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January 25, 2011
Global Reporting Initiative to Launch US Operation
    by Robert Kropp

GRI's Focal Point US, scheduled to launch on January 31 at the New York Stock Exchange, seeks to increase the number of US companies using its standardized framework for sustainability reporting.

A fact that may be little known about the Global Reporting Initiative (GRI) is that it got its start in the US. In a 2007 briefing paper, the organization, whose sustainability reporting framework is the most widely used in the world, noted, "GRI has its roots within the Boston based nonprofits Ceres and the Tellus Institute."

"Initially the North American market was unreceptive," the paper continued, and in 2002 GRI relocated its headquarters to Amsterdam. In a sense, the growth of GRI has now come full circle, as in October it announced the establishment of its
GRI Focal Point United States. Based at The Conference Board in New York City, Focal Point US is headed by Director Mike Wallace. spoke with Wallace about the initiative, as well as the official launch scheduled for January 31 at the
New York Stock Exchange (NYSE).

"After I took this position 14 months ago, Executive Director Ernst Ligteringen and I came over to meet directly with Mary Schapiro of the Securities and Exchange Commission (SEC) in September of 2009," Wallace said. "The
Social Investment Forum (SIF) has been instrumental in continually writing to the SEC about broader environmental, social, and corporate governance (ESG) issues, and it was in large part because of their efforts that we were able to get that kind of meeting."

"We also met with EPA that week, the State Department, and the White House Council on Environmental Quality," Wallace continued. "In New York, we met with the Big Four accounting firms, and they all thought that the market was growing and that it was time for GRI to have an office in the US."

In fact, the Big FouróDeloitte, Ernst & Young, KPMG, and PwCóhave agreed to be founding sponsors of GRI Focal Point US.

Wallace and Ligteringen also met with several ESG research and rating firms, and Wallace observed, "There's GRI DNA inside all of these research approaches, but most of them don't share that story as readily as we had hoped. We needed to get them to talk about it more publicly."

Asked about the number of companies worldwide now using GRI standards for sustainability reporting, Wallace said, "For 2009, we have 1,352 organizations on our
Reports List. But in discussions with CRD Analytics and Bloomberg, they've told us that between two and four thousand companies are referencing GRI in their reports."

According to GRI, the United States, with 132 companies using the framework, was the second largest GRI reporting country in 2009. However, the organization observed, "In 2008, less than 14 percent of the sustainability reports listed on the GRI Reports List were from US companies, and this percentage was even lower in 2009, at 12.2 percent. In comparison, 45 percent of the reports in both 2008 and 2009 came from European organizations."

"More than 75% of the Global 250 use GRI for reporting," Wallace said.

In the US, "We have a pretty strong regulatory system in this country, and companies already report on a variety of financial and non-financial metrics," he continued. "But there's confusion in the marketplace, and companies are confused as to what they should do. Rather than download the freely available guidelines that were built by their peers and used by many of their peers, companies are tending to move toward the quick and easy fix of PR and marketing."

While more than half of S&P 100 companies reference GRI in their sustainability reports, according to a
2009 report from SIF, the uptake by small and medium enterprises (SMEs) is considerably less, as they lack the resources large companies have to devote to sustainability reporting.

Wallace said, "We've developed tools like the Level C template, to help smaller companies get started." The Level C template allows smaller companies to report on a limited number of indicators, and does not require disclosure of management approaches.

As more large companies require SMEs in their supply chains to issue sustainability reports, the Level C template should help SMEs to issue such reports in a standardized format. As an example of corporate engagement with suppliers on the issue, Wallace pointed to an initiative by Puma, which, he said, "Actually went out and trained the SMEs in its supply chain on how to do GRI reporting."

With the launch of Focal Point USA, Wallace said, "We expect to see a rise in the number of reports based on the GRI Guidelines this year. GRI's mission is to mainstream ESG reporting globally. GRI's new Focal Point USA is in place to support US companies with the ambition to the lead the way to a sustainable economy."

The official launch of Focal Point USA on January 31 at the New York headquarters of NYSE Euronext will include a panel of speakers from Bloomberg, Avon, UPS, Marriott, NYSE Euronext, and Ceres, who will seek, according to GRI, to address the question, "Why is America letting the world lead in sustainability reporting?"

"Last year, the New York Stock Exchange did its first sustainability report, using the GRI Guidelines, and at the launch it will describe its own journey," Wallace added.


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