Preparing a GRI or SASB Index: Observations and Recommendations

Potential clients and clients often want help with preparing a Global Reporting Initiative (GRI) or Sustainability Accounting Standards Board (SASB) index for their annual sustainability or ESG reports.  We are happy to assist companies with this task and take our role as trained GRI and SASB professionals seriously. 

There is both an art and a science to annual sustainability reporting. We have noticed that some companies think of a GRI or SASB index as an isolated, stand-alone activity and feel they must “tick the box” because investors or some other stakeholder group has asked for an index.  However, we encourage companies to think more holistically about the opportunity that preparing an index, or better yet, a fully aligned GRI or SASB-based report, provides.  Sustainability reporting is not meant to feel like a burdensome add-on activity but rather is meant to help better manage a company’s performance. 

To that end, we’d like to provide some observations, cautions and recommendations based on our experience helping clients put together GRI reports and SASB indices. 

Moving beyond the “necessary evil” mentality to reporting can lead to better performance

One of the overarching challenges we see clients face starts when the reporting frameworks are not approached as useful management tools that can provide guidance to best practices and a set of vetted indicators that can be used to measure impact.  Instead of being seen as providing an opportunity for an integrated approach to the company’s sustainability and business strategies, GRI and SASB are sometimes viewed as necessary evils, disconnected from the company’s management approach and KPIs. Sometimes creating an index often appears to be an afterthought to the sustainability report itself. 

Recommendation: Mine GRI and SASB frameworks and indicators and integrate their principles, guidance and indicators into the company’s management approach and business strategy. The more integrated they are, the less painful the reporting and index preparation will be. 

Ongoing data collection and management is key to successful reporting 

Another big pain point related to the first challenge mentioned above is around data collection. We often find that, while clear processes may exist for tracking business KPIs, formal data collection and management processes are often not well established for ESG/sustainability data that goes into the GRI or SASB index. Data is collected and saved in various formats and locations around the organization, instead of in a central location or repository. This means that when reporting season comes around, a lot of effort is required to track down the data and ask any necessary follow-up questions to those who ‘own’ that data.  And it means that the ESG data is generally not being leveraged as well as it could be to measure and manage the company’s impacts. 

Recommendation: Build in processes that integrate sustainability/ESG data collection into existing data tracking systems and other reporting timelines and processes.  Our clients have benefited from data collection platforms such as FigBytes, Measurabl, Wdesk and Benevity.

Getting ahead of potential concerns from the legal and finance departments before reporting season starts will make the process smoother and more effective

Another challenge that we often see around preparing GRI and SASB indices has to do with internal alignment on which data the company feels comfortable disclosing publicly, as well as the validation of the data that is selected to be disclosed.  If the GRI or SASB index is an afterthought to the sustainability/ESG report, the team putting it together often is in last minute skirmishes with the legal or financial department about the level of disclosures and the accuracy of the data collected.  Some of our clients have started including ESG data in their internal audit control practices to help reduce the risk in this area.  

Recommendation: Conduct a GRI or SASB gap analysis to determine what topics may be missing from a company’s sustainability report or strategy and, within those topics, which data points or explanations are missing or partially missing. Schedule multi-disciplinary team meetings to review the gap analysis and weigh the pros and cons of including missing information in the upcoming index or report.  SustainabilityNext often helps our clients with the gap analysis and can help a company determine if and how to address the missing data. 

Develop an annual feedback loop for the reporting cycle to move to “Best in Class” indices. 

One final observation and recommendation: Sustainability reports and their accompanying indices can take months of work and coordination.  Once the report is published, we find that internal reporting teams often move on to other tasks and don’t set up processes to come back to the good analysis, discussions and debates that surfaced during the reporting season.   

Recommendation: To ensure that the gaps and opportunities in GRI and SASB reporting that emerged during the reporting season get addressed, we recommend assigning a point person to document the ideas that emerged and decisions that were made during the reporting season.  This information can be used to set up a debrief and follow up strategy meetings so that any outstanding issues can be worked on before the next reporting season starts.   

At SustainabilityNext, we have worked through and discussed all of these challenges with our clients at various times and can serve as an adjunct to your internal team to prepare GRI and SASB indices that truly serve your organization and its ESG and sustainability goals.