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A Year in the Life - Global Reporting Initiative's First Year Back in the USA

BY: CR MAGAZINE - MIKE WALLACE

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Vol 3. No 1 January/February 2012

Global Reporting Initiative’s first year back in the U.S. of A.
By Mike Wallace

Reporting Initiative began at Ceres in Boston in 1997 and has since achieved international impact. But, with corporate reporting less common in the United States, GRI was reestablished here almost exactly one year ago. In fact, it was on January 31, 2011 that GRI officially announced its reentry into the U.S. market at the NYSE at an incredibly successful launch event for GRI’s Focal Point USA. (It’s nicely encapsulated in this five-minute video: vimeo.com/24417074.) We want to thank not only Michelle Greene of NYSE Euronext for hosting such a momentous moment for GRI, but also the team at CR Magazine for connecting GRI with NYSE Euronext.

Ever since the launch last year, it has been a nonstop, whirlwind tour of North America to raise awareness about sustainability, sustainability reporting and of course, GRI. As we tally up 2011 data for our own internal reporting processes, we’re seeing significant and tangible indications that GRI’s presence in the United States is having its intended effect and is directly supporting GRI’s global vision and mission

Thanks to the ongoing support of key U.S. stakeholders like our founding sponsors (Deloitte, Ernst & Young, KPMG and PwC); our U.S. sector leaders (Bloomberg, Clorox, Dell and Mosaic), our certified training partners (Brown Flynn and ISOS); and a range of new U.S. organizational stakeholders, we are witnessing not only a rapid increase in GRI reporters, but also use of GRI across all parts of the U.S. economy.

Facts and a Factoid

We don’t officially stop counting 2011 reporters until March, but based on current information we are estimating roughly a 35 percent increase in GRI reporters in the US from 2010 to 2011. If you are interested in the overall global and regional analysis of reporting trends for last year, you can see GRI’s Sustainability Reporting Statistics 2010.

Thanks to excellent research on the sustainability reports being released by U.S. organizations, our new U.S. data partner, the Governance & Accountability Institute is helping identify previously unknown GRI reporters. An interesting and generally unknown factoid is that many GRI reporters aren’t aware that they need to register their GRI report if they want to make it into our database of reporters. Not only that, but here in the U.S. we are realizing that many reporters aren’t fully aware of how the GRI application levels can and should be applied, nor are they aware of the report services. If you have published a sustainability report and you’re not in the Governance & Accountability Institute’s database, use the information on their site to get registered (see www.sustainabilityhg.com).

After almost 15-years’ worth of effort, GRI and its stakeholders can proudly state the following: 

GRI is being written into national regulation, implemented by state-owned companies, integrated into stock exchange listing rules, and increasingly woven into the procurement policies of some very big institutions. Most of this is summarized in the publication Carrots and Sticks, but you can also keep up on the latest developments throughGRI’s Report or Explain Campaign Forum.

Value Chains

Supply chain management is going to be the biggest game-changing event for sustainability. Not only managing the supply chain, but making the information publicly available is already changing the way sustainability performance is being embraced, standardized, and disclosed.

In the U.S. we saw two very interesting GRI developments from two well-known commercial institutions. Last October Microsoft announced a new supply chain initiative that encourages suppliers to report on sustainability using the GRI Guidelines. And just this January Apple announced its own supply chain approach, which also suggests that suppliers report using GRI.

This is not a new approach, globally, but it is new here in the U.S. Globally, GRI is working with a range of well-known companies to not only ask for disclosure from their suppliers, but to train the suppliers on reporting. Through GRI’s Global Action Network, multinational corporations are collaborating in this unique program that promotes sustainability, as well as transparency in their supply chain.

Why is this important, especially in the U.S.?

First of all, think about how most sustainable supply chain programs evolve. Most are designed in a b-to-b fashion—keeping everything proprietary and locked down between the companies involved. Company A has a concern about its supply chain. It spends time and resources to develop its own proprietary survey, review it with legal, and then send their suppliers a request for information in a certain way, by a certain date. The suppliers, many of whom are already complaining about survey fatigue from other customers and other stakeholders, respond to this new “business requirement.” If the company has a sustainability strategy and program, a dedicated person, and a sustainability report, it can more easily access and report on this information.

In a perfect world, Company A receives responses from all its suppliers in a timely manner, with consistent and comparable units of measurement, and all guaranteed to be true and accurate. But we are not living in a perfect world. Nor is it necessarily in Company A’s best business interest to be requesting, collecting, managing, and proofing such data—it’s not their core business.

The actions taken by the companies involved in GRI’s GANTSCh Program, as well as the announcements made by Microsoft and Apple, are an indication of the future of more efficient and effective supply chain management programs.

First, leveraging the GRI guidelines and GRI’s global momentum sends a strong message about standardized, consistent, and credible reporting on a set of performance metrics that have been created, vetted, and used by some of the world’s leading thinkers in sustainability. Second, asking suppliers to adopt the most widely used sustainability reporting framework in the world would let them know that there is a globally accepted approach. Third, having consistent GRI reporting in the supply chain could then roll up more easily and accurately into the buyer’s own sustainability report. Fourth, asking the suppliers to publish their own GRI report not only puts their information out in the public domain for a wide range of stakeholders to assess its validity, it can also be used by the suppliers for a range of other interested audiences. Finally, for those in the supply chain who have already done a GRI report, there would be a resounding sigh of relief that their voluntary efforts to report on sustainability are being accepted by one of their most important stakeholders: their customers.

Avoiding Survey Fatigue

Have a look at the GRI reporters on the Governance & Accountability Institute site. Now think about how many of these companies are already voluntarily reporting on sustainability: Are they in your supply chain? Are you in their supply chain? Do any of you need yet another approach to reporting on sustainability, or another questionnaire to fill out, or another one to verify yourself?

With that in mind, consider that the President’s Executive Order 13514 Executive Order Focused on Federal Leadership in Environmental Energy and Economic Performance is asking all branches of the U.S. government to report on sustainability and that this too requires a look at their supply chain. The U.S. government is the largest single buyer in the world. Most of that procurement is managed through the General Services Administration (GSA). Now consider how much GRI activity is already happening within various branches of the U.S. government. Much of this is outlined in GRI’s February Newsletter “US Federal Community Marches into Sustainability 2012”

Consider the global trends we are seeing, the developments outlined in this very article, and what you have probably experienced in your own work in this field. When you look at the GRI reporters list, think about how many of those GRI reporters are in the U.S. government’s supply chain. Where might all this be heading? Where would you like it to head?

Fortunately, GRI’s time here in the United States has given us a unique opportunity to not only see these developments, but also to share some of these global best practices among a wide range of stakeholders. This includes the GSA, which now knows a lot about GRI after holding an internal GRI certified training course last October.

We are not sure how this is going to play out, but from talking to the long list of GRI reporters who are already in the U.S. government’s supply chain, we’re certain that none of them are looking for another sustainability survey or questionnaire. In fact, one long-time GRI reporter from the automotive sector and a big supplier to the U.S. government suggested that GRI needs to initiate similar training programs in every U.S. state. This company had just received its latest sustainability survey, a lengthy procurement document from one of its largest fleet buyers—the State of California’s Department of General Services (DGS). They said it was good that they had just finished their latest GRI report and could draw from it, but they also said it would be much more efficient if California would accept and read its GRI report.

Imagine the survey fatigue and wasted resources on all sides of the equation—the buyer and the seller, the stakeholder and the seller. Imagine if all the nation’s governors and mayors implemented their own approach to managing their supply chains.

With that said, GRI is actively talking to the states of California and Washington and the cities of Atlanta, Chicago, Cleveland, New Haven, and New York in hopes of connecting more dots and raising the awareness about the utility GRI reporting could bring to all interested parties. 

Mike Wallace is director of GRI Focal Point USA.