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16 Apr

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The GRI Framework and Walmart’s Sustainability Index

April 16, 2010 | By |

Finding Value in Communicating Sustainability

Over the last few years, thousands of organizations have publicly reported their performance towards sustainability. Currently, in North America, around 500 organizations do so. Reasons for sharing insights into sustainability performance with various stakeholders are multiple. It strengthens stakeholder relationships, assesses new opportunities and risks, it can help identify new markets and enhance reputation.

In addition to reporting, organizations can show their progress towards sustainability through use of certificates and standards. However, the ever-expanding broad range of standards and certifications can make a one easily feel lost in the sustainability jungle. The ISO9000, ISO 14000 and the upcoming ISO 26000 provide guidance to organizations on how to adopt better management practices to environmental and social issues, while the American National Standards Institute (ANSI) is active in developing an array of voluntary standards. Also, financial bodies, such as the Dow Jones Sustainability Index and the FTSE4Good have begun to influence the market.

Larger companies seem to be making headway as well by pressuring suppliers to conform to particular sustainability principles. Maintaining a ‘license to operate’ seems to be the push companies need to implement sustainability into the fabric of daily business activities. As with other large multi-nationals, Arkansas’ very own, Walmart realized the importance of requiring certain standards of their suppliers in order to maintain its own reputation.

Preparing for Walmart’s Sustainability Index

Walmart’s Index set to launch in the next five years, is a tool that can help organizations progress towards sustainability in particular areas, like energy-efficiency, reductions in greenhouse gas emissions and waste, and labor relations. We can start to get an idea of what will be addressed by the Index from the set of 15 questions that were rolled out to its suppliers last year. Ultimately, the Index will communicate a product’s sustainable footprint to consumers.

In preparation for compliance with Walmart’s requirements, suppliers will begin to employ various sustainability tools and standards over the coming years to help set strategies and goals. To keep their stakeholders informed about their progress towards sustainability, companies can include an overview of all their initiatives in a comprehensive sustainability report. In fact, producing a sustainability report will help suppliers communicate their progress towards sustainability, not only to Walmart or end consumers, but to a broad range of stakeholders. Communicating progress can help attract media attention, talented employees, investments, and new customers by showing leadership and ability to create opportunities.

What is GRI?

Many organizations use the Sustainability Reporting Framework developed by the Global Reporting Initiative (GRI) as guidance for their sustainability reporting. GRI is a non-profit network, operating from Amsterdam, consisting of thousands of stakeholders worldwide that build and enhance the Framework together. The Framework, which is freely publicly available, supports organizations in defining report content. A diverse group of stakeholders has developed a list with disclosure points and indicators. Most of these are applicable and usable for any organization, no matter what size, sector or region. The Framework also acknowledges the uniqueness of every organization and its circumstances. Therefore, guidance includes opportunities for each organization to add its own performance indicators in its communications. Reports based on the Framework make for easy comparison of performance of various organizations, or within organizations over time. In order to simplify things, a GRI beginner’s template has been created to assist in the reporting process.

Where do sustainability indexes converge with GRI?

Suppliers can use the list of GRI indicators to report on issues included in Walmart’s questionnaire to show how they are preparing for its Index. Integrating sustainability information into one document not only allows companies to take a proactive step towards compliance with Walmart’s index or anticipated legislation, but the practice of reporting also allows for the streamlining of organizational processes that increase efficiencies, limit liabilities and, in the end, affect the financial performance of a company.

A sustainability report can support companies in responding to various indexes and standards by pulling information from the report and dropping it into required questionnaire fields or formats.

We’ve already started to see proof that transparent companies outperform, and that growth is expected in this arena.

To report or not to report, that is the million dollar question!

ISOS Group is a certified GRI Training Partner for the USA.