top of page
  • Writer's pictureGeneral Carbon


The Global Reporting Initiative in May 2013 published G4 guidelines; however it made a provision for considerable transition time and made G3/G3.1 guidelines applicable till the end of December 2015. That means companies that wish to disclose sustainability performance based on the requirements of G3/G3.1can do so for the reporting periods of January – December 2014 or April 14 – March 15. The Sustainability reports of subsequent reporting period have to adhere to GRI G4 guidelines. In view of this transition, companies now have to address the challenges and prepare themselves to conform to the GRI G4 requirements.

Challenges in G3 to G4 Transition

  1. Materiality is vital

As per G4, organizations will have to identify material issues and focus the disclosures on material issues. Though materiality is not new, the G4 framework more explicitly requires reporting efforts on materiality — impacts, risks and opportunities. The primary action G4 requires is an organized materiality assessment followed by disclosure of what the material topics are? What were previously known as technical protocol for determining report content in G3.1 guidelines is first and centred in G4 with easy set of information for planning a reporting process. The G4 guidelines not only require you to identify and disclose material issues but the very identification process has to be disclosed.

  1. Disclosures on Management Approach – “Expanded”

In G4, Disclosure on Management Approach (DMAs) will be more focused at the aspect level, which means companies need to now disclose how they manage each aspect separately. Three diverse elements will help guide reporters in reporting. First, companies will explain why an Aspect is material and which impacts make it material, second, how the company manages impacts, and third, which mechanisms are in place for evaluating the management approach. In GRI 3.1 the standard disclosures (profile indicators) were a list of indicators which most reports already cover to some extent whereas in G4 the standard disclosures have been expanded. More emphasis is laid on information concerning themes such as ethics, integrity, governance and remuneration.

  1. Reporting Levels (A, B and C) Replaced – “In Accordance Level Is In” in G4

The reporting Levels A, B and C are replaced from the framework. Organizations now have two options (levels) for reporting “in accordance with” the GRI guidelines: “core” and “comprehensive” reporting in G4 whereas in G3 level A was the highest application level and indicated that companies reported against all indicators and a + sign was awarded to organizations when their reports were externally assured, G4 + no longer exists.

  1. Stakeholders Dialogue Becomes Crucial

With the new requirements of G4 stakeholder dialogue and engagement will also see a change in terms of depth and quality. In G4 the reporting organization not only has to clarify how the engagement of stakeholder was structured but also how the engagement has lead to the selection of material aspects.

  1. Supply Chain Becomes more Important

In G3/G3.1, an organization only reported those entities over which the company had operational control or considerable influence. The requirement for reporting the information on supply chain was not extensive. However in G4 companies need to explore if their impact of material topics lay outside of their influence, also additional information on supply chain monitoring, material analysis, and impact on people, planet and profit has to be provided by the reporting organization.

  1. Concept of Boundary

Boundary is the region where the impact of the identified material aspect is seen. The impact can occur within the organization or outside the organizations or both within as well as outside the organization. Each identified aspect can have a separate boundary. As per G3 guidelines the sustainability reporting boundary includes the entities over which the organization exercises control or has significant influence across the supply chain, distribution and customers. In G4 the boundary considers where impacts related to material aspects occur, within or outside of the organization or both, irrespective of whether the organization exercises control or significant influence over a entity. G4 emphasizes who/what is affected and where impact occurs where as G3 did not emphasize on who/what and where concept.

  1. External Assurance

G4 the guidelines allows for external (third party) assurance to be conducted by different organizations for different impact areas. Disclosures about the assurance must be indicated in the Content Index accordingly.

  1. G4 has – A General manual Document and a Implementation Manual

The G4 guidelines are divided into documents

  1. A manual document consisting of the principles and standard disclosures.

  2. Implementation manual to help reporting organization make their way through the process.

Concluding Thoughts

The transition from G3/G3.1 to G4 offers challenges to reporting organizations, however on a positive note the reporting organizations are hopeful that these changes will make G4 much more simplified and easy for the new as well as experienced reporting organizations and that G4 guidelines will help organization come up with robust & purposeful sustainability reports that matter the most to the stakeholders.

(This blog is a part of ABRC Series of blogs to reflect the Challenges of Transition from G3/G3.1 to G4 for Sustainability Practitioners and Managers)

1 view0 comments

Recent Posts

See All

On Wednesday 1 April, the annual Corporate Sustainability Assessment begins. The S&P questionnaire will be open for filling in. As you know, this is the basis for selecting the best- performing compan

Don’t expect a straight answer. The best answer is -there is an increased intensity of noise and buzz around carbon credits generated under the Clean Development Mechanism. Many trade inquiries for CE

The entities in India, have adopted BRR since 2012 and the disclosures by many entities are available in public domain. Some analysts have attempted rating and investors have begun taking note of. As

bottom of page