Sustainability Reporting Guide

Added information about the GRI G4 reporting guidelines. May 23, 2014.

Sustainability Reporting at a Glance

Sustainability reports are designed to communicate an organization’s performance on environmental and social issues to investors, employees, customers, the media and other stakeholders.

Sustainability reports – also called corporate citizenship reports, corporate social responsibility (CSR) reports, and a myriad of other names – usually communicate data on a variety of environmental measures, often including energy and water consumption, energy efficiency, greenhouse gas and other air pollutant emissions, waste output and recycling levels. They also usually include metrics showing a companies’ performance against previously set goals, as well as future goals that the company aims to meet.

In this report we will focus on the environmental aspects of sustainability reporting.

Verification, Assurance, and Related Organizations

There are numerous options available to companies wanting to demonstrate that they have followed best-practice guidelines for reporting, and to verify the contents of their reports. Each plays a slightly different role.

Global Reporting Initiative (GRI)[1]

The GRI, born of a collaboration between Ceres (see below) and the United Nations Environment Program (UNEP), is the force behind the most widely used sustainability reporting framework. There have been several updates, with the most recent version being G4, which the GRI released in May 2013. Corporate sponsors who advised the GRI on development of G4 included Alcoa, Enel, GE, Goldman Sachs, Natura, Shell, Deloitte, Ernst & Young, KPMG and PwC.

The GRI says that reports published after December 31, 2015 should be prepared in according with G4. Up until then, GRI advises:

Reporting organizations using the G3 or G3.1 Guidelines will want to decide for themselves when to transition to the G4 Guidelines. For this reason, GRI will continue to recognize reports based on the G3 and G3.1 Guidelines for up to two full reporting cycles…

GRI recommends that first time reporting organizations use the G4 Guidelines, even if they do not fulfill the requirements of the ‘in accordance’ options in the first reporting cycle.


This version uses a system of Application Levels (A, B and C) to assess the extent to which companies have applied the reporting framework. The levels do not judge the sustainability performance of the reporting organization or the quality of the report. Companies can either self-declare their application level, submit it to GRI for a “level-check”, or have it checked by a third-party provider, although the GRI says it does not endorse these third parties (see Q&A).


Released in May 2013, the G4 guidelines are the first significant GRI update in seven years. The framework is comprised of two parts:

The GRI has also launched 10 G4 Sector Disclosures, intended to help specific industries prepare sustainability reports.

Click below for the documents:

GRI also offers G4 Online, a free web-based tool designed to support users directly involved in a G4-based reporting process. G4 Online is aimed at users who have already familiarized themselves with the Reporting Principles and Standard Disclosures.

The GRI says the G4 outperforms its predecessor by:

  • Placing more emphasis on materiality, by encouraging companies to provide only disclosures and indicators relevant to their business;
  • Being more “user friendly” and accessible for those new to reporting;
  • Helping businesses generate material sustainability information for inclusion in integrated reports;
  • Syncing with other global frameworks including the OECD MNE Guidelines, the United Nations Global Compact Principles and the UN Guiding Principles on Business and Human Rights.

Other changes in the new framework, noted in an EnvironmentEnergyPro analyst paper by Abbie Curtis of Verdantix:

Good-bye to the ABCs: The A-B-C system from G3 has been replaced with a two-tier “in accordance with” system. Reporters can choose between “core” and “comprehensive” tiers.

Emphasis on remuneration: There are five new remuneration indicators within the “general standard disclosures” that all firms must report on. GRI considers this to be material for all firms across sectors.

Additional supply chain disclosures: G4 adds supply chain aspects and metrics to five of the six GRI dimensions – environmental, human rights, labor practices, society, and economic.

More nuanced approach to external assurance: Under G4, externally assured reports are no longer denoted with a ‘+’. Instead, the report’s index will show which data has been assured on a disclosure-by-disclosure basis.

Curtis argues that the changes present several opportunities and drawbacks, including:

  • Relief from reporting unnecessary data
  • Opportunities to use reporting to engage more audiences
  • Pressure to report negative indicators
  • Pressure to report on difficult-to-measure (and costly) indicators
  • Unclear links with integrated reporting.

More in the EnvironmentEnergyPro report, GRI’s G4 Reporting Guidelines.

(Updated May 23, 2014)

Carbon Disclosure Project[2]

This non-profit holds the world’s largest database of corporate emissions and water use data. Over 3,000 organizations in about 60 countries measure and disclose their greenhouse gas emissions, water management and climate change strategies through CDP, to help them set reduction targets and make performance improvements. The data is available to the public.

Corporate Register[3]

This website holds the world’s largest online registry of CSR reports. It also holds the CR Reporting Awards for sustainability reporting.


This organization, perhaps best known as an umbrella group for shareholder activism, also runs the Ceres-ACCA North American Awards for Sustainability Reporting, together with the Association of Chartered Certified Accountants.

Companies are investing more in sustainability assurance as they increasingly seek to improve the credibility of their reports.[5] Although GRI does not itself assure content of sustainability reports, it recommends that companies do get their reports externally assured. Companies that do this can add a “+” to their application level (e.g., A+, B+ or C+). GRI has identified six key qualities for external assurance (see Q&A).

But the judges in the Ceres-ACCA awards said that reports submitted to the competition continued to lack verification and assurance. Some companies have expressed concerns over whether the cost of assurance is justified, arguing that external stakeholders often don’t value it, despite being the primary target audience for assurance statements.[6]

Verdantix compared 13 assurance providers on 48 criteria including energy and environment expertise, knowledge of standards and customer wins. It found the market leaders to be the “big four” financial audit firms – Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers – along Bureau Veritas and DNV. This demonstrates the financial materiality of sustainability risks, the research house said. Veritas’s customer panel said that PwC has the strongest sustainability expertise, followed by KPMG, ERM and DNV. Other major assurance companies include BSI, ERM, LRQA, SGS, TÜV SÜD, UL-DQS and URS.[7]

Latest Developments in Sustainability Reporting

Sustainability reporting has experienced steady, continuous growth over the past 18 years, from just 26 reports published in 1992 to over 5,000 last year, according to Corporate Register.[8]

GRI-based reports form only a proportion of that total. In 2010 there were 1,852 GRI reports, or about 36 percent of sustainability reports issued. In 2009 there were 1,514 GRI reports, or about 33 percent.[9]

GRI’s own figures show the number of reports following their guidelines to have been 11 in 1999, increasing more than ten-fold to 122 by 2001, then rising each year until surpassing the 1,000-report mark in 2008. But GRI notes that it only started its data collection in the beginning of 2009, using retrospective data for the years before that based on publication years of reports. The data from 1999 to 2008 is therefore less reliable and presents the very minimum number of GRI reports that may have been published in those years, the organization says.[10]

In terms of global participation rates, U.S. companies created the greatest number of GRI-based sustainability reports last year with ten percent, or about 520 reports. The distinction is somewhat dubious, however, because the U.S. has 28 percent of Global 500 companies, so would be expected to produce far more reports. Spain is second-ranked for its number of reports and punches at something much closer to its own weight. Brazil’s rate of reporting seriously outweighs its ranking as a Global 500 country (see chart – Top 10 Countries by Proportion of World Sustainability Reports).[11]

The U.S. rate of sustainability reporting also falls short as a function of GDP. The GRI reports that under this metric, since 2008, the U.S. has continually come tenth out of the top ten reporting countries. Sweden surged into the lead in 2009 and continues to hold that position. Last year the other countries in the top ten were Spain in second place; the Netherlands and Japan in joint third; followed by Brazil, Australia, Canada, the U.K. and Germany.[12]

Financial services publish by far the most GRI-guidelined reports of any sector, with over 250 in 2010, compared to less than 150 for the second-highest sector, energy. This was followed by energy utilities, food and beverage, mining, construction, and telecommunications.[13]

Utilities are also the most frequent disclosers of carbon intensity targets, followed by consumer staples, materials and IT. The financial, healthcare and telecommunications and healthcare industries use absolute carbon targets more often than they do carbon intensity targets (see chart).[14]


Integrated reporting

Many companies are beginning to consider merging their sustainability reports with their traditional annual reports, because they increasingly recognize the materiality of environmental issues to their business. This approach is so far much more pervasive in Europe than in the U.S. (see chart, Companies Using Integrated Reporting – Regional Split.) Of this year’s 98 submissions in the Ceres-ACCA awards, only two – from American Electric Power and Vancity – were integrated reports.[15]

There are other ways to highlight the material impact of sustainability, without the full merger of CSR and annual reports, however. Baxter International has produced an Environmental Financial Statement since 1994, disclosing cost savings and return on investment (ROI) for environmental projects.[16]

To create guidance for integrated reporting, the GRI, together with the Prince of Wales Accounting for Sustainability Project (AS4) and representatives from business, non-profits, government and standard-setters, started the International Integrated Reporting Committee (IIRC).

In June 2011, the GRI and Deloitte signed an agreement to develop a sustainability taxonomy for the eXtensible Business Reporting Language.[17] XBRL is an open-source language for the electronic communication of business and financial data, and its potential for sustainability reporting has been under discussion for some time. Some commentators have said that the use of XBRL in sustainability reporting will push many companies to start integrating their financial and CSR reports, and could push sustainability onto the CFO’s plate.[18]

But the Ceres-ACCA judges said that integrated reporting cannot completely replace traditional forms of sustainability disclosure to stakeholders, because integrated reports usually speak only to shareholders and analysts, rather than to the broad audience addressed by sustainability reports.[19]

Arguing the business case for sustainability

Even traditional, non-integrated sustainability reports are increasingly laying out the business case for environmental initiatives Smithfield Foods and Baxter disclose the cost savings and return on investment (ROI) of sustainability strategies and investments. Best Buy outlines how corporate responsibility helps to increase revenue, operating margins and cash flow margins, and reduce risks.[20]

Materiality analysis

The Ceres-ACCA judges noted a rise in disclosure of the materiality assessment process. Companies making such disclosures include Symantec, Vancity, Ford and SAP. Ford includes a materiality matrix together with a summary of new issues and key changes from the previous year and SAP has an interactive matrix that allows stakeholders to submit feedback. [21]

Presentation and communication trends

The judges in the Ceres-ACCA awards said that the past year saw “the death of the hard copy report”. In the competition, 98 percent of reports had an online component, and only a handful submitted printed copies.[22]

Companies have also been moving from simple PDFs to more interactive, layered web-based communications. In many cases, the sections of a report are presented as nestled tabs or menu items. Some companies encourage users to build their own reports by clicking on the components they’re interested in. The site then creates a document containing only those sections.

Some of these approaches result in more user-friendly reports; some end up making information more difficult for users to find, because companies eliminating traditional tables of contents can lose the intuitive navigation that guides readers through a traditional report.

“A shift to web-based reporting brought with it new web technologies focused on engaging the report user in innovative ways, allowing the creation of a customized ‘report experience,’” the Ceres-ACCA judges note. “However, the transition to online disclosure also introduced new challenges with report usability and accessibility.”[23]

Increasingly, companies are using social media to communicate messages from their sustainability reports.

Water risk reporting

Companies are expanding their understanding of the impacts that water scarcity and quality can have on their operations and supply chains, according to the ACCA-CERES judges. ConAgra Foods and Baxter use the World Business Council for Sustainable Development’s Water Tool to report the proportion of facilities operating in water stressed regions, and both have set reduction targets. DuPont has also analyzed its vulnerability in water stressed areas and set a goal to reduce water use by at least 30 percent in those areas.[24]

Substantive stakeholder dialogue and engagement

Nearly 85 percent of companies submitting reports to the Ceres-ACCA awards are disclosing how they engage stakeholders on sustainability issues. But the judges said the specifics of how this feedback was solicited and used is still lacking. Positive examples include GE and Cemex, which include unedited stakeholder letters in their reports, while Baxter includes a table of stakeholder feedback and the company’s responses.[25]

Product stewardship

Companies are increasingly publishing information on the full life cycle of their products. Ford, Seventh Generation and Nike all use their reports to describe how their product assessment tools. Aveda discusses the company’s long-running Soil to Bottle program, which traces ingredients back to the farm or co-op where they were grown. HP, Dell and Best Buy shared strategies to take back products at the end of their lifecycle.[26]

Worldwide and U.S. markets

Adoption by businesses

American Electric Power: The utility was runner-up for best sustainability report in the 2010 Ceres-ACCA North American Awards for Sustainability Reporting. AEP is one of a handful of U.S. companies publishing integrated reports. The Ceres-ACCA judges said the AEP report includes a good discussion of governance structures and management accountability, a candid discussion on challenges and mid-year updates on key performance commitments, focusing on the issues raised most often by stakeholders. The report discloses results of a survey of coal suppliers and identifies the company’s position on difficult issues, including where its stance may differ from stakeholders’. More information in the Q&A.

Hewlett-Packard: The IT company won the prize for best corporate responsibility report of the year in the CR Reporting Awards 2011, for Changing the Equation, HP Global Citizenship Report 2009, and was a runner-up for creativity in communications. The judges in the Ceres-ACCA awards said that HP continues to excel on supply chain reporting by publishing a supplier list and aggregated supply chain GHG emissions, and providing details of how it is working with suppliers to increase energy efficiency and use of renewables. HPoffers its report in 12 languages. More information in the Q&A.

Nike: The sports apparel company won for best sustainability report in the 2010 Ceres-ACCA awards. According to the judges, the report effectively demonstrates the connection between Nike’s business and sustainability strategies, through a dedicated Corporate Responsibility Strategy section. The report outlines membership and responsibilities of the Corporate Responsibility Committee.

The report shares the company’s supply chain audit tools and provides details on its contract manufacturing network in an interactive map. It details the company’s product stewardship strategy, including its Considered Design Index and Material Analysis Tool.

The letter from the CEO highlights lessons the company has learned as its sustainability strategy develops over time. The report also details how it was altered based on stakeholder feedback.

Anvil Knitwear: The apparel manufacturer won for best first-time report in the 2010 Ceres-ACCA awards. The judges said that Anvil used web technology in an innovative way to deliver a compelling and interactive report. They said that the company candidly discussed the challenges facing both Anvil and the industry at large, with detailed descriptions of how Anvil is seeking to address those challenges and indentify business opportunities.

The report detailed how sustainability is woven throughout the company’s governance and management structures, with information on management’s approach to each issue area. It described Anvil’s work to better understand product impacts and communicate that information to consumers, and included life cycle assessments of the company’s main product lines.

SAP: The company won a commendation for innovative use of web and social media in the 2010 Ceres-ACCA awards. The judges said SAP creatively used videos, including interviews with its co-CEOs, chief sustainability officer and VP of operations, to provide a more in-depth understanding of the company’s strategy and management processes. Users can customize data charts and download them in Excel format.

Features also included an interactive materiality matrix that allows users to view how the company’s materiality assessment has changed year to year, with the option for users to submit their own feedback. An online forum allows users to comment on every page of the report and respond to each others’ posts.

Coca-Cola: The drinks maker was a runner-up in the best overall report category in the CR Reporting Awards 2011, for its 2009 report, and won in 2009 in the Creativity in Communications category.

Bayer AG: The healthcare company was a runner-up in the best overall report category in the CR Reporting Awards 2011, for its 2009 report.

Virgin Group: The British group won awards for best first-time report and for creativity in communications, in the CR Reporting Awards 2011.

McGraw Hill: The publisher was a runner-up for best first-time report in the CR Reporting Awards 2011

Hyundai: The car maker was a runner-up for best first-time report in the CR Reporting Awards 2011.

Vodafone Group: The telecoms company was awarded Best Carbon Disclosure in the CR Reporting Awards 2011 and won in 2009 for Best Overall Report, Relevance & Materiality and Credibility through Assurance.

General Electric: The technology and financial company was runner-up for carbon disclosure and credibility through assurance in the CR Reporting Awards 2011

Novo Nordisk: The Danish pharmaceutical company was the winner for openness and honesty, and runner up for relevance and materiality, in the CR Reporting Awards 2011. It also won the best integrated report award in 2009.

SABMiller: The brewer won an award for relevance and materiality in the CR Reporting Awards 2011.

Natura Cosmeticos SA: The Brazilian cosmetics company was a winner for best integrated report in the CR Reporting Awards 2011

The future of sustainability reporting

Projections for the growth of sustainability reporting are hard to come by. But all the pressures that have contributed to the growth of the past few years – such as shareholder demands for transparency, consumer concerns and media scrutiny – look set to continue. Constraints on resources, including energy and water, are likely to compel more and more detailed data collection, providing a rich bed of information for future reports.

Water usage is likely to receive greater attention in the future, reflecting its rise in prominence as an area of concern for investors and NGOs, some of whom dub it “the new carbon”. Integrated reporting is also likely to increase in popularity.

The Ceres-ACCA judges have called on reporters to get more specific on how stakeholder feedback was solicited and used, and provide more transparency on supply chain impacts. On the latter issue in particular, we predict some evolution, as companies increasingly solicit emissions and consumption data from the length of the value chain.

Sustainability Reporting: What does all this mean?

  • For the largest global companies, for financial services firms, and for those in sectors most exposed to environmental and energy risks, sustainability reporting is becoming the norm.
  • The GRI’s is the most widely accepted framework for sustainability reporting, although it still only accounts for about 36 percent of sustainability reports issued.
  • U.S. companies fall behind countries like Spain, Sweden and Brazil when looking at reporting rates as a function of GDP or the number of Global 500 companies in a given country.
  • NGOs such as GRI and the Carbon Disclosure Project offer a variety of resources to help companies get started in their sustainability reporting. A number of for-profit companies offer assurance for report content.

Sources and Further Reading

[6] Ibid.

[7] Ibid.

[10] Correspondence with GRI.

[12] Ibid.

[13] Ibid.

[14] Carbon Disclosure Project and PricewaterhouseCoopers, 2010 Global 500 Report.

[16] Ibid.



[19] Ibid.

[20] Ibid.

[21] Ibid.

[22] Ibid.

[23] Ibid.

[24] Ibid.

[25] Ibid.

[26] Ibid.

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