‘Blind spots’ of the GRI Guidelines relating to strategic sustainability (TNS)
Adapted from a wider paper written by Peng Peng, Pinar Oncel, Yurie Makihara, Chieko Azuma & Pablo Villoch.
The GRI guidelines are designed to provide a generic, trusted, and credible framework for sustainability reporting. However, when applying this tool, practitioners should consider some of its blind spots.
The first blind spot observed is the lack of an explicit definition or reference to a definition of Sustainability or Sustainable Development. Although the guidelines contain a glossary that includes a lot of words and expressions, there is no interpretation of these key concepts (Moneva et al. 2006). It represents a paradox. It indicates that they reached a multi-stakeholder consensus on sustainability indicators without a minimum consensus on a common definition of sustainability. How is this possible? The GRI let each company provide their own interpretation according to their own context. Indeed, the definition of Sustainability for a Tobacco company or a Mining company might be widely different from a Municipality.
Secondly, as long as GRI guidelines let the organization define the boundaries and scope of the report, it allows them to limiting information only to some part of the organizational activity. This could lead to hiding the real unsustainability of the organization, which could be interpreted as a lack of transparency by some stakeholders. It can lead organizations to focus their reports on those activities which provide better reputation rather than providing authentic representation of its sustainability performance.
As far as GRI guidelines are based on the triple bottom line, they provide a holistic view, acknowledging the three dimensions: economic, social and environmental. However, this does not conduct to a systems perspective because it neglects the complexities of interaction among those dimensions (Brown et al. 2009, Mark Everard pers. com. 2009). This leads to the absence of proposals for integrated systemic or cross-cutting indicators (Brown et al. 2007, pp. 31). This reductionist interpretation of Sustainable development as three pillars may lead to a simplified understanding of inter-related complexities, and thus fundamentally undermining the validity and quality of a sustainability report produced through the application of the guidelines.
Finally, the GRI application level ranking is measured by the number of indicators being reported, and not whether the principles are being complied. This implies a risk of becoming a perverse incentive, since organizations focus more on accomplishing as many indicators as possible, neglecting the importance of stakeholders inclusiveness in the reporting process. This could lead to very technical and complete reports which could be useful for analysts, consultants and shareholders and maybe some NGOs but not an instrument of true dialogue and communication with other stakeholders such as people who would be affected by construction of new factory or mining site.
Despite the loopholes discussed above, GRI has already made significant contributions to the ongoing discourse on accountability, corporate social responsibility and the appropriate roles of business, government, civil society and professional sectors in academic transition. GRI is here to stay. The question is not whether or not to report sustainability performance but how.
Indeed, the GRI guidelines can be a powerful tool to help us in the process of sustainability reporting, if used with other complementary tools, such as The Natural Step framework, Global Compact or AA1000. The FSSD would provide a solid definition of sustainability, based on non-overlapped principles. Global Compact principles are compatible with GRI guidelines and its Communication of Progress can be integrated in the Sustainability report. Similarly, using the AccountAbility 1000 standards, would assure a systematical management of stakeholders dialogue. The next ISO 26000 CSR guidelines, which will be launched in 2010, should also be taken into consideration, since when the International Standards Organization ISO undertook to develop ISO 26.000, it adopted for the first time in its own history the GRI signature, multi-stakeholder and working group process.
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- Good Corporate Governance (MSLS Thesis 2005)