GRI Brief Social Performance Task Force Meeting Teodorina Lessidrenska, GRI Associate, Triodos-FACET Consultant on TBL&SR 18 June 2008, Paris, France

GRI Brief

Social Performance Task Force Meeting

Teodorina Lessidrenska, GRI Associate, Triodos-FACET Consultant on TBL&SR18 June 2008, Paris, France

Teodorina Lessidrenska 18 June 2008, Paris, France

GRI in a nutshell www.globalreporting.org

Globally accepted standard for SR by any type organisation

More than 4,000 reporters (+1500 officially registered across +50 countries)

Developed by the stakeholders for the stakeholders

Continues improvement - through open multi-stakeholder process balanced within and across sectors and regions (3 revisions since 2000)

GRI Secretariat - facilitates the network&responsible for quality control

Independant Institution – multistakeholder governance/diverse, balanced funding


GRI SR Standard in a nutshell www.globalreporting.org

Voluntary, but growing pressure for mandatory approach

GRI Standard elements: 1) SR Guidelines (G3) - reporting principles and guidance, disclosures on org. strategy/profile/governance/report&process, environmental, social and economic performance indicators and management disclosures (DMA), with indicator protocols; 2) Sector Supplements; 3) National Annexes; 4) issue focused documents (SMEs, Climate Change, etc.)

Harmonisation with: CSR initiatives (GC), Equator Principles, Sustainability Indexes; financial accountancy&reporting (EU Accountancy/Sox); CG codes; key issues (Climate Change, MDG, Water, AIDS, etc.); coming – ISO 26000Governmental endorsement – WSSD

Semi-flexible application –indicators selection and “adopt or explain” rule; focus on past performance, and targets/commitments to future performance improvements


GRI Sector Supplements

Ready Underway Pipeline

Automotive Logistics and Transportation Information Technology

Telecommunications Apparel and Footwear Food Processing

Financial Services:

MDB---Traditional Banks---(MFI)

Energy Utilities

(finished)

Oil and Gas

Tour Operators NGOs / Foundations

Mining and Metals Airports

Public Agencies

Developed by each sector with GRI as provider of process structure, facilitation, end product and process quality control, and alignment with the GRI Standard Integrate the relevant initiatives developed within each sector and the available TBL experience &best practices Address the sector-specific issues of importance for the sector’s stakeholders


Performance Indicators dynamicsGRI Guidelines (G3)

SO1: Nature, scope, and effectiveness of any programs and practices that assess and manage impacts of operations on the communities

Financial Sector Supplement

PR impact/Ind. #6: Monetary value of products and services designed to deliver a specific social benefit

SO&community/Ind. #9: Access to financial services in low-populated or economically disadvantaged areas by type of access

MFI- specific SP data (not addressed by GRI):

Impacts of services and products: on quality of life for clients (income, assets, savings, education, etc.); at enterprise level (generated employment) at community level

Geographic breakdown of markets; geographic spread of services

Customer and product/service profile

Outrech measurement Client satisfaction and

retention


Leader/s emerge within the sector and convene key players

Sectoral leader/s approach GRI, propose SS development and ensure funding

GRI in collaboration with the sectoral leader/s sets up a standardised SS

development process: global balanced multi-stakeholder working group GRI co-coordinates the WG activities, co-facilitates WG discussions,

assists with content to ensure linkages with GRI portfolio and quality control

SS draft for pilot test, revisions by WG, and finalisation Full scale SS - finalisation by GRI TAC and BOD Annexes to existing SS - softer requirements time-wise and resources-wise

GRI Supplement development


Why sectors choose the GRI supplement development process?

Efficiency and quality of the tested and globally accepted GRI process and product

Alignment of the sector’s initiatives with the global gold standard across all sectors ensures: Global multistakeholder consensus Standardisation of TBL measurement, reporting, and language within

the sector and with the other sectors Credibility and visibility Global reach and strong uptake within the sector Impact on the global debate and agenda, access to best

practices&trends, influence on global/national policies


SPTF priorities in regard with GRI Attention to social and financial/economic performance and impacts, but also to

environmental aspects – movement toward TBL? Governance included – required by GRI Linkages to management and strategy are key Need to be applicable to different type and size organisations (all MFIs:

MFNGOs--MFbanks; GRI also to SMEs, governmental inst., banks, MNCs...) Practical, cost efficient reporting approach Should match info users’ needs Stakeholder/practitioners’ endorsement Need to address multistakeholder needs and expectations Definitions and language challenge Info collection methodology and tools needed for implemetation Verification Emerging “reporting engines” and other service-oriented players


The social aspects are partially addressed by GRI and FSS – there are areas of overlap with MFS initiatves that need clarification and further development/more depth

The GRI is not addressing: impact measurement/analysis specifics of MF bank’s organisational and client profille, social goals,

mission, systems and policies for management of social impact and performance

These gaps can be resolved in regard with the whole FS with MF sector taking the lead and bringing its learning and knowledge in social impact analysis.

Gap analysis of G3/FSS re MFI needs


Opportunistic developments? Some MFIs use SPTF SPIs, in some cases with added GRI

environmental indicators, and different reporting frameworks continue to evolve

Some MFIs use the GRI, with added SPIs to fill the gaps re performance and impacts on clients and communities

MFIs and FIs use different indicators and tools

Take the leadership and integrate MF indicators into GRI? MFI leadership to convene key players from MFS, financial

and other related sectors to work with GRI on integration of the SPTF work and development of MF annex within the GRI FSS for use by the whole financial sector

Other?

What direction MFS will take re Performance and Impact Measurement&Reporting?


Thank You!

Web: www.globalreporting.org

Email: [email protected]

[email protected]


The future of SR – the financial accountant’s perspective

Source: KPMG International Survey of CSR Reporting 2005

•Standardisation*An accelerating shift towards common formats for non-financial reporting (GRI)

•Regulation*Emergence of government mandated non-financial reporting

•Integration*Growing attempts to merge, or blend, much of non-financial reporting with financial reporting

*from S&P, SA and UNEP: Risk and Opportunity


GRI process: evolving Guidelines (three revision cycles since 1999)

2003

2004

2005

2006

Structured

feedbackprocesson 2002

guidelines

Collaborative

workinggroups

International

sneak peeks

G3 Guidelines

released

Futuredevelopme

nt

G3 Development Process (2002-2006)


Mission and strategy alignment with market and global trends “Data and goals for social, economic and environmental performance and impact

– part of the whole management system” Quality management responsive to dynamic and complex business environment

Branding, reputation and visibility “Able to distinguish ourselves from the other MFIs and commercial banks” Recognition by international and local clients, investors NGOs, communities, etc.

Improved services (products) “ We are learning from the ongoing dialogue with our clients” “Brings ideas re improvement of our services or development of new products”

Transparency and accountability in line with the global standards Improved dialogue with shareholders and other stakeholders Improved shareholder confidence - informed and engaged shareholders

Efficient, flexible multi-purpose tool “GRI offers tested and globally accepted process and product” Flexible application of the Guidelines in conjunction with sector supplements Multidimentional application for management, internal dialogue, reporting,

marketing and stakeholder dialogue on sustainability

Why a MFI Considers Using GRI?


Global trends toward SM as element of CSR/SB

Social/env/economic=TBL (SB) Language Change in roles of players (govmt/bussiness/CS) Balanced multistakeholder consultations and consensus building

processes Alignment and linkages with the financial and organisational

management, and corporate governance Connectivity, harmonisation of initiatives and

systems=simplification, unification, standardisation


Trends in SM implementation on organisational (micro) level

Ad-hock/firefighting approach

Reactive/compliance based strategies

Charity/donations to community

Separation from financial aspects and everyday business

Dealt internally only PR focused/keep problems

internally

Comprehensive/strategic planning Proactive/solutions&opportiunities

based Community

engagement/partnerships Integrated with overall business

strategies, management, operations Engage with stakeholders Transparency/accountability through

standardised TBL reporting

Moving from: To TBL strategy basics:

..and from exclusively used by large global corporations/banks toward expected from all types/sizes banks/organisations


Key observations for growing SM/SR interest in 2006-2007

UN and institutional investors launch PRI, 05/06 (93 signatories, rep. more than US$3 trillion)– reached up 8 trillion in assets by May 2007.

Equator principles revised (alignment with the new IFC policies), Summer 2006 – growing # signatories in 2007

Insurance industry adopts climate change policies; 190 new innovative products and services currently available from dozens insurance providers in 16 countries (CERES report, 06/07)

UNEP FI - number of publications: SM and Reporting (12/06), 2007 Report: Banking on Value – A new approach to credit risk in Africa; Report: RI in Focus - How leading public pension funds are meeting the challenge (04/07)

MFI sector: Microcredit Summit 2006 –focus on DBL/MDG; critical evaluation of real impacts and value created by MFIs (CristianAid/UK, 06); GreenMF initiatives expand and convene discussions on TBL MF agenda; traditional banks flood the MFI market, playing out the SB message; CSR/ESG/SR and SB still new but gaining popularity among MF banks


Leveraging investment – SRI fund managers see GRI as best practice

ISIS Asset Management. Quarterly Report, March 2004


Investors Expect Information about Sustainability

“

”SIGNATORIES – $50 billion:

Boston Common Asset Management, LLC - Calvert Group - Christian Brothers Investment Services - Citizens Advisers Inc. - Domini Social Investments - Dreyfus Premier Third Century Fund, Inc. / Dreyfus Socially Responsible Growth Fund, Inc. - Ethical Funds -Green Century Funds - ISIS Asset Management - Mennonite Mutual Aid - Neuberger Berman Socially Responsive Investing - Real Assets - Trillium Asset Management Corporation - Pax World Funds - The Pension Boards - UCC United Church Foundation - Progressive Asset Management, Inc. - Walden Asset Management, a division of Boston Trust & Investment Management

SUPPORTING ORGANIZATIONS: Coalition for Environmentally

Responsible Economies (CERES) - Innovest Strategic Value Advisors,

Inc.- Interfaith Center on Corporate

Responsibility (ICCR)- Investor Research Responsibility

Center, Inc. (IRRC) - KLD Research & Analytics, Inc. - Jantzi Research Inc.

…a company’s GRI report should be the first place investors and research institutions consult for

information…


TSF ProjectA GRI/Triodos initiative introducing sustainability and GRI reporting and management to MFI through: coaching/direct hands on assistance and creation of a learning network. Coming: WWW information exchange platform; trainings,

practical tools and guiding materials development.

Participating MFIs: Acleda (Cambodia) Banco Solidario (Equador) Centenary (Uganda) FIE (Bolivia) Findesa (Nicaragua) K-Rep (Kenya) Akiba (Tanzania) XAC Bank (Mongolia) Mibanco (Peru) BSF; Share Microfin; Bellwether (India)

MFI


The GRI reporting process and application levels

1. PLAN 2. MEASURE 3. REPORT4. Assurance 5 Interpretation 6.Dissemination

7. Feedback

REPORTER’S GRI APPLICATION LEVELS CHECKC. Beginner B. Mid level A.Experienced

Reportiing organisation/internal stakeholders (1,2,3,5,6,9)Reporter’s External stakeholders (2,3,9)

Assurance provider (4, 9)Assurance stakeholder panel (4, 9)

Reportiing organisation/internal stakeholders (7,9)External stakeholders (7, 9)

8.benchmarking

9. Mgmt &

strategy change

GRI SecretariatAssurance providersExternal partyReporter-self assessment

Documents

GRI Brief Social Performance Task Force Meeting Teodorina Lessidrenska, GRI Associate, Triodos-FACET Consultant on TBL&SR 18 June 2008, Paris, France