THE SIGMA GUIDELINES- TOOLKIT

SIGMA GUIDE TO THE GLOBAL REPORTING INITIATIVE

SUSTAINABILITY REPORTING TOOL

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 Sustainability reporting
and the Global Reporting Initiative ™

Contents

1 An Introduction to Sustainability Reporting and the Global Reporting

Initiative (GRI) ..............................................................................................3
1.1 Sustainability reporting .......................................................................3
1.2 The Global Reporting Initiative – An Introduction................................3
2. Using the GRI Sustainability Reporting Guidelines .................................4
2.1 Reporting Approach............................................................................4
2.2 Report Content ...................................................................................5
2.3 Performance measurement ................................................................5
3 The GRI Approach: Links to the SIGMA Guidelines..................................6
3.1 Introduction .........................................................................................6
3.2 Linking GRI to the SIGMA Management Framework..........................6
4. Further information ..................................................................................8

Published by the SIGMA Project, September 2003

SIGMA Project, 389 Chiswick High Road, London, W4 4A

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1 An Introduction to Sustainability Reporting and the Global
Reporting Initiative (GRI)
1.1 Sustainability reporting

Timely, credible and consistent information on an organisation’s social,

environmental and economic performance is a key element in moving towards
sustainability. Communities, investors, governments and businesses need
reliable information to effectively address the development challenges of the
21st century.

These groups are all asking variations of the same fundamental question: how
do we obtain a clear picture of the human and ecological impact of business,
so that we can make informed decisions about our investments, purchases
and partnerships? Achieving such clarity in reporting holds the promise of
delivering value both to business – by providing a critical management tool –
and to external stakeholders – by providing timely, relevant and reliable
information on the reporting organisation.

External non-financial reporting has not been guided by a widely accepted

common framework of regulation, principles and practices as to what should
be reported or how and when and where. Moreover, national and sectoral
initiatives have produced a diverse range of reporting practices, making
comparability, and consistency difficult to achieve.

A number of initiatives from business, government and civil society have been
developed to improve the quality and consistency of reporting. Examples
include the Public Environmental Reporting Initiative (PERI) reporting
guidelines, the World Business Council for Sustainable Development eco-
efficiency indicators and the UK Government’s Quality of Life (QoL)
indicators. More recently, the Global Reporting Initiative (GRI) has developed
reporting guidelines for the social, environmental and economic aspects of
organisational performance.

This section of the SIGMA Guidelines provides an introduction to the GRI.

Full information can be obtained from the GRI, see end of this paper for
contact details for GRI. The GRI is a purely voluntary approach –
organisations may wish to adopt some or all of the recommendations as
appropriate and may wish to use them in combination with other guidelines.

1.2 The Global Reporting Initiative – An Introduction

The GRI was established in late 1997 with the mission of developing globally
applicable guidelines for reporting on economic, environmental, and social
performance, initially for corporations and eventually for any business,
governmental, or non-governmental organisation (NGO). Convened by the
Coalition for Environmentally Responsible Economies (CERES) in partnership
with the United Nations Environment Programme (UNEP), the GRI
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incorporates the active participation of corporations, NGOs, accountancy
organisations, governmental representatives, business associations, labour,
universities, and other stakeholders from around the world.

The Sustainability Reporting Guidelines were initially released in exposure

draft form in March 1999. Revised Guidelines were released in June 2000
with a third version released in September 2002 by which point more than 140
companies had prepared reports based on the GRI Guidelines.

In 2002, the GRI was established as a permanent, independent, international

body with a multi-stakeholder governance structure. Its core mission will be
maintenance, enhancement, and dissemination of the Guidelines through a
process of ongoing consultation and stakeholder engagement.

The GRI Guidelines provide a framework for reporting that promotes

comparability between reporting organisations while recognising the practical
considerations of collecting and presenting information across diverse
reporting organisations.

In recognising the particular challenges of sustainability reporting for smaller

organisations, GRI suggests these organisations may wish to adopt an
incremental approach to guideline implementation.

In recognition of the varying level of organisational experience in sustainability

reporting, the guidelines offer a range of options from informal use to a more
structured use, where a report is prepared ‘in accordance’. Organisations
wishing to identify their report as prepared ‘in accordance’ must meet
particular requirements1. This option is particularly aimed at those
organisations with strong reporting practices.

2. Using the GRI Sustainability Reporting Guidelines

2.1 Reporting Approach

GRI’s reporting approach consists of a series of principles and practices that

guide the preparation of organisational level sustainability reports. The GRI’s
reporting principles are grouped under four clusters: Those that:

• Form the framework for the report (transparency, inclusiveness,

auditability);

• Inform decisions about what to report (completeness, relevance,

sustainability context);

• Relate to ensuring quality and reliability (accuracy, neutrality,

comparability) and

• Inform decisions about access to the report (clarity, timeliness)

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2.2 Report Content

The following information is considered integral to GRI-based reports:

1. Vision and Strategy

Statements from the CEO or equivalent describing key elements of the report
and establishing the organisation’s vision and strategy towards sustainability.

2. Profile of Reporting Organisation

An overview of the reporting organisation and scope of the report.

3. Governance Structure and Management System

An overview of the organisation’s governance structure and the management
systems in place to implement its vision. A discussion of stakeholder
engagement is central to this section.

4. GRI Contents Index

The location of the of the main elements of the GRI report are presented in a
table.

5. Performance Indicators
Covers the organisation’s economic, environmental and social performance
through the use of qualitative and quantitative indicators as well as
supplementary information. The indicators should include the current reporting
period, at least two previous periods and a target period.

2.3 Performance measurement

The GRI’s Sustainability Reporting Guidelines encompass three linked

elements of sustainability relevant to organisations:

Economic: including, for example, wages and benefits, labour productivity, job
creation, expenditures on research and development and investments in
training and other forms of human capital. The economic element includes,
but is not limited to, financial information.

Environmental: including, for example, impacts of processes, products and

services on air, water, land, biodiversity and human health.

Social: including, for example, workplace health and safety, employee

retention, labour rights, human rights, wages and working conditions at
outsourced operations.

In considering the reporting organisation’s economic, social and

environmental performance (section 5 of the GRI Guidelines), the GRI asks
reporters to use both quantitative and qualitative indicators, as well as
providing supplementary information. To aid interpretation, reporters are
asked to report relevant objectives and programme information alongside raw
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data. They are also asked to provide context, management explanations and
commentary on trends and unusual events.

Organisations are asked to report information for the current reporting period,
at least two previous periods and a target period. Information should be
provided in absolute terms, as well as in ratio form whenever this assists
communication.

The performance indicators section of GRI has four subsections:

environmental, economic, social and integrated.

All indicators are classified as either ‘core’ or ‘ additional’. Core indicators are
those relevant to most reporting organisations and of interest to most
stakeholders. Additional indicators are those with important but less general
interest or those for possible inclusion as future core indicators.

GRI has not identified a standardised set of integrated performance indicators

and encourages reporters to consult with stakeholders in developing an
appropriate set of these indicators to include in their reports. GRI divides
integrated performance indicators in two:

• Systemic indicators that link performance at the micro (e.g. organisational)

level with economic, social or environmental conditions at the macro (e.g.
regional/national/global) level;

• Cross-cutting indicators that bridge information across two or more of the

three components of sustainability of an organisation’s performance.

3 The GRI Approach: Links to the SIGMA Guidelines

3.1 Introduction

Reporting is a key component of the SIGMA Management Framework and the

GRI offers an approach to reporting that is consistent and complementary with
SIGMA’s approach to sustainability management. Organisations using the
SIGMA Guidelines may, however, adopt alternative reporting approaches.
The GRI Guidelines also offer a set of indicators that can inform the
development of continual improvement metrics within the SIGMA
Management Framework.

SIGMA complements the GRI Guidelines. It provides the management

systems and processes to evaluate and improve on the results presented in
GRI reports.

3.2 Linking GRI to the SIGMA Management Framework

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SIGMA Phase and sub-phase Linkage

Leadership and Vision Phase

LV.3 Communication The GRI emphasis on the importance of stakeholder

and training dialogue, complements this sub-phase which includes
identifying and communicating with stakeholders

Planning Phase
GRI provides a framework for reporting on performance
P.1 Performance
which is a useful input into the SIGMA Performance
review
review. For example, SIGMA Project organisational
partner, Vauxhall Motors, has used the GRI Guidelines
in this regard.
GRI provides a set of commonly agreed core indicators
of organisational sustainability, along with potentially
important additional indicators. GRI is also developing
specific supplements for different industry sectors, and
resource documents on specific topics of interest to GRI
users e.g. HIV/AIDS

P.4 Strategic By providing a set of performance indicators, the GRI

planning Guidelines help organisations to identify the parameters
of capital enhancement.

P.5 Tactical GRI can help organisations to develop a series of

planning performance indicators and measures.

Delivery Phase

D.1 Change GRI highlights emerging consensus around key

management sustainability issues, across different cultures, regions
and types of organisation

D.2 Management GRI reporting provides an integrated perspective that

programmes helps both individuals and the organisation as a whole to
identify the key priorities (and gaps) and develop KPI’s
for these.

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Monitor, review and report phase

MRR.1 Monitoring, GRI provides a set of metrics and a format for

measurement, organisations to feedback on their performance
auditing and
feedback
MRR.2 Tactical and A GRI report is a useful input into tactical and strategic
strategic review review.

MRR.3 Reporting Through a unique multi-stakeholder process, the GRI is

progress developing a globally applicable framework for reporting
an organisation’s sustainability performance. The
framework presents reporting principles and specific
content indicators to guide the preparation of
organisation-level sustainability reports.

MRR.4 Assurance of Annex 4 of the GRI Guidelines includes useful guidance

reporting on credibility and assurance.

4. Further information
The GRI can be contacted at:
Keizersgracht 209
1016 DT Amsterdam
The Netherlands

Tel: +31 (0) 20 531 00 00 Fax: +31 (0) 20 531 00 31

mailto:[email protected]
www.globalreporting.org
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See GRI, 2002 Guidelines pp 13

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About the SIGMA Project

The SIGMA Project - Sustainability Integrated Guidelines for Management

was launched in 1999 with the support of the UK Department of Trade and
Industry (DTI) and is led by:

• British Standards Institution - the leading standards organisation

• Forum for the Future - a leading sustainability charity and think-tank
• AccountAbility - the international professional body for accountability.

The SIGMA project has developed the SIGMA Guidelines and a series of
tools to provide clear, practical advice to organisations to enable them to
make a meaningful contribution to sustainable development.

The SIGMA Guidelines consist of:

• a set of Guiding Principles that help organisations to understand
sustainability and their contribution to it.
• a Management Framework that integrates sustainability issues into
core processes and mainstream decision-making. It is structured into
phases and sub-phases.

The SIGMA Toolkit, consists of targeted tools and approaches to help with
specific management challenges, and case studies explaining how
organisations have used the SIGMA Guidelines and Toolkit to tackle real
issues.

More information including the full SIGMA Guidelines and the accompanying
SIGMA Toolkit are available at: www.projectsigma.com.