STUDY SESSION 06

S H E M A L M U S TA P H A
 SO FAR IN F3

• SESSION 01 – PRIMARY OBJECTIVE? SWM, VFM

• SESSION 02 – INVESTING, FINANCING, DIVIDEND &
STAKEHOLDER MANAGEMENT
• SESSION 03 – CONSTRAINTS  BUSINESS AND
ECONOMIC VARIABLES
• SESSION 04 – INTEREST/PURCHASING PARITY AND
FISHER EFFECT
• SESSION 05 – MEASURING SWM  RETURNS, RATIOS,
CASH FORECASTING
SESSION SUMMARY
 LIMITATIONS ON FINANCIAL
REPORTING
• LESS ACCURATE PREDICTOR OF FUTURE PERFORMANCE

• LACK OF QUALITATIVE INFORMATION

• LOSS OF KEY CUSTOMERS, CHANGES TO THE BOARD

• LACK OF DISCLOSURE IN TERMS OF FUTURE PROSPECTS –

• R AND D AND NEW STRATEGIES ETC NOT SUFFICIENTLY HIGHLIGHTED

• MANIPULATIONS

• OFF BALANCE-SHEET FINANCING – KEEP CAPEX OFF-BS so that D/E is

LOW
• OPERATING LEASES(RENT) OVER FINANCIAL LEASES
• SPECIAL PURPOSE VEHICLE (SPV)
NON-FINANCIAL INFORMATION CAN BE
REPORTED IN A FEW WAYS
• GLOBAL REPORTING INITIATIVE (GRI)

• INTERNATIONAL INTEGRATED REPORTING COUNCIL

(IIRC)
 GRI

• APPLICABLE TO ALL ENTITIES INCLUDING SMALL AND

MEDIUM ENTERPRISES (SMEs) AND NOT FOR PROFIT
ORGANISATIONS.

• CONTAINS,
• PRINCIPLES – HELPS TO DEFINE REPORT CONTENT, QUALITY AND
BOUNDARY
• DISCLOSURES – ON MANAGEMENT OF ISSUES, PERFORMANCE
INDICATORS

• MANDATORY IN SOME JURISDICTIONS, VOLUNTARY IN

OTHERS
 G4 (THE 4TH VERSION OF GRI) GUIDELINES

• SUSTAINABILITY REPORTING AS A STANDARD

PRACTICE (i.e. MAKE IT A NORM THAN AN
EXCEPTION)
• MATERIALITY EMPHASIS
• FOCUS ON MATTERS THAT ARE MATERIAL TO THE
ORGANISATION AND STAKEHOLDERS
• EXPLAIN OMISSIONS OF DISCLOSURES
• ENHANCED DISCLOSURES ON,
• MANAGEMENT APPROACH, ANTI-CORRUPTION, GREEN-
HOUSE GAS EMISSIONS, GOVERNANCE, REMUNERATION.
OVERVIEW OF GRI – SECTION 1 AND 2

• EXPLAINS,
• THE PURPOSE OF THE GUIDELINES AND;
• HOW TO USE THE GUIDELINES
 OVERVIEW OF GRI – SECTION 3
‘CRITERIA’
• EXPLAINS THE CRITERIA TO BE APPLIED TO PREPARE
ITS SUSTAINABILITY REPORT

• CORE DISCLOSURES
• COMMUNICATE THE IMPACT OF THE ORGANIZATIONS
ECONOMIC, ENVIRONMENTAL, SOCIAL AND
GOVERNANCE PERFORMANCE
• COMPREHENSIVE DISCLOSURES
• BUILD ON THE CORE OPTION THROUGH ADDITIONAL
STANDARD DISCLOSURES ON THE ORGANIZATIONS
STRATEGY AND ANALYSIS, GOVERNANCE, INTEGRITY,
AND ETHICS
 OVERVIEW OF GRI – SECTION 4
‘REPORTING PRINCIPLES’
• REPORT CONTENT (WHAT TO INCLUDE)
• STAKEHOLDER INCLUSIVENESS
• SUSTAINABILITY CONTEXT
• MATERIALITY
• COMPLETENESS
• NON-DISCLOSURE
• REPORT QUALITY (HOW TO INCLUDE)
• BALANCE
• COMPARABILITY
• ACCURACY
• TIMELINESS
• CLARITY
• RELIABILITY
 OVERVIEW OF GRI – SECTION 5
STANDARD DISCLOSURES
• GENERAL STANDARD DISCLOSURES
• Strategy and Analysis of the entity
• Organizational profile
• Identified Material Aspects and Boundaries
• Stakeholder engagement
• Report profile
• Governance
• Ethics and Integrity

• SPECIFIC STANDARD DISCLOSURES

• DISCLOSURES ON MANAGEMENT APPROACH
• INDICATORS,
• ECONOMIC - % LOCAL SUPPLIERS, WAGE RATES, PENSION , %LOCAL WORKFORCE
• ENVIRONMENTAL – BIO DIVERSITY, ENERGY, WATER, EMISSIONS, WASTE
• SOCIAL – HUMAN RIGHT POSSIBILITIES, LABOUR POLICIES
 OVERVIEW OF GRI – SECTION 6 AND 7
LINK WITH OTHER SUSTAINABILITY REPORTING
GUIDELINES

• These final sections show how the G4 guidelines link to other

sustainability reporting guidelines such as the OECD
guidelines for Multinational Enterprises, and the UN’s
Guidelines on Business and Human Rights.
GRI – OVERVIEW SUMMARY
SECTION 1 AND 2
• PURPOSE OF EXISTENCE
• HOW TO USE

SECTION 3 – CRITERIA
• CORE DISCLOSURES
• COMPREHENSIVE DISCLOSURES

SECTION 4 - PRINCIPLES
• REPORT CONTENT
• REPORT QUALITY

SECTION 5 – STANDARD DISCLOSURES

• GENERAL DISCLOSURES
• SPECIFIC STANDARD DISCLOSURES  MANAGEMENT APPROACH + INDICATORS

SECTION 6 AND 7
• LINK WITH OTHERS
HOW TO PUT TOGETHER A GRI REPORT

• STEP 1 – IDENTIFICATION
• IDENTIFY TOPICS OF INTEREST
• STEP 2 – PRIORITIZATION
• PRIORITIZE BASED ON MATERIALITY, STAKEHOLDER
INCLUSIVENESS AND RELEVANCE
• COMBINE THEM IF POSSIBLE
• STEP 3 – VALIDATION
• ASSESS COMPLETENESS OF DISCUSSION IN ITEMS
• GATHER MORE INFORMATION,
• VALIDATE UPON CONSULTING SENIOR MANAGEMENT
• STEP 4 – REVIEW
• REVIEW THE ASPECTS THAT WERE MATERIAL IN PAST PERIODS AND
FEED THEM AS NEW INFORMATION TO THE NEXT PERIOD.