In order to know if GRI is a necessary evil or not, let’s first understand the true meaning of GRI.
What is GRI?
GRI stands for Global Reporting Initiative and it is an international organization which helps governments, businesses, and organizations communicate and understand the impact that they have on various social and political issues. These issues include climate changes, corruption, human rights and many more.
GRI helps various organizations have a positive impact on the environment, society and in turn the economy of a country. For the same reason, more and more companies have started publishing an annual sustainability report.
Why do companies and organizations find it useless?
Some believe that these reports are more of a waste of time and don’t help in progress. Why? The following are a few of the reasons why organizations believe it is an impractical practice:
- These reports require extensive research which needs time as well as efforts.
- GRI reports require complicated language. The use of complicated and the lengthy text reduces the understandability of the text.
- The general audience will not waste their time into reading a report which lacks is difficult to understand. This is the reason sustainability reports sometimes fail to connect with the general audience.
- Apart from GRI, there are many more standards for creating sustainability reports like International Integrated Reporting Council (IIRC) and Sustainability Accounting Standards Board (SASB). People often get confused between these standards and mess up the report.
However, to think that these reports are unnecessary and fail to add value to the business is wrong. GRI acts as a bridge between governments and businesses and enables them to make a positive contribution to Sustainable Developmental Goals.
Let’s take a look at the benefits of reporting:
There are some internal benefits that the companies and organizations can experience if they indulge in the practice of creating GRI reports. They are as follows:
- The biggest advantage of the GRI report is that it allows companies and organizations to get familiar with the risks and opportunities involved in their business.
- The report identifies the effect of their financial performance on their non-financial performance and vice-versa.
- Businesses can easily formulate a long-term management policy and plan.
- The GRI report helps the organization work efficiently and reduce costs.
- Companies can perform in compliance with the various laws, quality and performance standards, norms and codes.
- Creating GRI reports allows companies to recognize and stay clear from possible environmental, social or governance failures.
- It also makes the comparison between internal performance and between organizations and sectors easy.
Apart from the internal benefits, there are also certain external benefits GRI reports. They are as follows:
- GRI reports help in environmental safety and helps organizations abide by social and governmental laws.
- It helps in the betterment of a company and improves their brand reputation and loyalty.
- Allows stakeholders to fully understand the core values of the organization and also their tangible and intangible assets.
- Helps in the sustainable development of the organization.
GRI reports are available on their website and can be viewed by anyone. The spreadsheet with links to all reports is also available. It is necessary for a company to understand its economic, environmental and social impact, to be able to improve it. These reports enable transparency and foster sustainable growth for businesses. No matter how cumbersome the reports are, GRI is a necessary evil which organizations need to embrace.