Ready to

Report?
Introducing sustainability
reporting for SMEs

This document is available for free

download on www.globalreporting.org
2 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

Contents
PUBLICATION DEVELOPMENT FOREWORD 3
Content development
Enrique Torres Rodriguez, GRI PURPOSE OF THE BOOKLET 3
General supervision
SECTION A: VALUE OF SUSTAINABILITY
sthildur Hjaltadttir, GRI
REPORTING FOR SMEs 4
Text Revision
Carinne Allinson SECTION B: GRI REPORTING PROCESS
FOR SMEs 8
Design and Layout
Mark Bakker, Scribbledesign
ACKNOWLEDGEMENTS 19
Photography
Cover: iStockphoto.com
Page 4, 8, 15, 17, 18, 19: iStockphoto.com
Page 14: Creative Commons/Thomas

COPYRIGHT
This document is copyright-protected by Stichting
Global Reporting Initiative (GRI). The reproduction
and distribution of this document for information is
permitted without prior permission from GRI.

However, neither this document nor any extract

from it may be reproduced, stored, translated, or
transferred in any form or by any means (electronic,
mechanical, photocopies, recorded, or otherwise)
for any other purpose without prior written ABOUT GRI
permission from GRI. The Global Reporting Initiative (GRI) promotes the use
of sustainability reporting as a way for companies and
Global Reporting Initiative, the Global Reporting organizations to become more sustainable and contribute
Initiative logo, Sustainability Reporting Guidelines, to a sustainable global economy.
and GRI are trademarks of the Global Reporting
Initiative. GRIs mission is to make sustainability reporting standard
practice. To enable all companies and organizations
2014 Global Reporting Initiative to report their economic, environmental, social and
governance performance and impacts, GRI produces free
Sustainability Reporting Guidelines.
DISCLAIMER
Neither the GRI Board of Directors, the Stichting GRI is a not-for-profit, network-based organization;
Global Reporting Initiative or its project partners its activity involves thousands of professionals and
can assume responsibility for any consequences organizations from many sectors, constituencies and
or damages resulting, directly or indirectly, from regions.
the use of GRI publications. The findings and views
expressed herein do not necessarily represent the www.globalreporting.org
views, decisions or the stated policy of GRI or its
project partners, nor does citing of trade names or Contact: info@globalreporting.org
commercial processes constitute endorsement.
3 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

Foreword
As a small or medium-sized company you are reading your company can measure its performance and manage
this booklet because you want to know more about change. This will drive improvement and innovation inside
sustainability reporting. Lets assume that your company your company.
is one of the increasing number of Small and Medium-
sized Enterprises (SMEs) that recognizes the need to better In recent years, Small and Medium-sized Enterprises (SMEs)
understand your sustainability impacts and how to make in various regions have begun to publish their sustainability
your business operations more sustainable and maybe even reports. GRI has followed this movement through a number
communicate your sustainability performance. But you of projects since 2008. SMEs that have participated in these
probably have a lot of questions, such as Why should your projects say that the value of the reporting process was
company do a sustainability report? Why should you use the much greater than they had anticipated at the beginning of
Sustainability Reporting Guidelines of the Global Reporting the process. They found that sustainability reporting helped
Initiative (GRI)? What would your company have to do to take them to identify their most significant issues to focus on and
the first steps? This booklet will help you to answer these from there improve productivity and make cost savings. In
questions. addition, their competitiveness often improved after gaining
access to new markets and new clients.
A sustainability report provides information on your com
panys most important impacts positive or negative To conclude, GRIs experience is that many SMEs believe that
on the environment, society and the economy. GRIs there is a clear connection between sustainability reporting
Sustainability Reporting Guidelines are the most widely and achieving real change within their company.
used, comprehensive sustainability reporting standard in the
world. G4, the fourth generation of the GRI Guidelines, was With that in mind, GRI invites you to get Ready to Report!
launched in May 2013 and involved extensive stakeholder
consultation and dialogue with hundreds of experts all Important to know!
around the world, from a wide variety of sectors, including A Small and Medium-sized Enterprise (SME) is a category of
companies, civil society, labor organizations, academia, enterprise that falls below a certain threshold in size, often
and finance. The aim of G4 is to help reporters prepare determined by number of employees and annual turnover
sustainability reports that matter so that robust and (revenue). These thresholds are usually determined by
purposeful sustainability reporting becomes standard governments and can vary between sectors, with a maximum
practice. Your company can use these Guidelines to develop of 250-1,000 employees and a turnover of up to 50 million.
your sustainability report and in the process can generate Further criteria determine whether a company is either medium
reliable, relevant and standardized information on your or actually small. Some countries even recognize a micro
sustainability impacts and performance. This information can enterprise as an even smaller type of business category.
then be used to assess opportunities and risks, and enable According to the United Nations Industrial Development
more informed decision-making both within your business Organization (UNIDO), SMEs make up more than 90% of
and among your stakeholders, such as your clients. By businesses worldwide and on average account for 50% of the
developing and communicating your understanding about Gross Domestic Product (GDP) of all countries and for 60% of
the connections between sustainability and your business, their employment.

Purpose of the booklet

This booklet is for SMEs that are considering whether sustainability reporting based on the experiences and
sustainability reporting is relevant for them and if so, how to testimonies of SMEs that GRI has engaged with in a number
start the reporting process. It provides a simple introduction of projects since 2008.
to sustainability reporting using the GRI G4 Guidelines so
that your company can take the first steps in its sustainability Introducing five easy steps to preparing a sustainability
reporting journey. This will be done by: report using the G4 Guidelines: Section B details the steps
for creating a GRI sustainability report using the five phase
Making the case for sustainability reporting for SMEs: GRI model for a sustainability reporting process: Prepare,
Section A looks at the internal and external benefits of Connect, Define, Monitor and Report.
4 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

ForewordA
Section
Contents

Value of sustainability
reporting for SMEs
5 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

Value of sustainability reporting for SMEs

1. Value of internal changes (internal benefits) from nearly 400 SMEs that the GRI has worked with in a
2. Value of recognition (external benefits) number of GRI-initiated projects1. The section is divided
into two parts: The value of internal changes (internal
This section sets out what SMEs have discovered is the benefits) and The value of recognition (external
value of sustainability reporting. It is based on testimonies benefits).

Value of sustainability
reporting

VALUE OF VALUE OF
INTERNAL RECOGNITION
CHANGES (EXTERNAL
(INTERNAL BENEFITS)
BENEFITS)
Vision &
strategy Reputation
& trust

Management
systems Attracting
funding
Strengths &
weaknesses
Competitive
advantage
Employee
motivation

Stakeholder
engagement

1) These projects have been implemented under GRIs GANTSCH Program from 2009 to 2012 and the Business Transparency Program from 2013.
See www.globalreporting.org/reporting/reporting-support/support/Pages/default.aspx for more information.
6 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

1. Value of internal changes (internal benefits)

1.1 DEVELOP VISION AND STRATEGY ON
SUSTAINABILITY Completing a sustainability report meant reflecting
The reporting process encourages your company to identify and analyzing, learning to put quantifiable values on
your vision and strategy for operating in a more s ustainable the sustainability of all parts of our business. This helped
manner, and for offering more sustainable products and us to develop short-, medium- and long-term business
services. During the reporting process, you are able to objectives. - Roser Bombard, Manager, Socarrel SSL, Spain
identify a link between the implementation of the reporting (Forestry & Environmental Advisory Services)
process and your strategic development.

1.2 IMPROVE MANAGEMENT SYSTEMS, INTERNAL

PROCESSES AND SET GOALS We have seen and observed that there are many
A key benefit of the reporting process is that it allows your savings possible as well as ways to make ourselves more
company to track progress and highlight areas needing efficient. This was only possible after data collection
improvement, so that you can manage what you measure on energy, material consumption and monitoring
and make changes where necessary. Once your company productivity of our workforce. - Imran Shabbir, Managing
tracks and assesses its performance, you can identify areas Director, Ali Trading Co. Ltd, Pakistan (Sporting Goods
where you could be doing better, e.g. potential productivity Manufacturing)
improvements and cost reductions. Once your company
starts reporting, there will be increased expectations that you
continually improve in relation to your performance goals.

1.3 IDENTIFY STRENGTHS AND WEAKNESSES

The reporting process provides early warning of trouble Sustainability reporting instills commitment to
spots and shows up unexpected opportunities. These monitor those issues more accurately and also to
discoveries can help your companys management to enhance the engagement of stakeholders in order
evaluate potentially damaging developments before they to decrease negative impacts and increase positive
emerge as unwelcome surprises (i.e. risk management), and/ ones. - Jorge Quintas Serrano, Owner/Director, Quintas &
or grab opportunities before your competitors. It is also Quintas, Portugal (Electrical Sector)
possible that during the reporting process you discover that
some issues are not as well managed as you first thought.
This can put at risk the reputation of your company. It is also
common that your company will identify critical issues which
had not been considered before.

1.4 ATTRACT, MOTIVATE AND RETAIN EMPLOYEES

Your companys high performance standards and reputation Reporting within the GRI Framework is about
are intangibles that help to attract and motivate employees. asking questions about the economic, social and
The reporting process shows that your company is not just environmental impacts of your activities and looking
talking about sustainability issues, but is also prepared to for answers together with your staff. This process leads
publicly discuss, measure and act on them. This will increase the to increased employee awareness as well as motivated
trust between your company as an employer and its employees staff and increased productivity rates. - Seyhan Yilmaz,
and so enhance your reputation. In the end, your workforce will Marketing Manager, Topkapi Iplik San. Ve Tic., Turkey
contribute more and stay longer if it is motivated, empowered, (Textile Manufacturing)
and in agreement with strategic objectives.
7 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

2. Value of recognition (external benefits)

2.1 ENHANCE REPUTATION, ACHIEVE TRUST AND
Sustainability reporting has allowed us to demonstrate the
RESPECT
synergies with those who we work with on a daily basis. As such,
Your companys key stakeholders are influenced by the
it has strengthened our role in the local economy of our territory
reputation, respect and trust you have earned. As such, there
and by doing so enhanced our companys reputation. - Rus
are always concerns about how much the reputation of your
Macau Oliva, Managing Director Productes Alimentaris, Spain
company might be damaged by public disclosure on potential
(Gourmet Food Production)
risks or bad news. The natural instinct is for you to avoid such
admissions; however, balanced reporting can create trust and
respect. This means reporting both on what goes well and also
on where there is room for improvement.

2.2 ATTRACTING FUNDING

Providers of financial capital are asking tough questions of Reporting transformed us and differentiated us from the
companies these days. Lending institutions and investors others, made the exporters notice us and we are now seen as
increasingly take into consideration performance in different pioneers. Banks and financial institutions also recognize our
aspects of sustainability issues when evaluating companies, efforts. - Julio Hernandez Flores, Head of Worker Health, Security
e.g. good governance, ethical values, social priorities and and Wellbeing, Soc. Inmobiliaria Campos del Carmen Bajo Ltda,
environmental actions. Non-profit organizations are in a similar Chile (Agricultural Industry)
situation where they are dependent on donors and/or sponsors
to fund their project activities. Implementing a GRI reporting
process can help your company to improve the general
management of sustainability issues and be prepared to talk
openly about your performance. This demonstrates high-quality
performance management which can provide access to funds.

2.3 TRANSPARENCY AND DIALOGUE WITH

STAKEHOLDERS The process of sustainability reporting is a beneficial
The sustainability reporting process is an important tool to initiative, especially in the sense that any stakeholder can see
achieve transparency and disclose sustainability performance and understand what the company is doing with regards to
to your companys stakeholders. As an SME, your stakeholders sustainability and other issues. Stakeholder engagement was
are likely to be clients, suppliers, local community pressure a new and rewarding process and allowed the development of
groups, providers of financial capital, employees and owners. a shared understanding of what sustainability means for Sree
Through the relationships which the reporting process can Santhosh. - Vinoth Kumar, Managing Director, Sree Santhosh,
create between your company and its stakeholders, you India (Textile Garment Manufacturing)
can receive feedback on your business operations, which
will enable you to review processes and identify business
opportunities.

2.4 ACHIEVE COMPETITIVE ADVANTAGE AND LEADERSHIP

Sustainability reporting is still not common practice across all The sustainability report enables us to be transparent about
regions and sectors, especially for SMEs. For this reason, your com- the management and current status of our company with our
pany can be identified as a leader in sustainability. This is especial- clients and customers. This helps us to consolidate our current
client base and also acquire new ones. - Oriol Antnez Llonch,
ly important because an increasing number of larger companies
General Manager, Fomartgeries Montbru SA, Spain (Cheese
screen potential and current suppliers for their economic, social and
Manufacturing)
environmental performance and the impact this may have on their
own supply chain. By being able to show existing and potential
clients your companys commitment to conducting business in a
sustainable manner, you increase your chances of being selected as
a preferred supplier by larger companies.

To conclude, GRIs experience is that SMEs operating in very different contexts can all implement sustainability
reporting not just to do good but also to become better businesses in the process.
So, lets now see how an SME can begin to take its first steps to doing a report using the GRI G4 Guidelines
Section B

GRI reporting
process for SMEs
9 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

GRI reporting process for SMEs

Introduction
1. Prepare
2. Connect
3. Define
4. Monitor
5. Report

Introduction: Model of the reporting process

The GRI sustainability reporting process will help your company to implement the steps for creating a GRI sustainability
report. It also includes proposals for actions that your company can undertake to address its sustainability impacts and the
plans needed to support these actions. GRI divides the reporting process into five phases:

Prepare
Co
t
Repor

nnect

on
M

ne

it o e fi
r D

Lets now look at the five phases and the activities and decisions that need to be taken in each phase. In doing this, we will
assume that your company will use the G4 Guidelines to prepare your sustainability report.
10 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

1. Prepare: Plan your reporting process

The main objective during this phase is to get ready to G4 is available in several languages. You can find an
start the reporting process. overview of this on the GRI website.

Checklist  rganize and hold the first set of meetings with

O
The following is a checklist of the main activities and those directly involved in the reporting process.
decisions for your company at this stage: The objectives for these meetings are the following:
Ensure top management are committed to the
Select the sustainability reporting team that will process.
coordinate the reporting process. Although this may Identify an initial list of sustainability topics
be just one person (in the case of a micro company, that are potentially relevant and that the senior
for example), it is recommended that you have a team decision-makers in your company want to act
of staff members, preferably representing each of the and report on. Think about your companys
departments in your company. business goals and the sustainability context
in which you operate and list the economic,
T he members of the sustainability reporting environmental and social impacts which might
team need to familiarize themselves with the G4 be most important, as a starting point. You can
Guidelines.2 This does not mean that they need to use this list later on to inform your decisions on
know every detail of G4. However, they need to know which stakeholders to engage with and how
how the G4 is structured and where to find relevant (Connect phase) and then to help you identify
information when needed. GRI recommends that all possible relevant topics (Define phase).
you begin by reading the document An Introduction Reach agreement on the action plan for the
to G4: The next generation of sustainability reporting3 reporting process: that is, what activities and
before going into the details of the G4 Guidelines. This decisions need to be taken (by whom), at each
provides a simple overview of the key features and stage of the reporting process. The plan should
elements of the G4 Guidelines. also include budget estimations and staff
resources where necessary. GRI recommends that
Important to know! your company plans for around 10-12 months for
G4 is presented in two separate documents: the full reporting process.
Reporting Principles and Standard Disclosures. GRIs
Reporting Principles are the criteria that should be  ecide if your company will complete a first
D
used to guide your decisions made throughout the report that meets the requirements of the GRI G4
reporting process. They consist of four Principles for Guidelines or only uses G4 for reference.4
Defining Report Content and six Principles for Defining
Report Quality. The Standard Disclosures are the GRI F or your companys report to meet the G4
questions you answer in your report. They consist of requirements, it will need to meet the In
General and Specific Standard Disclosures. Accordance criteria, either Core or Comprehensive.
Choose an In Accordance option that is most
Implementation Manual: This is the how to section, appropriate for your company.5 For SMEs that are
and provides detailed advice and recommendations for first-time reporters, GRI recommends the Core In
reporting with G4. Accordance option.

The G4 Guidelines are also available as an online tool. You  ecide if your company will compile a standalone
D
can access this from the GRI website. It is important that sustainability report or whether the sustainability-
you are familiar with the G4 structure before using the G4 related information will be included within other
online tool. reports (e.g. Annual Report).

2) The GRI G4 Guidelines can be downloaded for free from the GRI website: www.globalreporting.org/reporting/g4/Pages/default.aspx.
3) This is available as a free download from the GRI website: www.globalreporting.org/resourcelibrary/GRI-An-introduction-to-G4.pdf.
4) See G4 Reporting Principles and Standard Disclosures, pp. 13-14.
5) See G4 Reporting Principles and Standard Disclosures, pp. 11-13.
11 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

Decide if your companys report will also

address other (national and/or international)
standards, frameworks and regulations, such as
regulatory reporting requirements on labor or the
environment that your company has to follow.

Important to know!
The G4 Guidelines include references to other widely
recognized frameworks, and are designed as a
consolidated framework for reporting performance
against different codes and norms for sustainability.
These global frameworks include the OECD
Guidelines for Multinational Enterprises, the United
Nations Global Compact Principles, and the UN
Guiding Principles on Business and Human Rights. G4
also includes references to the major international
conventions which often inform national legislation.
For example, the International Labour Organization
(ILO) Conventions for labor regulations.

Hold meetings with your companys staff members

to explain what is going to be done, why this is Reporting our sustainability achievements and
important for your company and what will be challenges represents the opportunity to share and
compare our environmental and social performance with
expected from different departments at different
international practices, and to identify the areas that
stages of the reporting process. This should be
have not yet been included in our sustainability strategy.
the beginning of ongoing communication with
- Carlos Marin Morales, General Director, Alltournative SA de CV,
staff to ensure that there is understanding and
Mexico (Tourism Sector)
commitment across the company throughout the
reporting process.
12 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

2. Connect: Collect input from key stakeholders

The main objective during this phase is to identify who Identify key stakeholders that your company will
your companys key stakeholders are and how you will talk to for feedback on the main sustainability
engage with them. This process is called stakeholder topics and impacts for your company. The initial list
engagement. of potentially relevant topics that your company
identified in the Prepare phase can be useful to
This is important because when deciding what to include inform your decisions on key stakeholders.
in your report, you will have to take into consideration the
points relating to your companys activities which these  onsider how your company will communicate
C
groups and individuals consider most important. with your key stakeholders. When preparing
stakeholder engagement there are two
Important to know! important factors to consider: the objective of
In the GRI Guidelines, stakeholders are defined as entities the consultation (what to ask) and the format of
or individuals that can reasonably be expected to be the consultation (how to ask). The initial list of
significantly affected by the organizations activities, potentially relevant topics that your company
products, and services; and whose actions can reasonably identified in the Prepare phase can be used to
be expected to affect the ability of the organization to inform your decisions on what to ask the key
successfully implement its strategies and achieve its stakeholders. The consultations can take place in
objectives. (G4 Implementation Manual, p. 9) groups or individually. It can be face to face or at
a distance. How to engage stakeholders depends
Checklist on the objective of the consultation, the type of
The following is a checklist of the main activities and stakeholder(s), the nature of your company and
decisions for your company at this stage: also available resources.

 s a start, it is recommended that you make sure you

A T he outcome of your companys stakeholder
understand the Stakeholder Inclusiveness Principle.6 engagement is a list of the sustainability topics
Read the Implementation Manual (pp. 9-10) to that your stakeholders consider important. The
understand the GRI definition of stakeholders and also sustainability reporting team will then need to
what GRI provides as guidance on how to apply this review the list to present recommendations to the
Principle. senior decision-makers of topics to be reported on.

As a company offering sustainability services, it is important

for us to live out our values and lead by example in running
a sustainable business. Reporting gives the company an
opportunity to understand the consequences and implications
of striving to improve our sustainability performance. - Nick
Rockey, Managing Director, Trialogue, South Africa (CSR Advisory
Services)

6) The Stakeholder Inclusiveness Principle is one of the Principles for Defining Report Content.
13 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

3. Define: Decide on your report content

The main objective during this phase is to define The G4 Guidelines set out a process of four steps
the material Aspects (what matters) and Boundaries (Identification, Prioritization, Validation and Review) to
(where it matters) for your companys report. This help you decide on your companys material Aspects
means defining the issues that are really important to and Boundaries. Each of the four steps covers specific
achieve your companys sustainability goals, respond elements of the ways to define what matters and where
to the information needs of your stakeholders and it matters, and employs particular GRI Principles for
manage your impacts on the economy, environment Defining Report Content.
and society. These are issues directly related to your
companys core business strategy. In this way, G4 places Important to know!
the concept of materiality at the heart of sustainability The model for GRIs four step process appears in the G4
reporting. Reporting Principles and Standard Disclosures, p. 90. It
is further explained in detail in the G4 Implementation
The following terms from the above paragraph are Manual, pp. 31-39. This process is Guidance and while it is
very important for understanding the GRI process for recommended by GRI, it is not obligatory to follow for an
deciding on your report content. Therefore, lets look at organization to do a report that is In Accordance with G4.
how each are defined in the G4 Guidelines. However, companies are required to apply the Principles for
Defining Report Content and explain how they have applied
Aspect is the name that GRI gives to sustainability them to define the report content.
subjects covered by the Guidelines (see G4 Reporting
Principles and Standard Disclosures Table 5, p. 44). Checklist
The following is a checklist of the main activities and
Material Aspects are those that reflect the decisions for your company at this stage:
organizations significant economic, environmental
and social impacts; or that substantively influence Identification:
the assessments and decisions of stakeholders (G4 Identify a broad range of sustainability topics which
Reporting Principles and Standard Disclosures, p. 92). may be relevant. Use the Reporting Principles
for Stakeholder Inclusiveness and Sustainability
Boundaries (Aspect Boundary) is the description Context to do this.7
of where impacts occur for each material Aspect. For For each topic which has been identified as relevant,
this, your company should consider impacts within your companys sustainability reporting team will
and outside your company. Boundaries can vary for the need to assess the related impacts, and where those
different Aspects on which your company reports (G4 impacts occur.
Reporting Principles and Standard Disclosures, p. 92). The impacts may occur within your company
but can also occur in organizations outside your
Materiality is explained in G4 as follows: company that you have a relationship with (e.g.
Organizations are faced with a wide range of topics on suppliers, distributors). It may also be that impacts
which they could report. Relevant topics are those that for the same topic occur within and outside your
may reasonably be considered important for reflecting company (e.g. emissions).8
the organizations economic, environmental and social
impacts, or influencing the decisions of stakeholders, Prioritization:
and, therefore, potentially merit inclusion in the report. Narrow the list of relevant topics from the previous
Materiality is the threshold at which Aspects become step down to your companys most important
sufficiently important that they should be reported. topics (material Aspects) and where the main
Beyond this threshold, not all material Aspects are of related impacts occur (Boundaries). The
equal importance and the emphasis within a report Reporting Principles for Stakeholder Inclusiveness
should reflect the relative priority of these material and Materiality should be used in this step.9 Tasks
Aspects. (G4 Implementation Manual, p. 11). for the sustainability reporting team during the

7) These are two of the Reporting Principles for Defining Report Content. See the G4 Implementation Manual, pp. 9-11.
8) See the G4 Implementation Manual, pp. 33-35, for an explanation of this step.
9) These are two of the Reporting Principles for Defining Report Content. See the G4 Implementation Manual, pp. 9-10 and 11-12.
14 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

Tips for the

identification step

Your company could begin the stakeholder engagement by giving stakeholders a list of
the GRI G4 Aspects for them to consider. Table 1 on p. 9 of the G4 Reporting Principles
and Standard Disclosures provides an overview of these. Additionally, your company
should check whether GRI has developed Sector Guidance for your sector. If so, you will
need to look at the GRI Sector Disclosures for other possible relevant topics. Include any
other topics that are specific to your company. This is a good moment for your company
to come back to your initial list of potentially relevant sustainability topics (identified
in the Prepare phase). This way, your company can make sure that it is considering all
possible relevant topics.

Your company should plan its stakeholder engagement to provide a broad range of
possible topics. This means engaging with a broad range of stakeholder groups and
asking for their feedback on a broad range of potential topics. Use methods of dialogue
that allow this (e.g. surveys or questionnaires).

Prioritization step include the following: the Disclosures Management Approach (DMA) and
For each Aspect, assess its importance on a. Indicators that your company would be reporting on
stakeholder assessments and decisions and b. your for each material Aspect. You can read an explanation
companys economic, environmental and social of DMA and Indicators below.
impacts.10 The Aspect can be deemed Material if it is For the Core In Accordance option, you are required
considered significant on both views but it can also to report on a minimum of one Indicator per material
be the case that it is considered Material because it Aspect as well as DMA.
is sufficiently important on one of the views.
Define the reasons (criteria) why an Aspect is Important to know!
material.11 Disclosures on Management Approach (DMA) give your
Decide how much information needs to be disclosed company an opportunity to explain how you are managing
for each material Aspect (coverage). As a general your material economic, environmental or social impacts
rule, those Aspects that have a higher reporting (Aspects). The DMA focus on three things: describing why
priority should get a greater level of coverage.12 an Aspect is material, how its impacts are being managed,
Prepare recommendations for the senior decision- and how the approach to managing this Aspect is being
makers of your company, to include the following: evaluated. See the G4 Implementation Manual for guidance
List of recommended material Aspects and the on how to report on the DMA (pp. 63-65).
Boundaries for each of these Aspects.
Criteria used to draw up the above list. Indicators allow your company to provide comparable
Proposals for how much information should be information on your economic, environmental and social
disclosed for each material Aspect. This includes impacts and performance. G4 contains Indicators for a wide

10) See the G4 Implementation Manual, pp. 36-37.

11) See the G4 Implementation Manual, Figure 6 (p. 37) for an illustration of a matrix of prioritization of Aspects.
12) See an explanation of this in the G4 Implementation Manual, p. 38.
15 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

Tips for the

prioritization step

In the Prioritization step, you may need to get clarification on some of the feedback
given in the Identification step. This could mean the sustainability reporting team
going back to some of your stakeholders to get more in-depth information. That
would involve using dialogue methods that allow a high level of interaction, e.g.
one-to-one or (focus) group meetings.

The tests under the Materiality Principle provide an excellent basis to structure the
discussions and decisions needed in the Prioritization step.

range of sustainability issues. For example, these could The major benefit for us has been integrating a
include water usage, health and safety, human rights process of continuous evaluation that improves our
or an organizations impact on local communities. See day to day management. - Tnia Florit, Managing
the G4 Implementation Manual for guidance on how to Director, Caritas Diocesana de Menorca, Spain (Non-
report on each of the G4 Indicators (pp. 66-235). Profit Sector)

Validation:
It is now time for your companys senior decision-
makers to take a final decision, based on the
recommendations by the sustainability reporting
team. The discussions should take into account the
Completeness Principle and apply its related tests.13
Read the G4 Implementation Manual (pp. 38-39) for an
explanation of this step.

You have now reached the end of the Define phase

and should at this point be able to address all G4
Standard Disclosures that relate to the material Aspects
and Boundaries identified, as well as Stakeholder
Engagement.14

13) This is one of the Reporting Principles for Defining Report Content. See G4 Implementation Manual, pp. 12-13.
14) Standard Disclosures for Identified material Aspects and Boundaries are G4-17 to G4-23 and for Stakeholder Engagement are G4-24 to G4-27.
16 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

4. Monitor: Build your report

The main objective during this phase is to collect and systems and procedures for your company.15 There
analyze the information your company needs in order to are many tools and approaches used by companies
build the content of the sustainability report, as well as to to collect data, from simple Word documents and
manage its sustainability performance. Your sustainability Excel spreadsheets to sophisticated software tools.16
report is not only a means of communication but also You should take into consideration not only the
a tool for change. Remember, once you can measure direct costs of new tools but also the time and money
an issue, you can manage it; and once you can manage involved in training staff to use them effectively.
something, you can change it.
I t is quite possible that your company may identify
Important to know! material Aspects or other topics for which it does
It is important to highlight that a report that identifies risks, not yet have a monitoring system or even a policy.
and outlines the challenges that the company faces as well If this is the case, you must decide what information
as the steps it needs to take to address them, is entirely you cannot disclose and explain this in the report. G4
consistent with the goals of G4. This will promote the change allows for reasons for omission in exceptional cases.
that is most relevant for your company and its stakeholders. These are explained in the G4 Reporting Principles and
Standard Disclosures (p. 13).
Checklist
The following is a checklist of the main activities and Decide if your company will establish and report
decisions for your company at this stage: on SMART17 targets and if so, what these will be.
Targets can be about your companys performance
Check if you have the internal systems in place to on its material Aspects. They can also be to improve
gather the necessary information or can have them (or introduce new) procedures and systems. It is
in place in time to properly monitor and report. If you important to establish SMART targets to develop
have identified that there are significant impacts for an idea during the reporting process what the next
material Aspects in entities outside your company, steps are.
you will also need to consider how you will get that
information. E stablish procedures to make sure that your company
is systematically checking progress on both the
Apply the Principles for Defining Report Quality when sustainability performance of your material Aspects
making decisions on the appropriate data-gathering and how effective your monitoring systems are.

The basic data of sustainability reporting is valuable. Our

factory is far from reaching the target of true sustainability, but
through systematic data collection and analysis, making data
available to relevant staff, especially middle management, it
gives them a comprehensive understanding of the operational
process of our factory. - Hugo Liu, Assistant to the Managing
Director, Shunde Hengfa, China (Apparel and Footwear)

15) The Reporting Principles of Comparability, Reliability and Accuracy are especially relevant when assessing data-gathering systems and procedures (see G4 Implementation
Manual, pp. 13-16).
16) See the GRI website for a list of the current GRI Certified Software Tools: www.globalreporting.org/reporting/reporting-support/certified-software-and-tools/Pages/
default.aspx.
17) SMART is Specific, Measurable, Achievable, Relevant, Time Bound.
17 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

5. Report: Check and communicate

The main objective in this phase is to complete the  as your company decided to have the report
H
sustainability report, which is then publicly launched. externally assured?18 If so, make sure that it is clearly
indicated which Standard Disclosures have been
Checklist externally assured (and which not) in the external
The following is a checklist of the main activities and assurance column in the context index.19 Also, ensure
decisions for your company at this stage: you have all the necessary information to address the
Standard Disclosure on Assurance (G4-33).
Compile the necessary information for each of the data
points that are needed to address the G4 Standard  ecide how the report will be presented. This
D
Disclosures. includes how to present the full report and also
specific information from the report that is needed
 ake sure your report gives a complete picture but also
M by particular stakeholder groups. This involves having
uses concise text. Make sure that there are clear and a clear idea of who your report readers are, what
agreed deadline dates for feedback and the final sign off. information each will be most interested in, and
whether the report (or parts of it) will need to be
Complete a Content Index using the GRI Content translated for specific stakeholder groups.
Index tool that is provided on the GRI website. Each
In Accordance option has its own Content Index.  hen you have a final version of your report, you can
W
These are explained in the G4 Reporting Principles and request GRI to perform a check of the report. Currently,
Standard Disclosures (Core pp. 31-32, Comprehensive GRI offers a check service for G4 reports called
pp. 33-35). Materiality Matters. The check focuses on the General

Tips for compiling information

and writing your report:
The Guidance that is provided in the G4 that you need help with, the GRI Sustainability
Implementation Manual will help you to check Disclosure Database offers a collection of reports
that you have included the necessary information that you can check.
to address the requirements of each Standard
Disclosure. These appear for General Standard If you have a technical question about reporting
Disclosures (pp. 23-61) and for Specific Standard with G4, you may find the answer in the G4 FAQs
Disclosures (pp. 62-231). available on the GRI website. Alternatively, you can
email guidelines@globalreporting.org.
Ensure that you are applying the G4 Reporting
Principles for Defining Quality by using the tests It is very important that the sustainability
under each of the Principles. The Reporting reporting team invests time in discussing the
Principles of Clarity, Timeliness and Balance are layout and presentation of the report content,
especially relevant to use when writing your report what illustrations it will contain, what are the key
(see G4 Implementation Manual, pp. 13-16). themes and the writing style. It is likely that there
will be different ideas on these so it is important
If you would like to see how other organizations that agreement is reached early in the report
have reported on particular Standard Disclosures writing process.

18) See the G4 Implementation Manual, p. 51, for an explanation of how GRI uses the term external assurance.
19) Note: If your company has not had the report externally assured, you are still expected to complete the external assurance column. In such a case, you would put No for
each Standard Disclosure.
18 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

Standard Disclosures G4-17 to G4-27 and checks visibility to your report. This can be done through the
whether they are clearly located in the final report.20 GRI website.

Finally, your company is ready to publish the report.  rganize a formal launch and celebration to recognize
O
This can be done on your companys website, the hard work of all those involved in the reporting
through a printed publication and/or through a process.
communication to all stakeholders that have been
involved in the process.  ather external and internal feedback on lessons
G
learnt during the process. This is the first step in
GRI encourages your company to register your report preparing for the next reporting period. This is the
with GRI free of charge so that it will appear in the appropriate moment to come back to Step 4: Review
GRI Sustainability Disclosure Database. This will help from the steps for defining material Aspects and
to map GRI reporting around the world and also give Boundaries.21

The value of the reporting process was not only in the publication of the report itself, but
rather within the many lessons we learned while pulling the information together. Mostly,
we learned that we actually possessed information, statistics and ideas that could support
our assumptions about how good a company we were, as well as how we can potentially
improve in the future. Although time consuming, the process taught us a great deal and
was extremely rewarding. - William Hughes, Managing Director, Impahla Clothing, South
Africa (Apparel and Footwear)

Tips: A final checklist for your G4 report

Check that you have included the following in your G4 report:

I nformation on the chosen In Accordance option that is right for your company, and met
the requirements.

E xplanation of how you have defined your companys material Aspects, based on impacts
and the expectations of stakeholders.

Indication of where impacts occur (Boundaries).

Description of your companys approach to managing each of its material Aspects (DMA).

Indicators for each material Aspect according to the chosen In Accordance option.

GRI Content Index helps your stakeholders find relevant content.

20) You can find out more information on this check on the GRI website, www.globalreporting.org/reporting/report-services/Pages/Materiality-Matters.aspx, or write to
reportservices@globalreporting.org.
21) See the G4 Implementation Manual, p. 39.
19 | READY TO REPORT? INTRODUCING SUSTAINABILITY REPORTING FOR SMEs

Further reading
Finally and resources
The objective of this booklet has been to provide a simple GRI provides a wide range of free resources on its
introduction to sustainability reporting using the GRI G4 website to help you take your first steps into the world of
Guidelines so that your company can take the first steps in sustainability reporting.
its sustainability reporting journey. This has been done by: G4 Guidelines
Making the case for sustainability reporting for Translations of G4 in different languages
SMEs. G4 Sector Disclosures
Introduciing five easy steps to a sustainability report G4 Online
using the G4 Guidelines. Frequently Asked Questions about G4
Linkage documents: G4 and other important global
Keeping these in mind, GRI is optimistic that your frameworks
company now feels READY TO REPORT! G4 Content Index tool
Learning and research publications
GRI Certified Training Courses
GRI Certified Software and Tools

Acknowledgements
The Global Reporting Initiative (GRI) would like to thank the State Secretariat for Economic Affairs (SECO), whose financial
support made this booklet possible.

GRI would like to thank the following people for their

valuable inputs during the publication development
process:
Ai Nguyen, Jia Hsin Co.
Seakle Godschalk, ESS

From GRI
Alyson Slater, Andrea Pradilla, Anne Beutling, Bastian
Buck, Bianca Podeanu, Brian Jones, Christine Koblun,
Douglas Kativu, Elena Perez, Elina Sviklina, Juliette
Gaussem, Katja Kriege, Laura Espinach, Mara Grosso, Rania
Dalalaki, Shivani Rajpal, Stefan Petrutiu, Tom Perryman.
GLOBAL REPORTING INITIATIVE
PO Box 10039
1001 EA Amsterdam
The Netherlands
Telephone: +31(0) 20 531 00 00
Facsimile: +31(0) 20 531 00 31

www.globalreporting.org