The G.4 – Part 1 of 3 – Major Transparency Shift on Extended Responsibility in Supply Chains

October 9, 2012 EcoVadis

The second part of the G4 project public comment session ended on September 25th and received more than 1263 formal feedback.The new Guidelines are planned to be released in May 2013, provided they are accepted by the GRI’s governance bodies. The G4 draft provides a comprehensive insight on the upcoming GRI reporting framework.

With the GRI Guidelines being the de facto sustainability reporting framework, the addition of supply chain key performance indicators is a clear indication of the maturity of sustainable procurement. This sustainable procurement maturity is also exemplified by the addition of new supply chain questions for the Dow Jones Sustainability Index, launched for the last round of DJSI questionnaires earlier this year.

Among the main revisions or innovations is an overwhelming focus on supply chain issues, now put at the heart of the guidelines.  The G4 project can be announced as an unprecedented step towards corporate accountability in supply chains, even if at this stage, the massive reporting requirements exposed in the G4 draft may cast some doubts on practical implementation and thus adherence from reporting companies.

Profound revisions from G3 to G4

The G3 guidelines already made, on occasion, some reference to supply chains. Suppliers were included among the main corporate stakeholders to engage with. The definition of the Report Boundary would include a non-mandatory reference to upstream and downstream suppliers along with the fuzzy notion of “significant influence”. Specific indicators in the G.3 would focus on local locally based procurement (e.g. local spending), human rights screening or green energy purchasing.

The G3.1 introduced more specific information on supply chain management by adding three new sections on Organizational Risk Assessment, Impact Assessment, and Monitoring-follow-up-Remediation. Those sections focused exclusively on the human right category, with some explicit mention of sourcing and purchasing practices.

 

Now, the G4 development project puts supply chain transparency at the core of its reporting structure. This is shown for example by the occurrence of the term “supplier” which is referred to more than 400 times whereas it was less than 70 times in the G3.1.

This article was written by Simon Gargonne, CSR analyst at Ecovadis

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Top picture Flickr Creative Commons epSoS.de

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