Is SIF’s GRI study more searching for keys under the lantern?

In a recent press release, the Social Investment Forum (SIF)  laments that while most S&P 100 companies release some sustainability data, only six firms publish complete sustainability reports that meet GRI’s highest, “A” level reporting standard.  What is wrong with this picture?

Having delivered 10 GRI-certified courses across Canada and the US in 2009, I remain intrigued about the focus on and common misperceptions about the so called Application Levels used by those pursuing reporting which utilize the sustainability reporting framework developed by the Global Reporting Initiative (GRI).  The publication of SIRAN/SIF study provides another opportunity to ponder about our desire and mistake of using GRI application levels as ‘short cut’ to help us separate between ‘good’ and ‘bad’ sustainability reporters (or worse, more or less sustainable companies).  It seems that the GRI’s application level designation used in sustainability reporting is being confused with credit rating scales ranging from 'Investment Grande' (such as AAA to BBB) to 'Non-Investment Grade' (such as BB-D). 

The SIF press release notes – not entirely correctly - that “[a]n “A” level report provides data for all of the core GRI performance indicators; addresses the management approach for each indicator; and includes organizational information such as identification of key risks and a statement from the CEO addressing the relevance of sustainability at the organization.”

According to GRI, reporters targeting an “A” Application Level should report, amongst other things, on all core Performance Indicators. However, the GRI guidelines and GRI's FAQ on Application Levels provide important qualifications to the notion of 'ALL core Performance Indicators.' These relate to materiality, boundary setting, data gaps, and proprietary nature of some information.(and let’s park complications of Sector Supplements and National Annexes for now).

GRI notes that Performance Indicator should be selected – and this also means that some may be omitted - based on GRI’s Materiality Principle. A careful review of reports designated as “A” level reveals that some Performance Indicators have been typically left out. Or that the determination of the reporting boundary and associated scope limitations eliminates the depth and usefulness of data presented. Or that data gaps or proprietary nature of information provides grounds for data exclusion without eliminating ones ability to designate a report as having reached an “A” level application.  And I am ignoring the wonderful topic of lack of the 'GRI police' and the broader assurance and credibility of reports – regardless of Application Levels  (see also my previous blog posting: Sustainability Reporting – Misperceptions & Barriers)

Do you feel that GRI’s Application Levels are being understood and used by both reporter makers and users? Do you think groups like SIF/SIRAN should perhaps focus more on non-reporters and need for mainstreaming instead of pushing the ‘early adopters’ to further improve their sustainability reporting practices?

Mehrdad Nazari (webblog)