this leads to more and more appropriate use of the GRI framework. My guess is that, over the past few years, some 10,000 people have attended GRI-certified courses around the world.

    Does this strike you as something wrong? Or should EFQM/UNGC and others do the same?

  9. Bob Pojasek continued conversation on LinkedIn with the folloing note: “Mehrdad – I am so sorry… I did not wish to cast any dispersions on your practice. There are still some consultants using the “GRI Certified” term.
    they claim that they have a particular region that has been given to them and that others should not infringe on that region. I thought they were paying GRI for this “certification.” I will check your blog for the clarification that GRI is not generating generating significant revenues from promoting its product through such agents or franchisees. Maybe this kind of activity will subside soon. It makes a lot of sense to have a standardized/consistent approach to using the G3/3.1 guidelines.

    The EFQM claims to have 30,000 organizations using their performance framework with its leading indicators – in Europe. I have yet to see a CSR report from these companies recognizing that they are using these leading indicators. The CSR people seem to not know what their own performance departments are doing. The same is true in the US. I know several companies with award-winning CSR programs that do not recognize that their company is using the Baldrige Performance Framework to operate their business internally (not applying for the award with the same name). This is the important disconnect. Since all stock markets operate on a “looking forward” basis, one would hope that the CSR people would want looking forward data – leading indicators. GRI does not provide leading indicators to use along with the results or lagging indicators. I always wonder why they are so resistant to do so. I have spoken to Mike Wallace about this and he tells me it is because the organization is so consensus driven. there is not enough knowledge of the leading indicators within the consensus group that would enable them to change at this time. What has your training at GRI helped you learn about this? It would be very interesting to have your perspective on this. Thank you.”

  10. Thanks for clarification, Bob.

    You are correct in noting that GRI has carved up the world in different training regions. Typically, each region has multiple (competing) training providers. There is also a fee system in place for each region, not unlike a franchise. For the US, GRI has currently three Training Partners and is actually looking for additional providers (deadline 14 Nov 2011) to access new markets/segments (say academic programs). More info can be found here: http://tinyurl.com/7mw8dzs.

    I don’t speak for the GRI – but here are some of my impressions. Anecdotal criticism not withstanding (including from its own committees that sometimes feel pushed a bit too hard to ‘rubber stamp’ suggestions tabled by GRI), there is a good, cross-sectoral and transparent process in place to develop and fine tune the framework, sector supplement etc which also includes approach to indicators.

    My own take on forward looking aspects is that several of GRI’s reporting requirements, including those dealing with Materiality, Sustainability Context. Disclosure of Management Approach and need for stakeholder engagement require discussion of forward looking dimensions. (Which is perhaps also a reason why many reporters include some sort of ‘safe harbor’ statement relating to future commitments/performance).

    My more general concern with GRI is not related to any of the issues you have been raising, but the ‘organic adoption speed’. GRI/sustainability reporting uptake remains somewhat limited. Also, there are some questions being raised if reporting itself is moving the needle in terms of sustainability outcomes.

    Case in point are award wining reporters in the oil sands sector or continued investment by ‘Equator Banks’ in fossil fuels power plants (including coal), neither deemed appropriate by sustainability/climate change experts which advocate a more aggressive shift to create more positive sustainability outcomes (as opposed to ‘less bad’ outcomes).

  11. […] « While BankTrack criticizes Equator Principles, IFC celebrates Community of Learning Which US brands do not declare GRI Application Levels? […]

  12. […] GRI-type reports make use of the GRI’s Guidelines. They typically refer to this fact in the CEO Letter, About this Report or other section. They also include a GRI Content Index. Preferably, GRI-type reports also include a GRI Application Level Declaration. However, GRI has been less ‘religious’ about this aspect given a rather large segment of reporters which stayed away from it. (See also my blog post: Which US brands do not declare GRI Application Levels?). […]

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