What is Sustainability Reporting?

Sustainability reporting intends to publish valid information on an organization's social and environmental impacts, particularly for issues of material importance. Material topics are those that must be prioritized by an organization given their likelihood of impacting or being impacted by the organization. Think of them as the intersection of what social and environmental impacts matter most to the organization’s stakeholders, and the significance of those impacts.

Today, a number of standards and frameworks exist to serve the need for measuring, addressing, and reporting on such issues:

What is the Global Reporting Initiative?

The Global Reporting Initiative (GRI) was founded in 1997 to enable transparency about social and environmental impacts and catalyze change through adoption of responsibility and accountability. The development of the GRI came as a response to the Exxon Valdez oil spill, and sought to be the first accountability mechanism for corporate social responsibility. Today, the GRI has reached the 6th version of its standards (2021) and remains internationally recognized as the most rigorous standard for sustainability reporting.

External and Internal Benefits of Sustainability Reporting

External Benefits (for Profit & Planet)

Information users for a sustainability report include a variety of stakeholders such as investors, analysts, policy makers, academics, and reporters. For these stakeholders, sustainability reporting standards like GRI provide a common language for informed dialogue.

As the foremost international standard, GRI offers the following “external” benefits:

• Sharing credible information with stakeholders to build trust

• Attracting financial capital

• Complying with regulation

• Identifying profitable opportunities for sustainable development strategy

Internal Benefits (for People & Processes)

GRI is not just a way to comply or build credibility, but it is equally a guided process for organizational development and strategic improvement. Internally, GRI offers:

• Alignment of vision, strategy, operations, company performance, employee performance, employee satisfaction, and ultimately, customer satisfaction

• Fostering internal awareness of sustainability wins and organizational pride

• Motivating continuous improvement and creativity

• Identifying risks and opportunities in the value chain

Overview of GRI Standards

In early March, Andrew and I had the opportunity to take a 16-hour course on the GRI from ISOS Group, which offered an overview on the universal, topic, and sector standards of GRI, in addition to:

• Applying in-accordance requirements

• Applying reporting principles

• Determining material topics

• Reporting general disclosures

• Reporting material topics

• Presenting reported information

“In Accordance” vs “With Reference”

As a free and publicly available set of standards, anyone can consult the GRI standards for suggestions on how to report about the social and environmental issues their organization wishes to address. However, for a sustainability report to be recognized as “in accordance” with GRI Standards, the organization must apply nine requirements:

1. Apply the reporting principles

2. Report the disclosures in GRI 2: General Disclosures 2021

3. Determine material topics

4. Report disclosures in GRI 3: Material Topics 2021

5. Report disclosures from the GRI Topic Standards for each material topic

6. Provide reasons for omission for disclosures and requirements that the organization cannot comply with

7. Publish a GRI content index

8. Provide a statement of use

9. Notify GRI

Noting these requirements, Driving the Green applauds Callaway Golf for taking initiative to lead the adoption of these standards in the golf industry.

Highlight: Reporting Principles

Applying the eight reporting principles is the first requirement of reporting in accordance with GRI. These principles are worth discussing for a general understanding of how GRI sustainability reports can create the aforementioned internal and external benefits:

Accuracy: reported information must be correct and sufficiently detailed

Balance: reported information must provide an unbiased and fair representation of both the organization’s negative and positive impacts

Clarity: information must be reported in a manner that is accessible and easy to understand

Comparability: information must be reported in a consistent manner such that changes in impacts can be compared across time and with other organizations

Completeness: the organization must provide sufficient information to assess impacts during the reported period

Sustainability context: the organization must provide background information on the wider context of its impacts on sustainable development

Timeliness: information must be reported in time for stakeholders and information users to make decisions, and reports must be available on a regular schedule (e.g., annual or bi-annual)

Verifiability: the organization must gather, compile, record and analyze information so that its quality and accuracy can be easily examined

Highlight: General Disclosures

In addition to following the eight reporting principles above, for a sustainability report to be in accordance with GRI, the reporting organization must disclose 30 general disclosures spanning the following five categories. To maintain the principle of clarity, general disclosures are typically included in an appendix glossary with links to refer back easily to their mention in the report:

1. The organization and its reporting practices

   • Overview of organization

   • Sustainability reporting practices

   • Entities included in its sustainability reporting

2. Activities and workers

   • Employees and other workers

   • Value chain activities

   • Business relationships

3. Governance

   • Governance structure, roles, and composition

   • Roles of overseeing and managing impacts

4. Strategy, policies and practices

   • Organization’s sustainable development strategy

   • Policies and practices for responsible business conduct

   • Compliance with governments and authorities

5. Stakeholder engagement

   • Stakeholder engagement approach

   • Collective bargaining

Driving the Green Takeaways

As mentioned, Andrew and I took a 16-hour course on this topic, which introduced us to the 6th (2021) version of the GRI Standards -- a document that spans over 600 pages and is most often used to create 40+ page sustainability reports that are in accordance with GRI. As such, an in-depth review is beyond the scope of this article, but we want to share the validity of this approach in light of Callaway Golf’s important leadership on golf industry sustainability reporting. Sustainability reporting, and GRI in particular, encourages accurate information sharing on sustainable development impacts. Equally, applying the standards supports the alignment of strategy, purpose, and performance for both organizations and their individual employees. By providing balanced and accurate information on both positive AND negative impacts in a manner that’s accessible and easy to understand. Vulnerability equals leadership.