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Dilemma of GRI Reporting Stats in the US – Needs Grain of Salt?

 

Has GRI reporting been stagnant or growing by 60+% in the US? Are reports published by Apple, Cummins and Yum Brands GRI-type reports or not? Does it matter? http://wp.me/p27qSt-jR  

After developing and delivering the first GRI-certified training program in North America, I also served as GRI’s original/first Data Partner for the US and Canada. This means that I had the privilege of collecting, classifying and tabulating GRI-type reports in an effort to improve GRI’s reporting database. I remember coming across a number of reports that felt like they were following GRI’s framework. However, these – let’s call them ‘GRI Light Reporters’ - did not fully meet a few simple criteria to be included in GRI’s database.

How do reports qualify as a GRI report?

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 sections. 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?).

For a while now, the baton of being an US GRI Data Partner has been passed on to the Governance and Accountability Institute. Their voluntary efforts invested in improving GRI’s data base assists report makers and users alike in tracking, searching and benchmarking sustainability reporting efforts and performance. It also enables bloggers like me to occasionally peak at those numbers and muse about GRI-reporting topics.

Today, I like to follow-up on a recent blog post: Has GRI Reporting declined by up to 30%? It did not go overly well with some folks as it was not on-message - and also premature given use of data available by January 2012 (while GRI and Data Partners continue to collect data for 2011 until the end of March 2012).

But here is part of the dilemma: GRI reporting is 'only' growing organically in markets like the US. This is despite pundits and promoters observing that GRI reporting keeps moving from one tipping point to the next. The other problem is that the statistics remain incomplete and – at times – inconsistent, and their use seem sometimes driven by promotional motives.

Recognizing the ‘mainstream GRI reporters’ is not difficult. Simply check for the criteria described further above. It only becomes challenging when you are forced to draw a line and decide cases that appear to be positioned somewhere near the borderline. It seems that these reporters deliberately camouflage their reports...

For the US, GRI’s database identified approximately 129 GRI-type reports in 2010. This included 54 entries which did not declare their GRI Application Levels. The 2011 database (spreadsheet dated March 23, 2012) for the US identifies 131 entries classified - without any qualifications - as GRI reports. This does not suggest a 30% decline I had noted in my January 2012 blog entry.

Looking at the 2011 data, I wondered if the number 131 is perhaps too conservative? Conversely, I was surprised to note that the 2011 database contains a total of 239 reporting entries for the US. Of these, over 100 entries have some sort of qualification which deserve a closer look. 

Report qualifications  include classifying some as ‘Non-GRI Report’. This was applied to some 42 entries for 2011 for the US region. To me, this suggests that such reports should not be included in GRI's database in order to avoid the impression that they may only serve to inflating the numbers. Other qualification used comprise typing some reports as ‘GRI Referenced’ and other as ‘Blank.’ While reports classified as 'Non-GRI report' do not leave much room for negotiation, the other categories may deserve some further re/examination. Are you ready to take a test?

Let’s take a look at reports published by Apple, Cummins and Yum Brand, which are all included in GRI’s reporting database for the US for the 2011 publication period. Consider the ‘evidence’ distilled for you in one paragraph for each report and try to type them in the following categories: (i) ‘(Full) GRI Report’, (ii) ‘GRI Referenced’, (iii) ‘Non-GRI Report’ and (iv) ‘Blank’. The classifications of those reports in GRI’s database [and my suggestions] are noted further below.

A search of Apple Supplier Responsibility: 2011 Progress Report does not find the words GRI or Global Reporting Initiative. However, for GRI geeks willing to search further, Apple posted a GRI Index on its website. It notes that the “Global Reporting Initiative (GRI) Sustainability Reporting Guidelines G3/C were considered.” This is followed by a listing of 24 identified GRI Performance Indicators covering all key categories. How would you classify this report?

Cummins Sustainability Report 2010 – 2011 showcases Cummins mature reporting and membership in FTSE4Good index and Dow Jones Sustainability. A search of the PDF version of Cummins report does not include the words GRI or Global Reporting Initiative. Similarly, I was unable to locate a GRI Index in the PDF or on Cummins website. However, the About this website section notes “Our website and Sustainability Report continues to be done in the spirit of the Global Reporting Initiative (GRI)”. How would you type this report?

Yum Brands’ Corporate Social Responsibility Report (of Kentucky Fried Chicken, Pizza Hut and Taco Bell fame) contains a Methodology section which notes that “We've added our own assessment of this year's report using the Global Reporting Initiative (GRI) G3 guidelines.” It also refers the reader to a GRI Index. A quick look at this table shows a listing of nine GRI Performance Indicators (EN2, EN3, EN26, LA1, LA10, LA13, SO5, PR3 and PR6). GRI's entry level (C-level) report requires disclosure of at least 10 indicators, one each in GRI's categories (Economic, Environment and Social). How would you type this report?

Why does this matter?

Converting some of 'GRI reference' and/or 'Blank' reports to the unqualified GRI report column would show a considerably increase in GRI reporting in the US in 2011. Otherwise, the data suggests stagnation. (And deleting non-GRI reports from the GRI d-base would avoid impression of artificial inflation).

Also, being - and being recognized as - a GRI report contains a promise that boosts its credibility. It implies a more disciplined approach, including in important areas such as stakeholder engagement, consideration of materiality principles and use of performance indicator protocols that improves comparability of performance data. Also, understanding and improving the adoption rates of GRI reporting requires an understanding of the real state of practice. 

I would welcome your comments and observations about the GRI reporting stats in the US, including your typing of reports by Apple, Cummins and Yum.

 The answers - as per entry in the GRI’s Data Base [followed by my comments in square brackets] are provided below:

Apple: G&A classified this as ‘GRI referenced’ [I would call this a GRI report]

Cummins: G&A classified this as ‘Blank’ [I would not call this a GRI report at this time, although underlying data suggests that - with some edits and adjustments - this report could easily reemerge as a strong GRI report]

Yum: G&A classified this as ‘Blank’ [I am hesitant but think this could be called a GRI report, perhaps in need of some edits to make it more so by, for example, ensuring that it covers a minimum of 10 GRI indicators to satisfy at least the entry-level (=C) GRI Application Level]

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13 Responses to “Dilemma of GRI Reporting Stats in the US – Needs Grain of Salt?”

  1. March 29th, 2012 at 1:18 pm

    Maurice says:

    I would say they are all GRI referenced. Perhaps The GRI guidance could be clearer and request users of the GRI categories to annotate/declare if they consider the report to be either ‘GRI Compliant’ or ‘GRI referenced’. Other sustainability reports that haven’t declared using the GRI approach, but meet a number of the GRI reporting criteria, could be classified as ‘GRI compatible’. Other sustainability reports not linked to GRI, but other approaches are better than no sustainability report I suppose – difficult until sustainability reporting in a recognised and approved format becomes mandated as a complimentary report to a company’s annual report, or included in an Integrated Reporting approach.

  2. March 29th, 2012 at 3:14 pm

    Mehrdad Nazari says:

    Many thanks for your comments, Maurice. I think we will still have a little while to get to any mandatory reporting requirements so a clear(er) counting & communication by GRI is perhaps indicated.

  3. April 1st, 2012 at 4:11 pm

    Mehrdad Nazari says:

    Bob Pojasek posted this in LinkedIn

    There are many benefits of using the GRI guidance as a checklist for preparing information on the sustainability/CSR performance of an organization. However, there is no substantial “looking forward” component with quantiative leading indicators even though these indicators are widely used around the world (maybe not by the sustainability/CSR people in the same companies). GRI is also not following the lead of rating groups like the Dow Jones Sustainability Index that are asking more questions on operational, regulatory and reputational risk and the use of management systems to make sustainability/CSR part of how the busines is run every day – part of the work instructions of every worker. As we know, companies are using ISO 31000 (risk management with opportunities being part of the risk program since opportunities are risky if they do not work after money is invested in them) and the COSO framework. GRI’s partner, the UN Global Compact, has MOUs with EFQM (a leading performance framework) to produce two very important sustainability documents – “Framework for CSR” and “Framework for Risk Managment.” Neither of these widely use documents are discussed on the GRI website. The focus on results (lagging indicators) perpetuates short term thinking and the creation of “random acts of sustainability” designed only to make the numbers. This work is not sustainability in and of itself. The occasion of the development of the G4 version should be to continually improve the model and not to focus instead on hyping up the selling of the upgrade. Many companies will be publilshing reports that meet the current GRI criteria but adding the items above to show that they are integrating sustainability/CSR into their business. Most often you will find this information on the sustainability “landing page” on the website and not in the report. With more consensus among the practioners, this bigger picture of looking forward will become much more prevalent. It will be interesting to see who will lead this charge. Does anyone see an organization that will clearly lead us to the next step towards a looking forward (not looking back) transparency and accountability statement?

  4. April 2nd, 2012 at 9:49 am

    Marjella Alma says:

    The DMA’s of the G3/G3.1 Guidelines serve a “leading disclosures”. This is the section in which companies disclose policies/goals/objectives for the future, next to the strategy and analysis pieces under 1.1. and 1.2. Profile Dislosures.

  5. April 5th, 2012 at 8:04 am

    What is a Sustainability Report? What is a GRI Report? What is the Difference? - Commit Forum says:

    […] a recent blog post, Dilemma of GRI Reporting Stats in the US – Needs Grain of Salt?, Prizma does a nice job articulating the uncertainty about what counts as an “official” GRI […]

  6. April 5th, 2012 at 11:34 am

    What is a Sustainability Report? What is a GRI Report? What is the Difference? « says:

    […] a recent blog post, Dilemma of GRI Reporting Stats in the US – Needs Grain of Salt?, Prizma does a nice job articulating the uncertainty about what counts as an “official” GRI […]

  7. April 11th, 2012 at 1:58 am

    Helena Barton says:

    Hi Mehrdad, Interesting questions which I will take forward at the upcoming GRI Stakeholder Council meeting. Can I just add:
    It is true that the Disclosure of Management Approach requirements combined with some of the Profile Disclosure requirements are meant to ensure that reporters chart some path forward (even if many reporters seem to avoid actually presenting goals and KPI targets…) However, in the current Application Level set-up, the DMA requirements do NOT apply for a C-level report. So a bare bones C-level report can ‘get away with’ being quite thin and avoiding any discussion of management approaches – I’ve seen a number of C-level reports that don’t even present a basic materiality assessment. Although Materiality is a fundamental GRI principle (and should surely be the starting point for any reporter), I’ve met C-level reporters who refer to the Application Levels and say, well according to GRI’s Application Level table, it’s only at Level A that we have to show “due regard to the materiality Principle”. With such unfortunate loopholes and other misconceptions, the current Application Level system certainly needs review.
    Sorry, all this deviates from your original blog question. I think we have to go beyond just thinking of the report as a single document but accept that reporting can have many outputs in different media. So while Apple’s report in my view should have helped the reader by including a sentence referring to the online GRI index, it has nonetheless published a GRI index.
    You could also argue that it has taken the materiality principle to a new level by only publishing a Supplier Responsibility report, rather than a comprehensive Sustainability/CR report. (It does report certain environmental data separately, but there are arguably other issues that Apple should also report on of significant interest to its stakeholders).
    Nonetheless, I agree with Mehrdad, I would probably consider Apple’s Supplier Progress as a ‘GRI report’ (with room for improvement, and with the caveat that it is not a full Sustainability Report). However, this does raise another question about whether any report which only covers one indicator area (e.g. an Environmental Report – or supply chain report) should be able to present itself as a ‘GRI report’. Those of us in the report assurance business have long pondered the same question when it comes to Sustainability Reports where only one chapter (e.g. environmental data) has been subject to external verification, yet the report is presented as Application Level X+. Fair enough? Or misleading? Any thoughts?

  8. April 12th, 2012 at 5:27 pm

    Mehrdad Nazari says:

    Hi Helena – Greetings from the Kyrgyz Republic and thanks for taking this forward in your conversations with the GRI Stakeholder Council.

    I noted your comments about ‘bare bones’ C-level reporters. Although I am not a fan of it, it may have a place as it gets the reporting ball rolling. However, I think most organizations can do better than that from the get-go.

    I think C-level reporters under-sell themselves if they don’t include DMA. Some C-level reporters I see actually have detailed DMAs. Perhaps they decide that the “extra mile” needed to collect and “fully report” some more indicators is not warranted at this time or perhaps the different reporting readiness in different business units/sites becomes the week links which holds back high-level reporting.

    GRI’s approach to using an ‘assurance +’ regardless of what is being assured makes me smile. I tell some of my enthusiastic GRI course participants that they should count and state the number of pages of their report, and have that assured to claim an easy “+”. In reality, that is – perhaps in less extreme forms – what is happening. Not enough space to share some examples which immediately jump to mind here.

    Being based in the US, I feel the discussion of assurance of CR/sustainability reporting is still not really on our radar screen in any big way. As you know, US businesses are generally still lagging behind Europe in terms of GRI reporting, let alone assuring its content. I think the “very limited assurance +” (and also the GRI Check) provide for low hanging PR benefits. Not sure if it is much more than that.

    Curious to hear what others think – and please keep us posted about your discussions at the GRI Stakeholder Council on what is or is not a “real” GRI report.

  9. May 16th, 2012 at 12:22 pm

    It’s Official: GRI reporting grew only by 1% in North America | PRIZMA says:

    […] March 2012, I published a blog entry entitled Dilemma of GRI Reporting Stats in the US – Needs Grain of Salt? It contained a critical analysis of the way GRI reporting data was being classified. To prove the […]

  10. May 18th, 2012 at 12:49 pm

    Sustainability Reporting in Mining Continuous to Grow | PRIZMA says:

    […] GRI’s database for 2011 includes nine additional reporting entries. Four of these were categorized as “GRI Referenced”. This indicates the use of the GRI framework but a lack of a GRI Content Index. The remaining five were classified as “Non GRI” (see also Dilemma of GRI Reporting Stats in the US – Needs Grain of Salt?). […]

  11. May 29th, 2012 at 1:29 pm

    GRI Reporting in US jumped by 100 to 350 for 2011 | PRIZMA says:

    […] GRI Focal Point US celebrated its first birthday at its inaugural conference hosted at Saint Louis University’s John Cook School of Business. Uncovering 100 additional reporters in the US during the week leading up the conference seems like the perfect birthday present.In a recent blog (It’s Official: North American Relative GRI Reporting Grew by 1% in 2011), I criticized the relative slow growth of GRI reporting in the US. I also wondered about the approach taken to categorizing GRI reports. Some of it appeared to be bloating the list by adding reports classified as ‘Non GRI Reports’ to the GRI database (Dilemma of GRI Reporting Stats in the US – Needs Grain of Salt?). […]

  12. August 10th, 2012 at 7:47 am

    Lin Jiang says:

    Hi I have two questions about the graph,

    For the data of year 2011, when I add number of all levels and the undeclared, the total is not 131,is there any other data that was not reflected in the graph?

    For the red bar, it is for year 2011? And what does “blank” mean? Thanks.

  13. January 1st, 2013 at 4:19 pm

    Prizma’s Top 10 Blogs in 2012 | PRIZMA says:

    […] Dilemma of GRI Reporting Stats in the US – Needs Grain of Salt? […]

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