Making Triple Bottom Line Reporting Comparable: Adoption of the gri g3 Framework

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For the 2007 report we have chosen level C reporting for the following reasons: we have gone through a careful and rigorous self-critical process of analysis of where our report completely meets the relevant indicators, we acknowledge that there are still gaps in our reporting. However it is part of our approach to transparency and credible communication not to hide these gaps to our stakeholders by superficially addressing issues in the report, which are not backed by effective policies and programmes.

While the GRI guidelines are a useful benchmark for report readers, we believe they do not fully take into account the nature of the sporting goods industry, where the impacts of supply chain management and their specific challenges outweigh the direct social and environmental impacts of the companies themselves (adidas Group, 2008c).

Given this admission of the “gaps in our reporting,” it is perhaps not surprising that adidas compliance with the G3 Guidelines is spotty at best. Unlike Nike’s index, adidas does not characterize its non-compliance along an A-B-C scale. As noted above, this is entirely appropriate in light of the fact that for companies reporting at Level C, the G3 standards do not allow reasons for omissions. As Table 4 summarizes, the adidas index merely reports where information about a particular GRI performance indicator is disclosed, if at all. Of the seven core economic performance indicators in the G3 Guidelines, adidas reports on only one. The company provides information on 2 of the 17 core environmental indicators. Of the 10 core indicators for labor and decent work, adidas again only provides information on one. In the area of human rights, the company provides complete information on 4 of the 6 core indicators. Adidas provides information on none of the 6 core indicators for society. It gives partial information on just one of the 4 core indicators for product responsibility. In summary, adidas provides some information (complete or partial) on 18% of the 50 core performance. Relative to Nike or indeed to any other organization, adidas’ compliance with the G3 Guidelines is minimal at best. Realizing that the GRI is trying to encourage organization to utilize its framework by allowing the partial adoption of its guidelines, one wonders why adidas bothers to go through the motions of referencing the G3 Guidelines at all.

Nike, adidas & the G3 Framework

From a corporate responsibility perspective, perhaps the greatest challenge for Nike, adidas, and the global sporting goods and apparel industry is the management of their supply chain. The companies do not manufacturer the shoes, apparel, and equipment they sell under their brand-name. Instead the manufacturing of their products is subcontracted to factories, most of which are located in developing nations. Nike, for example, has only around 24,000 employees, the vast majority working in the United States. All other workers are employed by its independent suppliers. Nike estimates that of the 800,000 workers in its contract supply chain, 80% are women between the ages of 18 and 24 (Nike, 2007a, p. 16). Adidas has a very similar, if somewhat more geographically dispersed organizational structure (over 31,000 employees in 150 locations (adidas, 2008b, p. 56)). Because of they face the same corporate citizenship challenges, one would expect the companies’ sustainability reports to provide a similar approach and similar information to communicate their efforts. Yet an analysis of the content of the two reports reveals disturbing inconsistencies in the way in which economic, social, and environmental performance is disclosed. The “footprint” (i.e., locations) of the companies suppliers is remarkably similar (adidas, 2008a, p. 62-63; Nike, 2007a, p. 25) yet the metrics used to measure performance are non-comparable. For example, adidas has created a KPI (Key Performance Indicator) consisting of six units of measure (adidas, 2008a, p. 36). While the company reports the average score in each of the units of measure, there is no way to interpret these data. Nike has a seemingly similar system of auditing the compliance of its suppliers with company policies but it reports the results of this compliance in very different terms than does adidas (Nike, 2007a, pp. 30-32). In short, there is no way to conclude which company is doing a better job of managing its supply chain. Rather than presenting common denominators for comparison of the two companies’ economic, environmental, and social performance, the disparity in the amounts and types of core performance indicators presented by Nike and adidas make any comparison between the two companies meaningless.

Sustainability reporting continues to experience impressive gains. KPMG’s 2008 International Survey on Corporate Responsibility Reporting found that 74 percent of the top 100 U.S. companies published corporate responsibility information in 2008, either as part of their annual financial report or as a separate document. This was an increase from the 37 percent of top U.S. companies that KPMG surveyed in 2005. An even higher percentage of top international firms are reporting on their environmental and social performance with 80 percent of the Global Fortune 250 companies now releasing this information (KPMG & Sustainability, 2008).

Despite these gains, one continuing problem is no standard report structure has emerged. It is not surprising that in a 2008 survey of 2,279 respondents worldwide, 452 did not read sustainability reports because they thought there were better ways to get information (KPMG & SustainAbility, 2008). In this same survey, 25% of the respondents felt that the most significant issues were entirely absent from the reports, with a slight majority feeling the most significant issues weren’t treated with enough detail. Those who participated in the survey felt the most significant omission in sustainability reports was an acknowledgement of the company’s failures.

Some of the difficulties of an absence of a standard report structure are mitigated by the G3 requirement that companies provide a index of how a particular report complies with the G3 Guidelines and where particular information is located in the report. However, as one study concludes, “it appears that many tend to ‘retrofit’ the GRI guidelines, i.e., first develop the report and then cross-check with the guidelines to produce the GRI contents index” (Corporate Register, 2008, p. 31). Even with the growing acceptance of the GRI framework as a common ground for TBL reporting, the disparity in how and what is being reported continues to be frustrating. At best, there is currently a benchmarking of content of TBL reports, not a benchmarking of actual economic, environmental, and social performance. Even the ticking off of content is troublesome because of the widely differing types and amounts of information being reported. In partnership with other organizations, the GRI has analyzed the reporting of human rights, labor practices, and community impact. For human rights, only 7% of the companies surveyed provided full conformity with the GRI core performance indicators (GRI & Roberts Environmental Center, 2008); only 11% followed the GRI protocol for society disclosures (GRI, University of Hong Kong & CSR Asia, 2008). In short, this study’s analysis of Ford and Volkswagen in the automotive industry; Citigroup and Barclays in financial services; Merck and Bayer in pharmaceuticals; Nike and adidas in the sporting goods industry, is very much in line with the overall state of sustainability reporting.

If one of the purposes of the G3 Guidelines is to allow us to compare and contrast companies and at the end of our analysis to be able to conclude that Ford’s environmental performance is better than Volkwagen’s or that Citigroup’s social performance is better than Barclays’, or that Merck is a better corporate citizen than Bayer, or that adidas manages its supply chain more responsibly than Nike, then the Guidelines have failed. Given the early stage of development of reporting under the GRI G3 Guidelines, it is premature to be too critical of the value that is being added by such reporting. Moreover, there will probably always be difficulty of interpreting core performance indicators even when they are consistently disclosed. As one survey of sustainability reports concludes:

At the same time, the problem may arise from the lack of an established means of assessing sustainability information in reports. It might then be said that the reports provide “too much information, too little meaning” (KPMG & SustainAbility, 2008, p. 29).
At least at this stage, we clearly have a long way to go before the equivalent of GAAP for sustainability reporting is established.
adidas Group (2008a). Giving 110%: Our effort to be a responsible business in 2007, accessed February 25, 2009, [available at].
adidas Group. (2008b). Striving to improve performance: 2007 corporate responsibilityreport (Web version), accessed February 25, 2009, [available at].
adidas Group. (2008c). GRI index, accessed February 25, 2009, [available at].
adidas Group. (2008d). Statement on verification, accessed February 25, 2009, [available at].
Barclays (2008a). Awards & plaudits, accessed February 25, 2009, [available at].
Barclays (2008b). External assurance, accessed February 25, 2009, [available at].
Barclays (2008c). GRI tables, accessed February 25, 2009, [available at.].

Barclays (2008d). Sustainability review 2007, accessed February 25, 2009, [available at.].
Bayer (2008a). GRI index, accessed February 25, 2009, [available at].
Bayer (2008b). Performance report, accessed February 25, 2009, [available at].
Bayer (2008c). Ratings, rankings, and awards, accessed February 25, 2009, [available at].
Bayer (2008d). Science for a better life: Sustainable development report 2007, accessed February 25, 2009, [available at].
Citigroup (2008a). Citizenship report 2007, accessed February 25, 2009, [available at].
Citigroup (2008b). GRI index, accessed February 25, 2009, [available at].
Clarkson, P.M., Y. Li, G. D. Richardson & F. P. Vasvari (2008). Revisiting the relation between environmental performance and environmental disclosure: an empirical analysis. Accounting, Organizations and Society. Volume 33, Issues 4-5, May-July 2008, pp. 303-327.

Volkswagen (2008a). Annual report 2007, accessed February 25, 2009, [available at].

Volkswagen (2008b). Sustainability Report 2007/2008: We are moving into the future responsibly, accessed February 25, 2009, [available at].

Table 1: Key performance indicators– GRI G3 framework (Core indicators in bold)

  • EC1: Direct economic value-generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings and payments to capital providers and customers

  • EC2: Financial implications and other risks and opportunities for the organization’s activities due to climate change

  • EC3: Coverage of the organization’s defined benefit plan obligations

  • EC4: Significant financial assistance received from the government

  • EC5: Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation

  • EC6: Policy, practices and proportion of spending on locally-based suppliers at significant locations of operations

  • EC7: Procedures for local hiring and proportion of senior management hired from the local community

  • EC8: Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement

  • EC9: Understanding and describing significant indirect economic impacts, including the extent of impacts


  • EN1: Materials used by weight or volume

  • EN2: Percentage of materials used that are recycled input materials

  • EN3: Direct energy consumption by primary energy source

  • EN4: Indirect energy consumption by primary source

  • EN5: Energy saved due to conservation and efficiency improvements

  • EN6: Initiatives to provide energy-efficient or renewable energy-based products and services and reductions in energy requirements as a result of these initiatives

  • EN7: Initiatives to reduce indirect energy consumption and reductions achieved

  • EN8: Total water withdrawal by source

  • EN9: Water sources significantly affected by withdrawal of water

  • EN10: Percentage and total volume of water recycled and reused

  • EN11: Location and size of land owned, leased, managed in, or adjacent to protected areas and areas of high biodiversity value outside protected areas

  • EN12: Descriptions of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas

  • EN13: Habitats protected or restored

  • EN14: Strategies, current actions, and future plans for managing impacts on biodiversity

  • EN15: Number of IUCN Red List species and national list species with habitats in areas affected by operations, by level of extinction risk

  • EN16: Total direct and indirect greenhouse gas emissions by weight

  • EN17: Other relevant indirect greenhouse gas emissions by weight

  • EN18: Initiatives to reduce greenhouse gas emissions and reductions achieved

  • EN19: Emissions of ozone-depleting substances by weight

  • EN20: NOx, Sox, and other significant air emissions by type and weight

  • EN21: Total water discharge by quality and destination

  • EN22: Total weight of waste by type and disposal method

  • EN23: Total number and volume of significant spills

  • EN24: Weight of transported, imported, or treated hazardous waste and percentage of transported waste shipped internationally

  • EN25: Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization’s discharges of water and runoff

  • EN26: Initiatives to mitigate environmental impacts of products and services, and the extent of impact mitigation

  • EN27: Percentage of products sold and their packaging materials that are reclaimed by category

  • EN28: Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

  • EN 29: Significant environmental impacts of transporting products and other goods and materials used for the organization’s operations, and transporting members of the workforce

  • EN30: Total environmental protection expenditures and investments by type


  • SO1: Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting

  • SO2: Percentage and total number of business units analyzed for risks related to corruption

  • SO3: Percentage of employees trained in the organization’s anti-corruption policies and procedures

  • SO4: Actions taken in response to incidents of corruption

  • SO5: Public policy positions and participation in public policy development and lobbying

  • SO6: Total value of financial and in-kind contributions to political parties, politicians, and related institution by country

  • SO7: Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes

  • SO8: Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations

Human Rights

  • HR1: Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening

  • HR2: Percentage of significant suppliers that have undergone screening on human rights and actions taken

  • HR3: Type of employee training on policies and procedures concerning aspects of human rights relevant to operations, including number of employees trained

  • HR4: Total number of incidents of discrimination and actions taken

  • HR5: Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk and actions taken to support these rights

  • HR6: Operations identified as having significant risk for incidents of child labor, and measures taken to contribute to the elimination of child labor

  • HR7: Operations identified as having significant risk for incidents of compulsory labor, and measures taken to contribute to the elimination of compulsory labor

  • HR8: Percentage of security personnel trained in organization’s policies or procedures regarding human rights

  • HR9: Total number of incidents of violations involving rights of indigenous people

Labor Practices & Decent Work

  • LA1: Total workforce by employment type, employment contract, and region

  • LA2: Total number and rate of employee turnover by age group, gender, and region

  • LA3: Benefits provided to full-time employees that are not provided to temporary or part-time employees

  • LA4: Percentage of employees covered by collective bargaining agreements

  • LA5: Minimum notice period(s) regarding operational chances

  • LA6: Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs

  • LA7: Rates of injury, occupational diseases, lost days, and absenteeism, and number of workforce fatalities by region

  • LA8: Education, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases

  • LA9: Health and safety topics covered in formal agreements with trade unions

  • LA 10: Average hours of training per year per employee by employee category

  • LA 11: Programs for skills management and lifelong learning that support continued employability of employees and assist them in managing career endings

  • LA12: Percentage of employees receiving regular performance and career development reviews

  • LA13: Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity

  • LA14: Ratio of basic salary of men to women by employee category

Product Responsibility

  • PR1: Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and service categories subject to such procedures

  • PR2: Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, and their outcomes

  • PR3: Type of product and service information required by procedures and percentage of significant products and service categories subject to such procedures

  • PR4: Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, and their outcomes

  • PR5: Practices related to customer satisfaction, including the results of surveys measuring customer satisfaction

  • PR6: Programs for adherence to laws, standards, and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship

  • PR7: Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type or outcome

  • PR8: Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data

  • PR9: Monetary value of significant fines for noncompliance with laws and regulations concerning the provision and use of products and services

Table 2: Levels of reporting

  • For Application Level A:

Profile Disclosures: All.

Management Approach Disclosures: All.

Performance Indicators: Each core Indicator through the use of the Materiality Reporting Principle. This will also apply to Sector Supplements that are in final version. Currently, there are no Sector Supplements in final version. However, GRI recommends organizations use relevant Sector Supplements for reporting at each Level. 

Reasons for omissions are required in case of not on reporting certain Core Performance Indicators.


  • For Application Level B:

Profile Disclosures: All.

Management Approach Disclosures: All.

Performance Indicators: At minimum 20 Performance Indicators, either core or additional, including at least one from each Indicator Category (Economic, Environmental, Human Rights, Labor, Society, and Product Responsibility).

No "reasons for omission" possible.


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