GRI and UN Global Compact Forge New Alliance

In a historic alliance the world’s two largest corporate responsibility initiatives have joined forces to build a universal framework for corporate sustainability performance and disclosure, aiming to transform business practices on a global scale.

Under the terms of a Memorandum of Understanding signed on 28 May 2010, GRI, subject to due process, will integrate the Global Compact’s ten principles and issue areas centrally in the next iteration of its Sustainability Reporting Guidelines. At the same time, the Global Compact will adopt the GRI Guidelines as the recommended reporting framework for companies to communicate on progress made. The two initiatives will also join forces to develop guidance on the use of GRI for the Global Compact and collaborate at the local level on outreach and training.

The alliance, articulated during the UN Global Compact Leaders Summit 2010, is a crucial step in ensuring convergence in the area of corporate sustainability and will allow both initiatives to focus on their respective and complementary strengths – the Global Compact’s mainstreaming of universal principles and UN goals in business, and the GRI’s comprehensive reporting framework.

The new alliance provides companies with a clear roadmap to corporate sustainability, using the GRI’s reporting principles and best practice indicators to report effectively on key corporate sustainability actions advocated by the Global Compact. Together, the two initiatives can guide companies of varying degrees of sophistication towards more sustainable performance and increased transparency.

The convergence of both initiatives will also help mainstream transparency and accountability around environmental, social and governance (ESG) factors and will provide a framework for financial analysts and other stakeholders to identify extra-financial opportunities and risks.

Specific Commitments of the New Alliance

1. GRI, subject to due process, will integrate the Global Compact issue areas and principles centrally in the GRI Guidelines, through the current and upcoming revisions of the Guidelines.

The GRI will, through this revision under its due process, explore how a reference to the Global Compact principles can be best integrated in key sections of the GRI Guidelines, such as the Profile Disclosure, Strategy and Analysis section and the Disclosure on Management Approach, and explore the extent to which the GRI configuration (economic, social, environment) could be aligned with the Global Compact issue areas (human rights, labour, the environment, and anti-corruption).

2. The Global Compact will adopt the GRI Guidelines as the recommended reporting language for companies to communicate progress. GRI provides a common language that helps Global Compact participants to communicate their progress in implementing the principles, using widely accepted reporting principles and best practice indicators.

The GRI Sustainability Reporting Framework is a voluntary ESG reporting and stakeholder engagement and management tool and should not be viewed as a compliance framework. GRI’s Framework provides a good basis to communicate progress on key, corporate sustainability actions advocated by the Global Compact with various levels of sophistication.

3. The Global Compact will, with the support of GRI, develop guidance on the use of GRI as the recommended reporting language, introducing progressive differentiating levels, and detailing specific expected report content at each level.

The Global Compact and GRI will work together on the development of reporting elements for relevant areas lacking robust existing guidance, including the Millennium Development Goals, specific industry sectors and for areas relevant to the issues covered by the Global Compact.

4. The Global Compact and GRI will collaborate on local outreach and training to increase the quantity and quality of reporting, with a special focus on less developed markets and medium and smaller companies. Joint efforts will include encouraging and enabling a closer collaboration of Global Compact Local Networks and GRI’s focal points, both at the governance level and through joint training and other activities.

5. The Global Compact and GRI will share information on their respective participants, including the level of Global Compact participation and GRI reporting levels.