GRI Brief

1. GRI Brief Social Performance Task Force Meeting Teodorina Lessidrenska, GRI Associate, Triodos-FACET Consultant on TBL&SR 18 June 2008, Paris, France

2. GRI in a nutshellwww.globalreporting.org • Globally accepted standard for SR by any type organisation • More than 4,000 reporters (+1500 officially registered across +50 countries) • Developed by the stakeholders for the stakeholders • Continues improvement- through open multi-stakeholder process balanced within and across sectors and regions (3 revisions since 2000) • GRI Secretariat - facilitates the network&responsible for quality control • Independant Institution – multistakeholder governance/diverse, balanced funding

3. GRI SR Standard in a nutshellwww.globalreporting.org • Voluntary, but growing pressure for mandatory approach • GRI Standard elements: 1) SR Guidelines (G3) - reporting principles and guidance, disclosures on org. strategy/profile/governance/report&process, environmental, social and economic performance indicators and managementdisclosures (DMA), with indicator protocols; 2) Sector Supplements; 3) National Annexes; 4) issue focused documents (SMEs, Climate Change, etc.) • Harmonisation with: CSR initiatives (GC), Equator Principles, Sustainability Indexes; financial accountancy&reporting (EU Accountancy/Sox); CG codes; key issues (Climate Change, MDG, Water, AIDS, etc.); coming – ISO 26000 Governmental endorsement – WSSD • Semi-flexible application–indicators selection and “adopt or explain” rule;focus on past performance, and targets/commitments to future performance improvements

4. GRI Sector Supplements • Developed by each sector with GRI as provider of process structure,facilitation, end product and process quality control, and alignment with the GRI Standard • Integrate the relevant initiatives developed within each sector and the available TBL experience &best practices • Address the sector-specific issues of importance for the sector’s stakeholders

5. GRI Guidelines (G3) SO1: Nature, scope, and effectiveness of any programs and practices that assess and manage impacts of operations on the communities Financial Sector Supplement PR impact/Ind. #6: Monetary value of products and services designedto deliver a specific social benefit SO&community/Ind. #9: Access to financial services in low-populated oreconomically disadvantaged areas by type of access MFI- specific SP data (not addressed by GRI): Impacts of services and products: on quality of life for clients (income, assets, savings, education, etc.); at enterprise level (generated employment) at community level Geographic breakdown of markets; geographic spread of services Customer and product/service profile Outrech measurement Client satisfaction and retention Performance Indicators dynamics

6. GRI Supplement development • Leader/s emerge within the sector and convene key players • Sectoral leader/s approach GRI, propose SS development and ensure funding • GRI in collaboration with the sectoral leader/s sets up a standardised SS development process: • global balanced multi-stakeholder working group • GRI co-coordinates the WG activities, co-facilitates WG discussions, assists with content to ensure linkages with GRI portfolio and quality control • SS draft for pilot test, revisions by WG, and finalisation • Full scale SS - finalisation by GRI TAC and BOD • Annexes to existing SS - softer requirements time-wise and resources-wise

7. Why sectors choose the GRI supplement development process? Efficiency and quality of the tested and globally accepted GRI process and product Alignment of the sector’s initiatives with the global gold standard across all sectors ensures: • Global multistakeholder consensus • Standardisation of TBL measurement, reporting, and language within the sector and with the other sectors • Credibility and visibility • Global reach and strong uptake within the sector • Impact on the global debate and agenda, access to best practices&trends, influence on global/national policies

8. SPTF priorities in regard with GRI • Attention to social and financial/economic performance and impacts, but also to environmental aspects – movement toward TBL? • Governance included – required by GRI • Linkages to management and strategy are key • Need to be applicable to different type and size organisations (all MFIs: MFNGOs--MFbanks; GRI also to SMEs, governmental inst., banks, MNCs...) • Practical, cost efficient reporting approach • Should match info users’ needs • Stakeholder/practitioners’ endorsement • Need to address multistakeholder needs and expectations • Definitions and language challenge • Info collection methodology and tools needed for implemetation • Verification • Emerging “reporting engines” and other service-oriented players

9. Gap analysis of G3/FSS re MFI needs • The social aspects are partially addressed by GRI and FSS – there are areas of overlap with MFS initiatves that need clarification and further development/more depth • The GRI is not addressing: • impact measurement/analysis • specifics of MF bank’s organisational and client profille, social goals, mission, systems and policies for management of social impact and performance These gaps can be resolved in regard with the whole FS with MF sector taking the lead and bringing its learning and knowledge in social impact analysis.

10. What direction MFS will take re Performance and Impact Measurement&Reporting? Opportunistic developments? • Some MFIs use SPTF SPIs, in some cases with added GRI environmental indicators, and different reporting frameworks continue to evolve • Some MFIs use the GRI, with added SPIs to fill the gaps re performance and impacts on clients and communities • MFIs and FIs use different indicators and tools Take the leadership and integrate MF indicators into GRI? • MFI leadership to convene key players from MFS, financial and other related sectors to work with GRI on integration of the SPTF work and development of MF annex within the GRI FSS for use by the whole financial sector Other?

11. Thank You! Web: www.globalreporting.org Email: lessidrenska@globalreporting.org tlessidrenska@earthlink.net

12. The future of SR – the financial accountant’s perspective • Standardisation*An accelerating shift towards common formats for non-financial reporting (GRI) • Regulation*Emergence of government mandated non-financial reporting • Integration* • Growing attempts to merge, or blend, much of non-financial reporting with financial reporting Source: KPMG International Survey of CSR Reporting 2005 *from S&P, SA and UNEP: Risk and Opportunity

13. GRI process: evolving Guidelines (three revision cycles since 1999) G3 Guidelines released Future development International sneak peeks Collaborative working groups Structured feedback process on 2002 guidelines 2003 2004 2005 2006 G3 Development Process (2002-2006)

14. Why a MFI Considers Using GRI? Mission and strategy alignment with market and global trends • “Data and goals for social, economic and environmental performance and impact – part of the whole management system” • Quality management responsive to dynamic and complex business environment Branding, reputation and visibility • “Able to distinguish ourselves from the other MFIs and commercial banks” • Recognition by international and local clients, investors NGOs, communities, etc. Improved services (products) • “ We are learning from the ongoing dialogue with our clients” • “Brings ideas re improvement of our services or development of new products” Transparency and accountability in line with the global standards • Improved dialogue with shareholders and other stakeholders • Improved shareholder confidence - informed and engaged shareholders Efficient, flexible multi-purpose tool • “GRI offers tested and globally accepted process and product” • Flexible application of the Guidelines in conjunction with sector supplements • Multidimentional application for management, internal dialogue, reporting, marketing and stakeholder dialogue on sustainability

15. Global trends toward SM as element of CSR/SB • Social/env/economic=TBL (SB) • Language • Change in roles of players (govmt/bussiness/CS) • Balanced multistakeholder consultations and consensus building processes • Alignment and linkages with the financial and organisational management, and corporate governance • Connectivity, harmonisation of initiatives and systems=simplification, unification, standardisation

16. Ad-hock/firefighting approach Reactive/compliance based strategies Charity/donations to community Separation from financial aspects and everyday business Dealt internally only PR focused/keep problems internally Comprehensive/strategic planning Proactive/solutions&opportiunities based Community engagement/partnerships Integrated with overall business strategies, management, operations Engage with stakeholders Transparency/accountability through standardised TBL reporting Trends in SM implementation on organisational (micro) level Moving from: To TBL strategy basics: ..and from exclusively used by large global corporations/banks toward expected from all types/sizes banks/organisations

17. Key observations for growing SM/SR interest in 2006-2007 • UN and institutional investors launch PRI, 05/06 (93 signatories, rep. more than US$3 trillion)– reached up 8 trillion in assets by May 2007. • Equator principles revised (alignment with the new IFC policies), Summer 2006 – growing # signatories in 2007 • Insurance industry adopts climate change policies; 190 new innovative products and services currently available from dozens insurance providers in 16 countries (CERES report, 06/07) • UNEP FI - number of publications: SM and Reporting (12/06), 2007 Report: Banking on Value – A new approach to credit risk in Africa; Report: RI in Focus - How leading public pension funds are meeting the challenge (04/07) • MFI sector: Microcredit Summit 2006 –focus on DBL/MDG; critical evaluation of real impacts and value created by MFIs (CristianAid/UK, 06); GreenMF initiatives expand and convene discussions on TBL MF agenda; traditional banks flood the MFI market, playing out the SB message; CSR/ESG/SR and SB still new but gaining popularity among MF banks

18. Leveraging investment – SRI fund managers see GRI as best practice ISIS Asset Management. Quarterly Report, March 2004

19. Investors Expect Information about Sustainability “ …a company’s GRI report should be the first place investors and research institutions consult for information… ” SIGNATORIES – $50 billion:Boston Common Asset Management, LLC - Calvert Group - Christian Brothers Investment Services - Citizens Advisers Inc. - Domini Social Investments - Dreyfus Premier Third Century Fund, Inc. / Dreyfus Socially Responsible Growth Fund, Inc. - Ethical Funds -Green Century Funds - ISIS Asset Management - Mennonite Mutual Aid - Neuberger Berman Socially Responsive Investing - Real Assets - Trillium Asset Management Corporation - Pax World Funds - The Pension Boards - UCC United Church Foundation - Progressive Asset Management, Inc. - Walden Asset Management, a division of Boston Trust & Investment Management SUPPORTING ORGANIZATIONS: Coalition for Environmentally Responsible Economies (CERES) - Innovest Strategic Value Advisors, Inc.- Interfaith Center on Corporate Responsibility (ICCR)- Investor Research Responsibility Center, Inc. (IRRC) - KLD Research & Analytics, Inc. - Jantzi Research Inc.

20. TSF Project A GRI/Triodos initiative introducing sustainability and GRI reporting and management to MFI through: coaching/direct hands on assistance and creation of a learning network. Coming: WWW information exchange platform; trainings, practical tools and guiding materials development. Participating MFIs: • Acleda (Cambodia) • Banco Solidario (Equador) • Centenary (Uganda) • FIE (Bolivia) • Findesa (Nicaragua) • K-Rep (Kenya) • Akiba (Tanzania) • XAC Bank (Mongolia) • Mibanco (Peru) • BSF; Share Microfin; Bellwether (India) MFI

21. The GRI reporting process and application levels Reportiing organisation/internal stakeholders (1,2,3,5,6,9) Reporter’s External stakeholders (2,3,9) Assurance provider (4, 9) Assurance stakeholder panel (4, 9) 1. PLAN 3. REPORT 2. MEASURE 4. Assurance 5 Interpretation 6.Dissemination 9. Mgmt & strategy change 7. Feedback 8.benchmarking REPORTER’S GRI APPLICATION LEVELS CHECK C. Beginner B. Mid level A.Experienced GRI Secretariat Assurance providers External party Reporter-self assessment Reportiing organisation/internal stakeholders (7,9) External stakeholders (7, 9)