ANSWER # 1: GLOBAL REPORTING INITIATIVE (GRI)
Global Reporting Initiative (GRI) is a non-profit organization which is established to provide guidelines to the businesses to develop business conduct integrating sustainability as key measure. GRI requires businesses to integrate social and environmental justice and care in business core objectives along with profitability as primary objective. GRI is world’s first organization that requires business to develop business model that adheres to the principle of social, economic, and environmental sustainability as designed by global network of sustainability experts. For this purpose, GRI has developed guidelines requiring businesses to provide organization’s strategy and analysis, with management approach towards setting sustainability goals of transforming business into sustainable business model with parameters and indicators designed towards along with company profile. It also explores to governance as well as commitment of the business towards declared responsibility. Promising transparency and accountability in the report developed under GRI guideline business also gains the benefits of increase trust and confidence from stakeholders (GRI, 2011).
GRI first came into place in 1997 in Boston by non- profit organization of US entitled Coalition for Environmentally Responsible Economies (CERES) and the Tellus Institute. Organization initiated plan to develop the measures to be abided by organizations worldwide to environmental care as rules set by CERES. The project was named as Global Reporting Initiative. Multi-stakeholder Steering Committee was developed in 1988 that intended to make business more responsible than for environment only. GRI report was intended to provide more detailed plans of business in line with being responsible for direct and indirect stakeholders. Hence, in the year 2000, first GRI guidelines were presented. The committee was then made separate institution and since then it has been working with a network of around 30,000 sustainability experts from around the world (GRI, 2011).
ANSWER # 2
GRI guidelines for reporting are being updated on intervals in order to improve the level of responsibility in the business conduct. These guidelines are also intended to set principles in defining report. Along with maintaining quality of information provided in the report standard format, it enables investors and other stakeholders to value business in respective areas of concern. Hence, reducing the chances of information manipulated. Referred guidelines are known as generations. Most recent updated guideline has been in third generation guideline upgraded as G3.1. G3.1 has added responsibilities related to local community impacts, human rights, and gender in addition to the already developed measures (GRI, 2011). Therefore, businesses based on the referred guidelines are required to adhere attention to the impact respective business pose to the new dimension added. G3.1 guideline also includes the core measures related social, economic, environmental and societal factors defined for sustainable business model (GRI, 2011).
Traditionally, primary objective of business being profit maximization has resulted, business to go beyond boundaries of not being disadvantageous to environment and society in achieving such objective. Therefore, these guidelines are centrally intended to limit the operations of businesses for profit maximization to be achieved at the cost of society. Hence, various dimensions are added to the guideline to incrementally safeguard environment, society and people from harmful exploitation. Another objective these detailed description are intended to achieve are the level of transparency and accountability in the business conduct; thereby increasing level of customer and investors confidence on the firm (GRI, 2011). Further, it also provides investors and customers the information related to approach employed by business and management along with the attitude of the management in making the business sustainable with the target sets as well as the percentage of target achieved by the business (GRI, 2011).
GRI initiative has also developed levels of C, B and A. These levels serve as indicators related to the level of GRI framework that has been employed in the reporting. The system is known as Application Level System. Based on the level of compliance to various frameworks defined, the reporter self assigns report level. Further “+” is also an additional level assigned each level in case the reporting organization has acquired external assurance for the reporting.
These levels enable business level wise compliance to businesses. For instance, beginners organizations that have been reporting for the first time can comply with basic level framework as a matter of transforming business model around the defined framework by GRI. Higher the level of compliance with GRI level, the better is the firm in being sustainable and hence responsible. Big corporations value respective business model for being in compliance with higher level of GRI (GRI, 2011).
ANSWER # 3
Simplot Pty Limited has taken measures to transform business from traditional business model to sustainable business model with integrating responsible attitude towards social, environmental and other areas defined in GRI framework.
The economic indicators include sustainability measures to be employed in six manufacturing and seven sales units. Working at these manufacturing and sales unites are 2,440 employees in order to generate sales of around 1.6 billion turnover per year. Furthermore, 373 farmers are cultivating 8,000 hectares of land to produce 1,182 food products along with 125,000 tones of frozen chips while 2,800 tones of sea food purchased include economic resource of the business (Simplot Pty Limited, 2012). Overall business employs renewable energy; arable land sea food; clean air and water taking 312,900 tons of vegetable crops per intake indicate economic factors employed for business with sustainable supply chain. Further, in order to constantly come up with innovative products for Simplot Pty Limited, the company has in-house business research team of 60 scientists (Simplot Pty Limited, 2012). These scientists include team of Ph.Ds that are constantly updating ideas for generating sustainability in the business model. Innovation team also has a strong eight member offering updating packaging, processing and material expertise in the business to integrate sustainable responsibility towards economic resources. Further, Simplot Pty Limited has also employed programs to integrate the community programs in considerations in business model. These programs enhance and acknowledge the role of community in business. For instance, FOOD Bank program feed countless hungry people of the community. Hence, overall business has been employing strategies to integrate greater sustainability in the business (Simplot Pty Limited, 2012).
ANSWER # 4
Compliance to GRI framework offers benefits to organization to a great extent; however, at same time it incurs cost. Cost and benefit of GRI are as follows:
- Incurs cost of preparing report with expert consultancy.
- Cost increase in meeting the standards defined to reporting framework such as cost incurred in developing working environment that meets standards defined in the framework.
- Businesses are able to gain valuable rating from investors for being sustainable in conduct.
- Holistic review of business from all perspective increases business’ responsiveness towards perspectives understandable by customers and other stakeholder; unlike financial reporting that require understanding of financial concepts.
Benefits to the business from compliance of GRI framework are much higher than cost incurred for the purpose. Further, in contrast to cost incurred the benefits are spread in long term business prospects for business as well as society.
GRI. (2011). Sustainability Reporting Guidelines. Available from https://www.globalreporting.org/resourcelibrary/G3.1-Sustainability-Reporting-Guidelines.pdf [Accessed 15 April, 2013]
Simplot Pty Limited. (2012). Sustainability Report. Available from http://www.simplot.com.au/pdf/simplot-sustainability-report-02.pdf [Accessed 15 April, 2013]