G4 Global Reporting Standards and AA1000
Identifying Your Stakeholders
- Internal consultation
- Media search
- External consultation
Important stakeholders are inherently known to organisations and most organisations are interacting with these stakeholders in some form or another as a matter of course. Such engagement happens in different formats and at various levels however, this process is often ad-hoc and without a formal structure and process in place and it is important that the process embedded in sound business practices.
Assessing your Material issues
The process of establishing materiality levels for non-financial information starts with the understanding of, and engaging with, the important stakeholders and encompasses the criteria to identify material items and how these are prioritised. As non-financial metrics are, by definition, not priced in markets, to undertake these evaluations the underlying values, ethics and decision-making processes of stakeholders need to be interpreted. The materiality of issues to stakeholders however cannot be assessed without taking into consideration the significance of these issues to business itself. This overlap between what is important to stakeholders as well as to the business, defines the real material issues that should be incorporated in the sustainability strategy and framework.
Prioritising material issues is a key part of both the AA1000 and GRI reporting principles. However this exercise can sometimes be sensitive as stakeholder will hold varying opinions on whether or not an issue is material or not. For this reason it is recommended that within the Sustainability Report, that the identified issues reported in tiers or are show on a materiality matrix as demonstrated on below and the contents of your reporting should broadly be ordered in accordance with which tier the issue falls into.
Responsiveness and developing your strategy
Key issues that should be covered within your strategy include
- Overall vision and how it links to the overall business strategy
- Objectives, targets and KPIs
- Road map for implementation
An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term.
<IR> is needed by business and investors. Businesses need a reporting environment that is conducive to understanding and articulating their strategy, which helps to drive performance internally and attract financial capital for investment. Investors need to understand how the strategy being pursued creates value over time
Examples of Impact Reporting may be found here – http://www.theiirc.org/