Insights into the new GRI Standards Launched October 2016

Transcription

1 Insights into the new GRI Standards Launched October 2016 Copyright 2016 by ERM Worldwide Group Limited and/or its affiliates ( ERM ). All Rights Reserved. No part of this work may be reproduced or transmitted in any form or by any means, without prior written permission of ERM.

2 Agenda Introduction to GRI & global context Transition to GRI Standards Potential Challenge Areas Implementation Considerations Other Frameworks Questions 2

3 Introduction to GRI & global context 3

4 GRI evolution G G G3 and G and 2011 G Standards

5 Global context more reporting instruments 5 Source: Carrots & Sticks 2016 via

6 Transition to GRI Standards - Overview 6

7 Why change? Ensure Standards stay relevant Easier to edit, add topics Improve accessibility Make requirements clearer And most importantly Allows governments and stock exchanges to reference GRI Standards in reporting instruments 7

8 Overview of changes Set of modular, interrelated reporting standards Changes focused on format and presentation 8

9 Overview of changes

10 Overview of changes

11 Overview of changes

12 Overview of changes GRI 200 Economic GRI 201: Economic Performance GRI 202: Market Presence GRI 203: Indirect Economic Impacts GRI 204: Procurement Practices GRI 205: Anti Corruption GRI 206: Anti Competitive Behaviour

13 Overview of changes GRI 300 Environment GRI 301: Material GRI 302: Energy GRI 303: Water GRI 304: Biodiversity GRI 305: Emissions GRI 306: Effluents and Wastes GRI 307: Environmental Compliance GRI 308: Supplier Environmental Assessment

14 Overview of changes GRI 400 Social GRI 401: Employment GRI 402: Labor Management GRI 403: Occupational Health & Safety GRI 404: Training and Education GRI 405: Diversity and Equal Opportunity GRI 406: Non Discrimination GRI 407: Freedom of Association and Collective Bargaining GRI 408: Child Labor GRI 409: Forced or Compulsory Labor

15 Overview of changes GRI 400 Social GRI 410: Security Practices GRI 411: Rights of Indigenous Peoples GRI 412: Human Rights Assessments GRI 413: Local Communities GRI 414: Supplier Social Assessments GRI 415: Public Policy GRI 416: Customer Health and safety GRI 417: Marketing and Labelling GRI 418: Customer Privacy GRI 419: Socio Economic Compliance

16 Requirements, recommendations, guidance Three types of content featured in the Standards: 1. Requirements are mandatory for reporting on that topic Clearly labeled Uses the word shall and shows in bold font in the text 2. Recommendations Encouraged or recommended, but not required Uses the word should 3. Guidance Provides explanation and examples 16

17 GRI 303-3: Example - water recycled and reuse 17

18 Reasons for Omission

19 Key terms & other changes G4 terms simplified or revised Indicator Aspect topic disclosure Disclosures on management approach (DMA) management approach disclosures Clarification of employee and worker (person that performs work) Content index format - not mandated Employee and worker terms defined The term workers includes, but is not limited to, employees. Further examples of workers include interns, apprentices, selfemployed persons, and persons working for organizations other than the reporting organization, e.g., for suppliers. Individual GRI Standards specify whether a particular subset of workers is to be used. Sector supplements can be used, but not required 19

20 Merged Topics Location in GRI topic-specific Standards GRI 405: Diversity and Equal Opportunity GRI 412: Human Rights Assessment GRI 414: Supplier Social Assessment GRI 417: Marketing and Labelling GRI 419: Socioeconomic Compliance G4 Aspects Diversity and Equal Opportunity Equal Remuneration for Women and Men Investment (Human Rights) Assessment (Human Rights) Supplier Assessment for Labor Practices Supplier Human Rights Assessment Supplier Assessment for Impacts on Society Product and Service Labeling Marketing Communications Compliance (Society) Compliance (Product Responsibility) 20

21 Reporting claims Different options for use of modular Standards In accordance Core or Comprehensive GRI referenced option to reference individual Standards In accordance consistent with G4 Disclosures Management approach, topic boundary Reporting Principles Required statements: This report has been prepared in accordance with the GRI Standards: [Core/Comprehensive] option. or This material references [title and publication year of the Standard], for each Standard used GRI to be notified of all claims 21

22 Potential Challenge Areas 22

23 Principles Disclosure in GRI 102: General Disclosures requires an explanation of how the organization has implemented the Reporting Principles for defining report content. Report Content Report Quality Stakeholder Inclusiveness Accuracy Comparability Sustainability Context Balance Reliability Materiality Completeness Clarity Timeliness 23

24 Materiality G4 Principle: The report should cover Aspects that: Reflect the organization s significant economic, environmental and social impacts; or Substantively influence the assessments and decisions of stakeholders 24

25 Materiality - Standards Principle same as G4 Additional definition of impact In this context, impact refers to the effect an organization has on the economy, the environment, and/or society (positive or negative). A topic can be relevant and so potentially material based on only one of these dimensions. The use of this exact matrix is not required; however, to apply the Materiality principle, it is required to identify material topics based on these two dimensions. 25

26 Material Topics Reporting on material topics 2.5 For each material topic, the reporting organization: shall report the management approach disclosures for that topic, using GRI 103: Management Approach; and either: shall report the topic-specific disclosures in the corresponding GRI Standard, if the material topic is covered by an existing GRI Standard (series 200, 300 and 400); or should report other appropriate disclosures, if the material topic is not covered by an existing GRI Standard. For material topics not covered by the GRI Standards, it is: Required to report the management approach for that topic using GRI 103 Recommended to report other appropriate disclosures for the topic 26

27 GRI 103 Management Approach

28 Management Approach - Boundary Disclosure asks organizations to Explain why the topic is material Describe the topic boundary Where the impact occurs The organization s involvement with the impacts Report any specific limitation regarding the topic boundary 28

29 Management Approach - Strategy Disclosure asks organization to: Explain how they manage the topic State the purpose of the management approach Describe: Policies; Commitments; Goals and targets; Responsibilities; Resources; Grievance mechanisms; and Specific action, such a processes, projects, programs and initiatives. 29

30 Management Approach - Evaluation Disclosure asks organizations to Explain how they evaluate the management approach, including Mechanisms for evaluating effectiveness Results of the evaluation Related adjustments 30

31 Implementation Considerations 31

32 32

33 Gaining Value from the Process New data points Increase executive visibility Assess the company s impacts Engage stakeholders Tighten reporting

34 Third-Party Assurance GRI continues to recommend assurance Scope of Assurance will increasingly focus on "what is important" (material topics) rather than "what is easy to assure" 'in accordance' criteria is more definitive - less room for interpretation 34

35 Timing Use of GRI Standards required for reports published from 1 st July 2018

36 Relationship with other frameworks Reporting on SDGs and requirements of South Africa s King IV code, EU Directive, Singapore SGX and Thailand SET 36

37 Sustainable Development Goals There is no Plan B. The 2030 Agenda and SDGs is it - Lise Kingo, Exec Director, UN Global Compact speaking at GRI

38 GRI Standards and the SDGs Focus on impacts aligned with reporting on SDGs SDG Compass available Other GRI services available for G4 reports - to be updated for Standards: Mapping document SDG Mapping Service (available in 2018) Content index format more flexibility to map disclosures 38

39 SDGs Focus on specific goals whereby the nature of the business Nestle feels they can maximize impact on a global scale. Links into Dow's overall role in addressing the global challenges in In addition to these focus areas, our current product portfolio allows us to make some contribution to Goals 2, 6, 7, 12, 15. Our operations/internal targets and international operations will have a minor influence on Goals

40 A Changing Reporting Landscape in Africa African stock exchange requirements to include ESG disclosures Nigeria, Nairobi, Namibia, YB1 Botswana & Tanzania South African GHG Emission Reporting Regulations Regulations to be introduced by early 2017; annual reporting by 30 April IPCC Guidelines apply Validation by government South African Energy Management Reporting Requirements Expected to be introduced by early 2017; annual reporting within 60 days of financial year end Report on energy consumption & management plans (efficiency) Use SANS & King IV Report on Corporate Governance for South Africa Effective 1 April Principles: Apply AND explain approach Outcomes-based governance (& reporting) Reaffirms IIRC s <IR> Framework Assurance requirements determined by Audit Committee

41 Slide 40 YB Yakira Bahadur, 04/11/2016

42 How do GRI Standards Support the Complexity? Flexibility: Reference specific GRI Standards: Sector disclosures VS In Accordance : If GRI Standards requirements have been fully met Compatibility with IIRC s <IR> Framework: GRI Standards provide detail on disclosures while IIRC s <IR> Framework is high-level South African National GHG Reporting Regulations: GRI 305: Emissions (note different methodology) South African Energy Management Reporting: GRI 302: Energy

43 EU Non-Financial Reporting Directive Member state Which companies need to report? Those classified as a Public Interest Entity (PIE) with more than 500 employees When does it come into force? For Member States (12/15) on 6 December 2016 (Includes the UK!) Information should be included in Annual (Directors) report published after 31 December 2016 The EC expects the rest by April 2017 Current status transposition into law Denmark Fully accepted the Directive in substance (may 2015) Greece, Luxemburg, Hungary, Romania, Estonia, Slovakia UK Germany Communicated their National Implementing Measures to the Commission. Public consultation period, expected transposition into law from 1 January 2017 Published a policy draft amending the German Commercial Code in September 2016.

44 EU Non-Financial Reporting Directive What disclosures are required? Reporting guidance: Reporting is mandatory yet flexible - report or explain approach: Expected to use an internationally recognized instrument. EC non-binding guidance available 6 December Auditors check whether the disclosures are reported. Member States may also require verification by an independent assurance provider. A Non-financial statement (in Annual or separate report) containing disclosures on the following matters, as a minimum: Environmental matters; Social and employee aspects; Respect for human rights; Anticorruption and bribery issues; and Diversity in their board of directors. Disclosures should include: A description of the undertaking s business model; a description of policies for each matter, including due diligence processes; the outcomes of these policies; the principal risks related to these matters linked to operations; and explain how the undertaking manages those risks; plus relevant non-financial key performance indicators. PLUS a more detailed DIVERSITY disclosure in the corporate governance statement.

45 SGX Sustainability Reporting Guide The Guide is now finalized. It allows companies flexibility in when and how to report, i.e. phased approach in the adoption of sustainability reporting. Listed companies must issue the report, or explain the failure to do so - comply or explain basis. Sustainability Reporting Development Timeline 31 Dec Dec Dec Dec 2019 Assessment of material ESG factors Commitment & approach to address the factors Issue first sustainability report by 31 Dec Primary Components Issue subsequent sustainability reports within 5 months Ongoing Five Primary Components Materiality Policies, Practices and Performance Targets Reporting Framework Board Statement

46 SET Sustainability Reporting In Thailand, sustainability reporting is mandated by the Securities and Exchange Commission (SEC). SET has regularly organized training related to sustainability and ESG reporting. Supported by SET Sustainability Awards and Thailand Sustainability Investment 45

47 Questions 46

48 About ERM ERM is one of the leading sustainability consultants worldwide, providing environmental, health and safety, risk and social consulting services in influential assignments. Over 4,500 employees globally in over 160 offices in 40 countries. Over the past five years we have worked for approximately 50% of the Global Fortune 500 companies across the world Over 40 years of experience in the field with in-depth subject matter and sector experience. Who to talk to at ERM: James Margolis Partner, North America Philadelphia, US Jennifer Iansen-Rogers Head of Corporate Assurance London, UK Mark Hoff Partner, Central Europe Frankfurt, Germany Nat Vanitchyangkul Partner, Southeast Asia Bangkok, Thailand Donald Gibson Partner, South Africa Johannesburg, South Africa Juan Guerra Technical Director Bogota, Columbia Swaroop Banerjee Sustainability Consultant New Delhi, India Fernanda Britto Sustainability Consultant Sao Paulo, Brazil Copyright 2016 by ERM Worldwide Group Limited and/or its affiliates ( ERM ). All Rights Reserved. No part of this work may be reproduced or transmitted in any form or by any means, without prior written permission of ERM. 47