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July 27, 2017updated 24 Jan 2022 1:37pm

Using the GRI sustainability reporting framework enhances ESG disclosures quality, research has found

By sarajuddin isar

Using the GRI sustainability reporting framework enhances the disclosures quality of Environmental, Social and Corporate Governance (ESG) according to a joint research conducted by Governance & Accountability Institute (G&A) and the CSR-Sustainability Monitor (CSR-S Monitor) research team at the Weissman Centre for International Business, Baruch College/CUNY.

G&A and CSR-S Monitor scored the CSR / sustainability reports published by the world’s largest companies to determine if there is a difference between companies following the GRI guidelines and those not doing so.

Of the 572 companies that have been looked at, 481 (84%) used the GRI framework while 91 (16%) did not use it.

G&A and CSR-S Monitor looked at 11 specific contextual elements of the reports published by companies: chair’s / executive message, environment, philanthropy & community involvement, external stakeholder engagement, supply chain, labour relations, governance, anti-corruption, human rights, codes of conduct, and integrity assurance.

Companies using GRI framework consistently scored higher than those not using it for their reporting. The score rating was from 0–100, with 100 being the best.

The overall score for GRI reporter was 45.7% compared to 29.6% of non-GRI. GRI reporters for environmental element scored 64.9% versus 51% for non GRI while for labour relations, the GRI reporter scored 55.8% versus 36.7% for non GRI. For supply chain, anti-corruption and integrity assurance, the score for GRI reporter was 46.6%, 26.4% and 31% respectively versus non GRI reporter which scored 28.2%, 10.4% and 13.3% correspondingly. The largest differential was revealed for human right element where the score for GRI was 45% versus 15% for non-GRI reporter.

Weissman Centre director of research Mert Demir said: “While sustainability reporting has become more mainstream over time, these reports still show limited standardization and considerable variation in content and quality, preventing effective comparisons of their information across time as well as among peers. Though stakeholders often find these reports core to their evaluation of a company, these issues make using them effectively challenging.”

More on the research can be found here.

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