Should GRI be Added to IFC Performance Standards and Equator Principles?

Those looking for encouragement for sustainability reporting and/or GRI in the draft revision of the IFC Performance Standards will be disappointed. But the revision process is not over yet. Despite a recent joint publication (Getting More Value Out of Sustainability Reporting  about which I blogged here: IFC gets out vuvuzella for sustainability reporting), sustainability reporting and the GRI framework have yet to be taken seriously by IFC.

At this time, there are only a few - and largely hidden – references to GRI in the Guidance Notes to the IFC Performance Standards. Three examples I found are on page 60 in Guidance Note 1 (on Assessment and Management of Social and Environmental Risks and Impacts), page 17 in Guidance Note 4 (on Community Health, Safety and Security) and page 31 in Guidance Note 5 (on Land Acquisition and Involuntary Resettlement).

As the revision of IFC Performance Standards enter their final consultation phase, it seems that IFC would do well to adopt the GRI reporting framework and formally encourage private sector clients to use it. This would also help IFC’s clients leverage their significant investments in the development and implementation of bankable Social and Environmental Assessments (SEA, ESIA) and Social and Environmental Action Plans (ESAP, EMAP). A GRI type report could serve the needs of many more stakeholders which, in turn, would give shareholders a bigger bang for the buck invested in expensive systems, monitoring and reporting processes.

Examples of how such GRI reports have added value to IFC investees like Dialogue, mobile telephony sector in Sri Lanka, Manila Water, a public private partnership in the Philippines, and Gold Reserve Inc, which became the first pre-production mining company to produce a GRI report (with Prizma’s assistance), are detailed in an earlier blog.

IFC’s adoption of GRI would also create another upward spiral. The Equator Principles, which are the de facto environmental and social benchmark used in project finance and a derivative of the IFC Performance Standards, are also undergoing a revision process I blogged about earlier. This is designed to facilitate harmonization of the Equator Principles with the updated IFC Performance Standards. So, the adoption of GRI reporting requirements in the IFC Performance Standards would transfer these requirements through the Equator Principles to most major projects seeking project finance and political risk insurane. Welcome to mainstreaming!

Do you expect that IFC will include GRI in the updated version of the IFC Performance Standards? What benefits would IFC and its clients gain from this? Or will concerns about burden on project developers maintain the status quo?

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 EBRD and CSR Research Director at CoreRatings. Mehrdad is a GRI-approved trainer on GRI's sustainability reporting framework and a licensed AA1000 Assurance Provider.