Memorandum of Understanding between UNGC & GRI Celebrated At UN Global Compact Summit

On 24 June, a special event took place during the UNGC Leaders Summit in New York, to highlight and begin action on the important collaboration between the UNGC and GRI, regarding the agreed terms of the Memorandum of Understanding signed on 28 May 2010 at the Amsterdam Global Conference on Sustainability and Transparency.

Under the terms of the MoU, GRI, subject to due process, will centrally integrate the Global Compact’s ten principles and issue areas in the next iteration of its Sustainability Reporting Guidelines. Correspondingly, the Global Compact will adopt the GRI Guidelines as the recommended reporting framework for companies to communicate on progress made.

The alliance represents a unique opportunity to provide a clear roadmap to sustainability, and to change business practices on a global scale. The 24 June special event gave space to the representatives from each of the organizations along with global business leaders to discuss the implications of this collaboration as well as upcoming activities: the two initiatives will join forces to develop guidance on the use of GRI as the recommended reporting language for the Global Compact Communications on Progress and collaborate at the local level on outreach and training to increase the quantity and quality of reporting, with a special focus on less developed markets and medium to smaller companies.

The convergence of both initiatives will also help mainstream transparency and accountability around environmental, social and governance (ESG) factors and will provide a framework for financial analysts and other stakeholders to identify extra- financial opportunities and risks.

The agreement is intended to provide companies in the Global Compact with a clear set of reporting principles and indicators to meet the initiative’s compulsory annual disclosure requirement, also known as the Communication on Progress. The GRI Reporting Framework is applicable to organizations of all sectors, sizes and regions and also offers a series of supplements developed to address sector-specific circumstances and challenges.

The two initiatives enter into this new alignment to further develop their combined strengths – the Global Compact’s strategic advancement of key sustainability issues, and GRI’s reporting framework.

In addition to creating a reporting framework that will be implemented universally, the new collaboration is also intended to provide a benchmark for financial analysts and other stakeholders to better analyze and identify risks and opportunities as they relate to environmental, social and governance (ESG) issues.