Guía GRI G4 EU Directiva Información No Financiera

8/9/2019 Gua GRI G4 EU Directiva Informacin No Financiera

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MAKING HEADWAY IN EUROPELINKING GRIS G4 GUIDELINES AND THEEUROPEAN DIRECTIVE ON NON FINANCIALAND DIVERSITY DISCLOSURE


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Linking G4 and the European Directive on non-nancial anddiversity disclosure

This linkage document shows the Disclosures from the GlobalReporting Initiative (GRI)s G4 Guidelines that can be used tocomply with the European Directive on non-nancial anddiversity information disclosure by certain large undertakingsand groups.

The Directive came into force in December 2014. To improvethe disclosure of non-nancial information, it stipulates thatcertain large undertakings 1 should prepare a non-nancialstatement with information on environmental, social,employee-related, anti-corruption and bribery matters, respectfor human rights, and diversity.

The Directives mandate to disclose sustainability information

is intended to lead to the identication of impacts and risks,and to increase the trust of investors and consumers in public-interest entities.

Measure, monitor and manageIn the words of the Directive, The disclosure of non-nancialinformation is vital for managing change towards a sustainableglobal economy by combining long-term protability withsocial justice and environmental protection. 2 In this context,disclosing non-nancial information helps undertakings tomeasure, monitor and manage their performance and theirimpact on society.

The European Commission will publish non-bindingguidelines for reporting non-nancial information by theend of 2016. But the Directive already recommends thatundertakings use internationally-recognized frameworksand standards to prepare and publish their responses. TheG4 Guidelines, which include all aspects covered by theDirective, will be a fundamental tool for companies duringthe implementation.

Pioneers of sustainability reportingGRI is a non-prot organization that works in the public interesttowards a vision of a sustainable global economy. GRI pioneeredsustainability reporting; released in 2013, G4 is the fourthgeneration of its renowned sustainability reporting framework.At the time of writing, more than 5,000 organizations acrossmore than 90 countries have used the GRI Guidelines for theirsustainability reporting, and 25 countries or regions havereferred, mentioned, or recommended the Guidelines in theirpolicies, regulations, or other instruments.

G4 is fully aligned with the requirements of the Directive Its Disclosures cover all of the Directives aspects. GRI developsits framework via the use of expert working groups with amulti-stakeholder and multi-constituency composition.

G4 is highly adaptableIt was designed as a consolidated framework for reportingperformance against different codes and norms forsustainability. This includes sharing links with other importantglobal frameworks which have also greatly inuenced, and arerecommended by, the Directive; including the OECD Guidelinesfor Multinational Enterprises , the Ten Principles of the UN GlobalCompact , the International Labour Organisations TripartiteDeclaration of principles concerning multinational enterprisesand social policy , and the UN Guiding Principles on Business andHuman Rights .

While G4 can be used for standalone sustainabilityreporting, it is compatible with a range of different

reporting formats. The Directive mandates the disclosure of non-nancialinformation in differing statements and/or reports, dependingon the undertaking in question; these may include nancialstatements, management reports, and corporate governancestatements. In all cases, G4s Disclosures enable the robustmeasurement and clear communication of the necessaryinformation. G4 also offers a widely-recognized globalstandard for sustainability information to be included inintegrated reports.

The signicance of materiality

In introducing this document, it is worth highlighting someespecially signicant links between the European Directiveand G4.

The rst is the concept of materiality. The Directive requiresundertakings to provide adequate information in relation tomatters that stand out as being most likely to bring about thematerialization of principal risks of severe impacts, along withthose that have already materialized.

G4 places the concept of materiality at the heart ofsustainability reporting This means encouraging reporting organizations to onlyprovide information on the issues that are really critical inorder to achieve the organizations goals for sustainability andmanage its impact on the environment and society.

Materiality is the threshold at which the sustainability subjectscovered in G4 known as Aspects become important orrelevant enough to be reported. G4-based reports shouldcover Aspects that reect the organizations signicanteconomic, environmental and social impacts; or substantivelyinuence the assessments and decisions of stakeholders.Key stakeholders have a vital role to play in informing anorganizations materiality assessment. Taking their views into

1) Art. 3 of the 2013 Accounting Directive denes large companies as those having an average number of employees in excess of 500, and Art. 2 denes public-interest entitiesas: listed companies, credit institutions, insurance under takings, and others dened by Member States as public-interest entities.

2) Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014
https://g4.globalreporting.org/Pages/default.aspxhttp://www.oecd.org/daf/inv/mne/oecdguidelinesformultinationalenterprises.htmhttp://www.oecd.org/daf/inv/mne/oecdguidelinesformultinationalenterprises.htmhttp://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdfhttp://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdfhttp://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---multi/documents/publication/wcms_094386.pdfhttp://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---multi/documents/publication/wcms_094386.pdfhttp://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---multi/documents/publication/wcms_094386.pdfhttp://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdfhttp://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdfhttp://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0095&qid=1421170320518&from=ENhttp://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0095&qid=1421170320518&from=ENhttp://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdfhttp://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdfhttp://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---multi/documents/publication/wcms_094386.pdfhttp://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---multi/documents/publication/wcms_094386.pdfhttp://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---multi/documents/publication/wcms_094386.pdfhttp://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdfhttp://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdfhttp://www.oecd.org/daf/inv/mne/oecdguidelinesformultinationalenterprises.htmhttp://www.oecd.org/daf/inv/mne/oecdguidelinesformultinationalenterprises.htmhttps://g4.globalreporting.org/Pages/default.aspx


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account is crucial in developing a proper understanding of anorganizations sustainability impacts, and how they relate to itsbusiness model and strategy.

Direct and indirect impactsAnother important shared theme and a burgeoning focusarea of CSR is the supply chain. According to the Directive,once the materiality of a sustainability subject has beenestablished by an awareness of its actual or potential impact,The severity of such impacts should be judged by their scaleand gravity. The risks of adverse impact may stem from theundertakings own activities or may be linked to its operations,and, where relevant and proportionate, its products,services and business relationships, including its supply andsubcontracting chains.

Further, the Directive calls for statements and reports toalso include information on the due diligence processesimplemented by the undertaking, also regarding, where

relevant and proportionate, its supply and subcontractingchains, in order to identify, prevent and mitigate existing andpotential adverse impacts.

G4 places a strong emphasis on due diligence processesand the supply chainG4 encourages organizations to consider more than just theirdirect activities. Extending the materiality assessment toinclude the supply chain helps organizations to understandwhere their biggest impacts occur, regardless of whetherthose impacts are within their direct control. In recent years,this conceptual change has been heavily inuenced by the

UN Guiding Principles on Business and Human Rights. Theresulting focus of the Directive and of G4 aims to ensurethat the outsourcing of production does not permit theoutsourcing of responsibility.

The Directive is careful to encourage further improvements tothe transparency of undertakings non-nancial information,which is by its nature a continuous endeavour. CSR andsustainability the combining of long-term protability withsocial justice and environmental care are also long-termendeavours, and will become increasingly well-formulated andwidely engaged .

GRIs G4 Guidelines and Reporting Process are designed to beembedded within the heart of an organizations operationsand business strategy. Use of the Guidelines for tokenism or asa tick box exercise is not likely to serve the ultimate purpose ofthe Directive, namely fostering sustainable growth.

Using G4 Disclosures to comply with theEuropean Directive There are seven elements to the disclosures stipulated in theDirective:

1. General Disclosures (required by Article 19). These three

disclosures cover the undertakings business model; itsexplanation for not having a relevant sustainability policy orfor not disclosing certain information; and its use of externalassurance.

2. Diversity (required by Article 20). This disclosure request isfor a description of the undertakings diversity policy in relationto its administrative, management and supervisory bodies. Inthe words of the Directive, such disclosure facilitates a goodunderstanding of the business organisation and affairs of theundertaking concerned. It enables members of those bodiesto constructively challenge the management decisions andto be more open to innovative ideas [] It contributes thusto effective oversight of the management and to successfulgovernance of the undertaking. It is therefore important toenhance transparency regarding the diversity policy applied.

If the undertaking does not have a relevant diversity policy, itshould explain why.

Disclosures on sustainability matters (required by Article 19,and in the Directives Recital):

3. Environmental matters

4. Social matters

5. Employee matters

6. Human Rights matters

7. Anti-corruption and bribery matters

For each of these ve sustainability matters, the requireddisclosures take the same, two-part form:

a) Clauses of Article 19 request the same points of disclosurefor each sustainability matter:

a description of the policy pursued by the undertakingin relation to those matters, including due diligenceprocesses implemented;

the outcome of those policies; the principal risks related to those matters linked to the

undertakings operations including, where relevant andproportionate, its business relationships, products orservices which are likely to cause adverse impacts in thoseareas, and how the undertaking manages those risks;

non-nancial key performance indicators relevant to theparticular business.

It should be noted that included in the disclosure of these fourpoints should be information on the due diligence processesimplemented by the undertaking, also regarding, whererelevant and proportionate, its supply and subcontractingchains, in order to identify, prevent and mitigate existing andpotential adverse impacts. That is, consideration of the supplychain or value chain is required not just a focus on theundertakings direct ownership or control.

b) Specications from the Directives Recital request more

specic, detailed disclosures about each sustainability matter.


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Using G4Using G4 to comply with to the European Directive isstraightforward. In almost all cases 3, the same four types of G4Disclosures are used: (1) Disclosures on Strategy and Analysis,(2) Organizational Prole, (3) Disclosures on ManagementApproach (DMA) and (4) Indicators. Often, it is G4s Indicatorsthat undertakings will use to respond to disclosure requests onkey performance indicators.

An additional level of detail in G4 is that the ve sustainabilitymatters are covered by the terms Category and Aspect. Thefour types of G4 Disclosures above apply to the various GRICategories and Aspects.

A Category is a broad sustainability subject matter (e.g., theenvironment, society) while an Aspect is a more detailedsubject matter that falls under a Category (e.g., the Aspect ofWater, which falls under the Environmental Category).

A closer look at the General DisclosuresUsing G4 to comply with the Directives General Disclosureswill give a clear, at-a-glance understanding of the nature ofyour undertaking and its existing consideration of CSR andsustainability.

The General Disclosures also cover two areas where thereis strong compatibility between the requirements of theDirective and G4: exemptions/omissions, and externalverication of the disclosed information.

Both the Directive and G4 acknowledge circumstances inwhich it may not be possible to disclose certain information. The Directive gives governments the option to allowcompanies not to disclose information related to impendingdevelopments, or matters under negotiation. Such informationcan be omitted in exceptional cases and under specicconditions. Furthermore, a report or explain approachcan be adopted when the undertaking has no policies onsustainability matters: the company can explain why.

G4 similarly recognizes that in exceptional cases it may notbe possible to disclose certain information. In those cases, thereport should clearly identify the information that has beenomitted; and G4 offers a prepared list of reasons for omissionwhich the undertaking can select from.

The Directive and G4 also maintain exibility regarding theuse of external assurance. The Directive allows MembersStates to decide whether independent assurance of the

disclosed information should be a requirement. As forGRI, external assurance is not required for a report to bein accordance with G4. But GRI does stress its desirability;assurance has the potential to greatly enhance the credibilityof sustainability disclosures.

The linkage tables The tables below present the G4 Disclosures that can beused to gather information, and formulate responses, to eachelement of the European Directive.

EU DIRECTIVE G4 GUIDELINES

GENERAL STATEMENTS

Art. 19a (1)(a) a brief description of the undertakings businessmodel;

G4-Disclosures on Strategy and Analysis and OrganizationalProle

Art. 19a (1): Where the undertaking does not pursue policiesin relation to one or more of those matters, the non-nancialstatement shall provide a clear and reasoned explanation fornot doing so.

Reasons for omission

Art. 19a (5) Member States shall ensure that the statutoryauditor or audit rm checks whether the non-nancialstatement referred to in paragraph 1 or the separate reportreferred to in paragraph 4 has been provided; (6): MemberStates may require that the information in the non-nancialstatement referred to in paragraph 1 or in the separate reportreferred to in paragraph 4 be veried by an independentassurance services provider. Also Art. 20(b).

G4-Disclosures on External Assurance

Art. 20 (1)(g): a description of the diversity policy applied inrelation to the undertakings administrative, management andsupervisory bodies with regard to aspects such as, for instance,age, gender, and educational and professional backgrounds,

the objectives of that diversity policy, how it has beenimplemented and the results of its implementation in thereporting period. If no such policy is applied, the statementshall contain an explanation as to why this is the case.

G4-38, G4-40, G4-Disclosures on Employment (Indicator G4-LA1 and DMA) and Diversity and Equal Opportunity (IndicatorG4-LA12 and DMA), and Reasons for omission

3) The only exceptions are for the disclosures that cover reasons for omission and external assurance.


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MATTERS

Environmental Art. 19a (1)(a-e)

(a) a brief description of the undertakings businessmodel;

G4-Disclosures on Strategy and Analysis andOrganizational Prole

(b) a description of the policy pursued by theundertaking in relation to those matters, includingdue diligence processes implemented;

G4-Disclosures on Management Approach forenvironmental Aspects (b)

(c) the outcome of those policies; G4-Disclosures on Management Approach forenvironmental Aspects (c)

(d) the principal risks related to those matters

linked to the undertakings operations including,where relevant and proportionate, its businessrelationships, products or services which are likely tocause adverse impacts in those areas, and how theundertaking manages those risks;

G4-2 (contextualized by G4-Disclosures on

Management Approach (a, b, c))

(e) non-nancial key performance indicators relevantto the particular business.

G4 Indicators for environmental Aspects

Further specications in Recital

(7) use of renewable and/or non-renewable energy G4-Disclosures on Aspects Energy (Indicators and

DMA)

(7) greenhouse gas emissions G4-Disclosures on Aspects Emissions and Energy(Indicators G4-15 to G4-19, G4-EN3-G4-EN7, andDMAs)

(7) water use G4-Disclosures on Aspects Water (Indicators andDMA)

(7) air pollution G4-Disclosures on Aspects Emissions (Indicators G4-20 to G4-21 and DMA)

(17) land use G4-Disclosures on Aspects Biodiversity (Indicatorsand DMA)

(17) use of materials G4-Disclosures on Aspects Materials (Indicators andDMA)


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MATTERS

Social Art. 19a (1)(a-e)




G4-Disclosures on Management Approach for societyAspects (b)

(c) the outcome of those policies; G4-Disclosures on Management Approach for societyAspects (c)

(d) the principal risks related to those matterslinked to the undertakings operations including,where relevant and proportionate, its businessrelationships, products or services which are likely tocause adverse impacts in those areas, and how theundertaking manages those risks;

G4-2 (contextualized by G4-Disclosures onManagement Approach (a, b, c))

(e)non-nancial key performance indicators relevantto the particular business.

G4 Indicators for the different Aspects under theSociety category


(7) dialogue with local communities G4-Disclosures on Aspects Local Communities(Indicator SO1 and DMA)

(7) actions taken to ensure the protection and thedevelopment of those communities

G4-Disclosures on Aspects Local Communities(Indicators and DMA)


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MATTERS

Employees Art. 19a (1)(a-e)




G4-Disclosures on Management Approach for laborpractices and decent work Aspects (b)

(c) the outcome of those policies; G4-Disclosures on Management Approach for laborpractices and decent work Aspects (c)




G4 Indicators for the different Aspects under Laborpractices and decent work category


(7) actions taken to ensure gender equality G4-Disclosures on Aspects Non-Discrimination andDiversity and Equal Opportunity (Indicators and

DMA)

(7) implementation of fundamental conventions ofthe International Labour Organisation

References to the ILO conventions are specicallymentioned (page 64), further: G4-Disclosures forthe different Aspects under the Labor Practices andDecent Work category

(7) working conditions G4-Disclosures for the different Aspects under theLabor Practices and Decent Work category

(7) social dialogue G4-Disclosures for the different Aspects under the

Labor Practices and Decent Work category

(7) respect for the right of workers to be informedand consulted

G4-Disclosures on Aspect Labor Practices GrievanceMechanisms and Labor/Management Relationsand Training and Education (Indicators and DMAs),Stakeholder Inclusiveness Principle

(7) respect for trade union rights G4-Disclosures on Aspect Freedom of Associationand Collective Bargaining (Indicator HR4 and DMA)

(7) health and safety at work G4-Disclosures on Aspect Occupational Health andSafety (Indicators and DMA)


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MATTERS

employees(cont.)

Further specications in Recital (cont.)

(18) Diversity of competences and views of themembers of administrative, management andsupervisory bodies (19) for instance age, gender andeducational and professional backgrounds

G4-Disclosures on Aspects Non-Discriminationand Diversity and Equal Opportunity (Indicatorsand DMA) and G4-Disclosures on The governancestructure and its composition in the Governancesection

(18) more diversied boards G4-Disclosures on The governance structure and itscomposition in the Governance section

Human rights Art. 19a (1)(a-e)




G4-Disclosures on Management Approach for humanrights Aspects (b)

(c) the outcome of those policies; G4-Disclosures on Management Approach for humanrights Aspects (c)

(d) the principal risks related to those matterslinked to the undertakings operations including,where relevant and proportionate, its business

relationships, products or services which are likely tocause adverse impacts in those areas, and how theundertaking manages those risks;



G4 Indicators for the different Aspects in the HumanRights category


(7) prevention of human rights abuses G4-Disclosures for the different Aspects under theHuman Rights category


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MATTERS

Anti-corruptionand bribery

Art. 19a (1)(a-e)




G4-Disclosures on Management Approach for theAspects Anti-Corruption and Public Policy (b)

(c) the outcome of those policies; G4-Disclosures on Management Approach for theAspects Anti-Corruption and Public Policy (c)




G4 Indicators for the Aspects Anti-Corruption andPublic Policy


(7) instruments in place to ght corruption andbribery

G4-Disclosures for the Aspects Anti-Corruption andPublic Policy (Indicators and DMA)


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GLOBAL REPORTING INITIATIVEBarbara Strozzilaan 336

1083 HN Amsterdam The Netherlands

Telephone: +31(0) 20 531 00 00E-mail: [email protected]

www.globalreporting.org
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