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Improving the Quality of Sustainability Reports

Nicole Radziwill

Does your organization report sustainability outcomes via the Global Reporting Initiative (GRI)? If so, these 5 tips from auditors will help you improve the quality of your reports.

The Global Reporting Initiative (GRI), an international standards organization that advances sustainability and social responsibility, defines sustainability reporting as “the practice of measuring, disclosing, and being accountable to internal and external stakeholders for organizational performance towards the goal of sustainable development” (GRI, 2006) Although hundreds of global organizations now submit annual GRI-based sustainability reports, how can they make sure their reports are high quality? And why is this an issue?

Fortunately, three Canadian researchers set out to answer this question, motivated by the observation that “sustainability reports appear to be marketing tool intended to positively influence the perceptions of stakeholders rather than be a reliable source of information.”  (Boiral et al., 2019)  They analyzed 301 auditor statements between 2006 and 2013 (with A+ application level of the G3 GRI framework) to find out how to more effectively apply the principles and standards from GRI. Candidates were chosen from the mining and energy industries because of the profound environmental impacts that these operations have.

Here’s what they discovered. First and foremost, a “high-quality sustainability report” provides transparent information, and demonstrates clear compliance with basic reporting principles that include materiality, completeness, accuracy, and reliability. The best reports also:

  • Demonstrated how materiality was verified. What this means is that the reporting company was able to explain how they decided what values mattered the most, versus which values were “immaterial” to their overarching sustainability goals.
  • Explained limitations of organizational processes or assessment practices that might impact the validity or reliability of the reported metrics. The best reports were from companies who invested in data quality management.
  • Adapted the report to the specific, documented concerns of stakeholders, and explained how stakeholders were engaged.
  • Included all subsidiaries, branches and facilities to provide a complete picture of an organization’s sustainability, rather than leaving some out. This reduced the auditor’s confidence in the report as a whole.
  • Clarified future sustainability plans, and referenced action plans to get there. Some reports did not take a future-oriented approach, which the auditors felt was necessary to obtain solid results.

 
The ultimate mark of a high-quality annual GRI-based sustainability reports is that it instills confidence in its readers that the commitment expressed by an organization’s executives is real, and is shared and applied daily by everyone in the organization. Following the guidance above can help your company take steps to get there.

Additional Resources:

Boiral, O., Heras-Saizarbitoria, I., & Brotherton, M. C. (2019). Assessing and improving the quality of sustainability reports: The auditors’ perspective. Journal of Business Ethics, 155(3), 703-721.

GRI (Global Reporting Initiative) (2006). G3 Sustainability Reporting Guidelines. Amsterdam.

About the Author: Nicole Radziwill is the Vice President, Global Practice Leader, Quality & Supply Chain at Intelex Technologies. Before Intelex, she was an Associate Professor of Data Science and Production Systems, Assistant Director (VP) End-to-End Operations at the National Radio Astronomy Observatory (NRAO), and manager and consultant for several other organizations since the late 1990's bringing quality management to technologically-oriented operations. She is a Fellow of the American Society for Quality (ASQ) with a Ph.D. in Quality Systems from Indiana State University. Nicole serves as Editor of Software Quality Professional (SQP) journal and is a former Chair of the ASQ Software Division. She is an ASQ Certified Manager of Quality and Organizational Excellence (CMQ/OE) and Certified Six Sigma Black Belt (CSSBB). 

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January 16, 2020 @ 03:19 PM EST Manufacturing, Construction, Food and Beverage, Chemical, Energy - Oil and Gas Environment, Quality

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