Our most recent edition of Mott Mosaic includes an article about the Global Reporting Initiative (GRI). The Initiative developed guidelines to enable businesses around the world to measure a company's economic, environmental, and social performance through a single, standardized document. The guidelines' three-pronged approach is the first international reporting tool that allows:
- Companies to measure and compare their performances with competitors;
- Communities to get an accurate picture of local corporations' environmental and social scorecards; and
- Investors to compare companies' "triple bottom line" when making financial decisions.
Robert Kinloch Massie was a founding member of the GRI Board and immediate past executive director of the Boston-based Coalition for Environmentally Responsible Economies (CERES). In an interview with Mott Foundation Communications Officer Maggie Jaruzel, he shared his views about the purpose of the guidelines and how they were developed.
Mott: How did the idea of the Global Reporting Initiative come about?
Robert Massie: Over the last 10 years there’s been an explosion of interest in the environmental and social performance of large companies as part of the process of globalization. We discovered five or six years ago that there were many companies that were interested in reporting, but they were hindered because there was no agreement on what the reporting would look like. Similarly, many investors were interested in gaining information about environmental and social performance of companies, but there was no common standard. Many activist groups were interested in labor practices, human rights, environmental issues, and they, too, could not get good information. This is an opportunity that emerged from a shared need among many different groups to get solid, credible, comparable information about what companies are doing in order to improve the process of globalization.
Mott: Is there any concern that the guidelines only identify the problems but don’t really address them?
RM: The analogy to draw here is with financial reporting. The Financial Accounting Standards Board in the U.S. sets the definitions for revenue, profit and many other accounting categories. These definitions are followed by accountants and other auditing bodies, and it is up to the auditing bodies to enforce whatever level of performance they think is appropriate. There’s a big difference between defining how you disclose, which is a key piece of the accountability puzzle, and then asking companies to meet a particular standard. The GRI is about a disclosure standard. There are many different proposals around performance standards, but without the GRI, there would be no ability to measure or compare what companies are actually doing.
Mott: How would you assess your progress up to this point?
RM: We are right on target. We are very pleased with the speed with which the effort was taken up, and I can say, honestly, that this is the direct result of the early support of the Mott Foundation, which was one of our first sources of grants. We have built the GRI into a permanent global institution with its own board and staff and a new headquarters. This is very much a creation of four or five major global foundations of which Mott had an early and prominent role.
Mott: Can you talk a little bit about the NGOs or the socially responsible organizations that have been involved in the process of fine-tuning the GRI guidelines?
RM: We were very fortunate in that the GRI, from the very beginning, attracted an extraordinary cross-section of leaders from civil society, the investment community, the accounting community and the United Nations. We also had major businesses serving directly on the steering committee, which guided the GRI in its first five years. We were able to earn the support of Amnesty International, Transparency International, the World Wildlife Fund and many other global organizations that don’t normally sit in the same room and agree. That was proof that you can bring people together from fundamentally different institutional backgrounds and perspectives and reach common ground. I think the GRI is historic because it is one of the first times, if not the first time, in which such a voluntary partnership has gone from an idea to a completed institution with new standards in place in under five years. The speed was driven by the creativity and energy of the participants--hundreds and hundreds and hundreds of participants meeting all over the world and linked together in a truly fabulous fashion by the power and speed of the Internet.
Mott: While the first set of guidelines was general, there’s talk of sector-specific guidelines. Can you tell us more about that?
RM: We have a tourism sector that’s been advanced. We have an auto sector that’s being worked on. I think there are four or five that are well under way and there are something like 10 sector supplements in the queue, depending on timing, funding, getting the right critical balance of stakeholders and companies, and building the right relationships with the key industry associations and the United Nations. I’ve heard talk of many sector supplements. Basically, this is designed to answer the question – the completely legitimate question – about how we can reflect the specific challenges of an industry, whether it’s the cement industry or the auto industry or the garment industry or finance or tourism, and adequately reflect the particular sustainability challenges that might not be covered by the core guidelines.