The Transparency Advancement Tool coincides with a report, also published today, which finds that companies are spending too much time and resources creating lengthy reports that few read, noting that it is time to start a new type of reporting and transparency that has a greater impact on improving performance.
However, the report notes that in order for transparency to instigate change, companies must increase their efforts on three transparency elements: materiality, valuation of externalities and integration.
The elements are summarized as follows:
- Materiality: A focus on gathering and providing information on the most material issues enables companies to refine their sustainability strategy, integrate material issues into the company’s larger corporate strategy and tighten reporting efforts to better communicate to stakeholders on the most critical issues.
- Externalities: Having identified the most material issues, a company can begin to measure externalities relevant to these issues. This data empowers companies to fully understand and communicate their role in creating value in the environment, society and the economy.
- Integration: Having prioritized the most strategic material issues and accounted for the externalities related to them, a company can use this information to better integrate sustainability into corporate strategy. True integration enables companies to leverage their business model for sustainable value creation.
The Transparency Advancement Tool illustrates how materiality supports externalities valuation, and then how those two elements in combination support the integration of sustainability information into decision making and core strategy.
The Global Reporting Initiative has also launched a new service to help improve the usability and transparency of data in sustainability reports.
GRI says the Content Index Service is its most detailed service for G4-based reports, and includes all of the disclosures in the GRI G4 Content Index. The Service verifies that the GRI Content Index is accurate and this helps improve the transparency and usability of GRI reports.