Using Sector Supplements and the G3 Guidelines

What are the implications of the G3 on Sector Supplements?

When Sector Supplements are developed, they take the GRI Sustainability Reporting Guidelines as their point of departure. Therefore, the release of the G3 Guidelines does have some implications for Sector Supplements developed prior to the G3’s release and against the 2002 version of the Guidelines.

Users may encounter some minor redundancies and inconsistencies when using pre-G3 Sector Supplements with the G3 Guidelines. However, detailed assessments have shown that these should not be significant impediments to effectively using the Sector Supplements with the G3.

Through the normal piloting process scheduled for all Sector Supplements, the GRI will ensure that all Sector Supplements are adjusted to be fully compatible for use with the G3 Guidelines over time.

What is the relationship between Sector Supplmenets and the Guidelines? 

The GRI Guidelines provide universally applicable reporting guidance. However, some sectors have unique, detailed reporting needs and thus require additional specialized guidance in addition to that contained in the Guidelines. Sector Supplements fill this role.

Sector Supplements are part of the Reporting Framework. They are designed to complement the Guidelines, and should be used in addition to, not in place of, the Guidelines.

Which Sector Supplements were developed for use in conjunction with the 2002 version of the GRI Guidelines? (So-called “pre-G3 Sector Supplements”)

The following Supplements were developed between 2001 - 2005, prior to the release of the G3 Guidelines (2006). These were therefore designed for use with the 2002 version of the Guidelines:

·         Automotive                                         

·         Financial Services

·         Logistics and Transportation

·         Mining and Metals

·         Public Agencies

·         Telecommunications

·         Tour Operators

You can still use these Sector Supplements with the G3.

The following Supplements were released in 2007, after the G3 Guidelines were released. These are therefore designed for use with the G3 Guidelines:

·         Apparel and Footwear (forthcoming)

·         Energy Utilities (forthcoming)

Yes, but only over time and as a part of the normal piloting and finalization process that all Sector Supplements undergo (see FAQ on the piloting process).

Before the G3 Guidelines were released, the GRI Secretariat conducted an assessment of the fit between pre-G3 Supplements and the G3 Guidelines and found that although there are some discrepancies and minor gaps, sector-specific indicators and guidance are indeed still relevant and applicable for use with the G3 Guidelines. Based on this conclusion, no special process will occur in the short term to revise the Supplements specifically for use with the G3. This revision will instead occur during a dedicated pilot process for each Supplement, where other content adjustments to the Supplement based on users’ experience and needs also occur.

What is the normal piloting and finalization process for Sector Supplements? 

At present, all the Sector Supplements are currently PILOT versions and need to undergo a piloting process before they can be released as FINAL versions. (The Financial Services Sector Supplement and the Public Agency Sector Supplement are currently being piloted). This maturation process is a longstanding, core element of the Reporting Framework development due process.

The general process for Supplement development is as follows:

·         Initial development: A multi-stakeholder working group develops indicators and guidance for a new Supplement. The wider public is invited to submit their comments at the appropriate time, and the Technical Advisory Committee (TAC) reviews each new Supplement before it is released as a PILOT version.

·         Pilot phase: The PILOT version of the Sector Supplement is tested by reporting organizations through their reporting process (possibly over a few reporting cycles). After a sufficient number of reporting organizations have actually applied the Supplement, the Sector Supplement will be reviewed by a multi-stakeholder group to improve the content based on its practical application and user needs.

This group will include participants from the initial Supplement development process as well as others, and this group will make the necessary adjustments to the Indicators and guidance in the Supplement. For pre-G3 Supplements, this is also the time that changes will be made so that the Supplement fits seamlessly with the G3 Guidelines.

·         Final release: Upon completion, the working group submits the adjusted Supplement to the TAC, along with a recommendation that the Supplement be released as a FINAL version.  Once determined to be ready for release by the TAC, the Supplement will then be reviewed by the GRI Board of Directors for release as a FINAL version.

GRI will launch a series of piloting processes in 2007-2008 for pre-G3 Supplements. During the piloting processes, the content of the Sector Supplements will be adjusted to ensure it is fully compatible with the G3 Guidelines, and Indicator Protocols will also be developed for all Sector Supplement Indicators.

Yes, for three reasons.

First, Sector Supplements focus on providing additional guidance on key sectoral sustainability issues not captured in the Guidelines for a given sector.

Second, although the G3 version of the Guidelines contains additions and modifications compared to their predecessor the 2002 version, no sector-specific themes have been introduced. Therefore, changes to the Guidelines have limited impact on the applicability of the sector-specific Indicators contained in Sector Supplements.

Third, for most Sector Supplements, the changes to the Guidelines have not substantively altered the relevance of the Sector Supplement indicators and comments.

Performance Indicators: Sector Supplements typically contain Performance Indicators specifically designed for the sector (not found in the Guidelines), and also comments on indicators found in the Guidelines. These comments help organizations in the sector to interpret the Indicator in context of the sector’s sustainability impacts and reporting needs.

Since some indicators from the 2002 Guidelines were removed, added, or adjusted for the G3 Guidelines, the overall fit of the pre-G3 Supplements may be implicated in the following ways:

·         If a Supplement contained commentary on a 2002 Guidelines Indicator, and that Indicator was significantly altered in the G3 version, the sectoral commentary may no longer apply. If the Indicator was removed from the Guidelines, the piloting group will determine whether or not to attach the commentary to another Indicator in the G3 Guidelines or to develop a new Indicator for the Sector Supplement.

·         Changes in Indicators from the 2002 to the G3 version of the Guidelines may result in making some of the commentaries or sector-specific Indicators redundant. In such cases, the piloting group will assess if any further sector specification would be necessary.

·         Disclosure on Management Approach: A significant change from the 2002 Guidelines to the G3 Guidelines is the separation of disclosures on management approach from results-oriented performance indicators. Pre-G3 Sector Supplement indicators seek disclosure on items that change over time (e.g., actions, performance) as well as items that do not change over time (e.g., policy, management) – this style is not consistent with the G3. Some of the pre-G3 Sector Supplement Indicators are “hybrid” and seek both management disclosures and Performance Indicators in one Indicator. These inconsistencies will be addressed during the piloting process for each Supplement so that the final set of disclosures and Indicators are consistent with the general G3 format.

Most practitioners will find that their application of reasonable professional judgment will be sufficient to bridge any gaps or redundancies that they may encounter.

If it is discovered that the Supplement contains a sector-specific management oriented indicator, this can easily form part of the organization’s response to the G3 Guidelines Disclosure on Management Approach for the relevant topic. If the situation allows, the response should be integrated. If not, reporting organizations should respond to sector-specific management disclosures in the most appropriate section in their report. It should, however, still be cited according to its number in the content index.

Commentaries on disclosure items in the G2 “Vision and Strategy” “Profile”, and “Governance Structure and Management Systems” sections still largely apply to the G3 disclosure items in the “Strategy and Profile” section, and practitioners can check the individual items to see if they still apply (some of them could be reported under relevant DMA sections). 

A useful tool to interpret commentaries on pre-G3 Supplement indicators is the Indicator Changes. In using this tool, you should be able to assess the original intention of an indicator and then assess how commentary should apply to G3.

What is the relationship between Sector Supplements and the G3 Application Level system?  

The criteria for Level A/A+ states that where a relevant Sector Supplement is available in its FINAL version, all Supplement Indicators are considered “core” and must be responded to with due regard to materiality principle  (i.e., provide data or an explanation for why it was not reported).

Therefore, the use of PILOT versions of Sector Supplements with the G3 Guidelines will not influence the criteria for assessing Application Levels. Note that 2002 Guidelines “In Accordance” criteria did not reference Sector Supplements.

As of May 2007, no Sector Supplements were available in FINAL versions; all are PILOTS only.

How can I get involved in a Supplement for my sector? 

For questions or to indicate interest in taking part in new supplement development, or piloting processes, please contact the GRI Secretariat.