IN A NUTSHELL, here are the key changes. This section is short and sweet, as G4 is less about technicalities and more about essence. But you ought to know what is different, especially if you are transitioning from current reporting. Below is the condensed version. The full version is in the remaining sections of this book, with commentaries.

Reporting levels have changed to CORE and COMPREHENSIVE for adherence to G4 guidelines to be ‘in accordance’. There are more General Standard Disclosures at COMPREHENSIVE level. For both levels, a materiality assessment should be undertaken and a number of topics selected as Material Aspects, and these form the basis of the remaining report content. The selection depends on the company and its stakeholders, and applies to CORE and COMPREHENSIVE level reporting equally. No ‘+’ is now awarded for assurance.

Core and Add disclosures are now no longer differentiated. In G4, all Performance Indicators carry equal weight and the selection of indicators to report is determined by a materiality process and the reporting level, and not pre-defined by the GRI framework. In practice, this means that companies reporting at COMPREHENSIVE level will be required to report more indicators per Material Aspect. For example, if a company selects the Material Aspect ‘Product Service and Labelling’ in the Product Responsibility category of Specific Standard Disclosures, the company will report on three indicators (G4-PR3, G4-PR4, G4-PR5) whereas in G3 only one (PR3) was core and therefore required to meet Application Level A. In G3.1 overall, 29 of the 84 performance indicators were labelled ‘additional’ and not therefore required at G3 Application Level A. In G4, all these indicators now carry the same weight, but only if they are part of a selected Material Aspect.

44 General Standard Disclosures (GSDs) have been expanded and changed as can be seen in Figure 3. The highlights are as follows:

Two labor disclosures (G3 LA1 and G3 LA4), now required, previously optional. These cover employee numbers and collective bargaining.

Fifteen entirely or extensively modified disclosures in the governance and remuneration category (G4-34–G4-55) requiring much detailed information not previously included.

Requirement to describe the organization’s supply chain (G4-12).

Requirement to list process for determining material topics and listing them (G4-18, G4-19).

Disclosure of where the Material Aspect occurs in the organization (G4-21), including whether internal or external to the organization.

45 Two new disclosures about ethics (G4-57 and G4-58) focusing on grievance mechanisms.

Disclosure on Management Approach (DMA) has been changed. Instead of a specific DMA for every Aspect, material or otherwise, reporters must now make a DMA for a specific Material Aspect OR a group of Material Aspects, depending on what has been selected for the report content. (If several Aspects in the same category have been selected as material, then the DMA may apply to the entire category, rather than each of the Aspects individually.) G4 divides the DMAs into Generic DMA and Specific DMA. The Generic DMA, which should be applied consistently for all Material Aspects (or group of Aspects) is set out in G4-DMA (G4IM, p. 64) and has three requirements: why an impact is material, how the organization manages the Material Aspect or its impacts and an evaluation of the management approach. This is relevant for any material topic selected, even if it is not one of the G4 pre-prepared Material Aspects. For example, if an alcohol company selects responsible drinking as a Material Topic, which is not an Aspect as included in the GRI list, then a DMA is still required for this Topic. In addition to the Generic DMA reporting requirement, the G4 Implementation Manual includes specific guidance for some of the Material Aspects listed (G4IM, p. 62), but not for all. This is called Aspect-specific guidance. For Material Aspects selected by the reporting company, where guidance is available, G4 reporters are encouraged to use this guidance, although it is not required to be ‘In Accordance’. See Figure 4 for a list of the pre-prepared Material Aspects listed in G4 (G4IM, p. 64).

46 Boundaries in G4 should now be Aspect Specific. This means, for any Material Aspect selected, the reporting company must define whether the impact is internal or external to the organization (disclosures G4-20 and G4-21). This means companies have to consider more than just their internal operations and look for broader impacts of their activities, and include these considerations in their reporting.

Specific Standard Disclosures (SSDs) contain many changes in G4, which will be relevant to each reporter depending on the Material Aspects selected to be included in the report. Each SSD starts with a DMA (see above). Then, for each Material Aspect, there is a list of prescribed Performance Indicators. Of course, you can add more if you wish! Overall, G4 contains 15% more indicators than G3 (see Figure 5), so you have a bigger pot to choose from.