The Global Reporting Initiative (GRI)
Background
This is one ofthe longest standing reporting frameworks that has undergone several revi- sions. The GRI’s first Sustainability Reporting Guidelines were released in draft form in 1999. They represented the first global framework for comprehensive sustainability reporting, and encompassed the ‘triple bottom line’ of economic, environmental and social issues.
Use of GRI
This well-respected standard provides a tool for external reporting of an organization’s progress towards sustainability. However, a significant drawback for the GRI is the lack of guidelines for businesses in specific sectors. GRI are working towards publication ofsector specific guidelines, but many are yet to be published at the time of writing.
In 2002, the first formal Global Reporting Initiative Sustainability Reporting Guidelines were issued with core content applicable to all businesses. These are gradually being cross- referenced to sector supplements which continue to be issued to address the need for spe- cific guidance. In 2004, over 600 organizations reported using the GRI, with new guide- lines due for release in 2006.
To check ifsupplements have been issued within specific sectors, refer to the GRI website given at the rear of this guide.
The AccountAbility Assurance Standard (AA1 000)
Background
The Institute of Social and Ethical Accountability produces the AA1000 Framework and Assurance Standard for sustainability reporting, which is widely used in all sectors.
The AA1000 series includes guidance notes, specialist modules for specific sectors and practitioners, together with reporting systems and frameworks.
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At its heart, the standard aims to provide credibility and standardization of reporting using three principles.
• Materiality: does the sustainability report cover all the areas that stakeholders need to judge the organization’s sustainability performance?
• Completeness: is the information complete and accurate enough to assess performance in these areas identified as significant?
• Responsiveness: has the organization responded coherently and consistently to stakeholders’ concerns and interests?
The external verification of the AA1000 Assurance Standard provides a key link in the reporting chain. It enables companies to demonstrate that the data they have quoted has credibility.
Use of AA1 000
The framework is based on core principles of stakeholder engagement, organizational responsiveness and the organization’s capacity to learn and innovate on the basis of this engagement.
Since its launch, the AA1000 Assurance Standard has, and continues to be, widely used among a broad range of organizations. It brings together a framework for qualitative as well as quantitative data reporting, with the accompanying systems for data collation.
The standard provides a distinct ‘extra’ to the GRI reporting guidelines: the addition ofan independent verification process through an ‘assurance provider’. The assurance provider has to assess the report to ensure:
• it provides information that is important to stakeholders as well as the reporting organization, and that it has addressed these concerns;
• the reporting organization demonstrates that it has monitored its performance and stakeholders’ views of this performance.
It also allows for the assurance provider to, among other controls, comment on informa- tion which mayhave been omitted and which maybe material to stockholders’ interests.
This standard is likely to remain a popular choice as it provides a complete reporting
‘package’ with a coherent framework.
ENVIRONMENTAL AND CORPORATE RESPONSIBILITY COMMUNICATIONS
9. FORMAL EXTERNAL GUIDELINES AND FRAMEWORKS – TRENDS AND BEST PRACTICE
Department of the Environment Food and Rural Affairs (DEFRA)
Background
DEFRA produced a new range of draft external environmental reporting guidelines in June 2005, setting out key performance indicators (KPIs) for each business sector and how they can be measured and reported, in a sector specific format.
Use of Defra KPIs
The guidelines provide a clear framework to evaluate which KPIs are appropriate to moni- tor and report, and which could be used for the new operating and financial review (OFR) reporting requirements from 2006.
As the DEFRA KPIs were only recently released at the time ofwriting, data on take-up and use was not available. However, the KPIs do provide a framework for use which appears to be readily usable for organizations in any sector and for any size of company.
Overall, the guidelines set out 25 KPIs, which include a range of key environmental impacts including how to handle environmental impacts in the supply chain and products. They are listed in the appendix to this report and include KPIs for emissions to air, water, land and resource use, etc. No one company is expected to report on all of these: DEFRA conclude ‘… for 80% of UK businesses there are 5 or less significant KPIs, against which the Government believes they should report their environmental performance’.
DEFRA list principles and processes that are common requirements when reporting on environmental issues and using key performance indicators, regardless of the reporting framework utilized. These are tabulated in the appendix of this report and include criteria such as transparency and consistency, comparable with standard methods of calculation.
The KPIs could be utilized for small- to medium-sized enterprises to report on environ- mental data without the costs of external verification, but within a nationally recognized framework.
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Environmental management system (EMS) external reporting
Background
There are two major EMS standards in use. BS EN ISO 14001 is recognized on an interna- tional scale, including in the Americas and Far East, and the European standard EMAS is a European wide scheme. Both require organizations to:
• establish and maintain environmental monitoring and measurement processes;
• establish and maintain a register of environmental legislation;
• establish and maintain a register of significant environmental aspects and impacts, including measurable annual objectives and targets to reduce or eliminate the most significant;
• establish environmental training programme.
Use of an EM S in external reporting
Maintaining an EMS will generate valuable environmental information, which could be utilized in formal external reporting, should a company choose to do so. However, the formal requirements for external reporting in EMAS and BS EN ISO 14001 are signifi- cantly different.