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]