Approach for reporting on ecosystem services - BIP Indicators

opicsendsoolsGRI Research & Development<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong>on ecosystem servicesIncorporating ecosystem servicesThe Amsterdam Global Conference oninto Topics an organization’sTopicsMay 7-9 2008TopicsTopicsper<strong>for</strong>mance Sustainability Reporting Today: disclosureThe Readers’ VerdictGRIGRIResearchResearch &DevelopmentDevelopmentSeriesSeriesReportingPracticesToolsTrendsGRI Research & DevelopmentGRI Research & Development SeriesGRI Research & Development SeriesReportingPracticesReportingPracticesToolsToolsThis document is available <strong>for</strong> free download on www.global<strong>reporting</strong>.orgToolsGRI Research & Development SeriesTopicsReportingPracticesTools

Sustainability Reporting Today: The Readers’ VerdictGRI Research & DevelopmentAbout GRI’s Research andDevelopment PublicationSeriesGRI’s research and development program supportsGRI’s commitment to the continuous improvementof its Reporting Framework by investigatingchallenging issues around <strong>reporting</strong> and innovatingnew ways to apply the GRI Reporting Framework inconjunction with other standards.Publications in the GRI Research and DevelopmentSeries are presented in three categories:TopicsReportingPracticesToolsResearch and implications on <strong>reporting</strong>related to subjects such as biodiversityand genderTracking of <strong>reporting</strong> practices,implementation of the GRI ReportingFramework and assessing new scenariosGuidance <strong>for</strong> using the GRI ReportingFramework in combination with otherstandardsThis document <strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystemservices falls under the “Reporting Practices”category.CopyrightThis document is copyright-protected by StichtingGlobal Reporting Initiative (GRI). The reproductionand distribution of this document <strong>for</strong> in<strong>for</strong>mationis permitted without prior permission from GRI.However, neither this document nor any extractfrom it may be reproduced, stored, translated, ortransferred in any <strong>for</strong>m or by any means (electronic,mechanical, photocopies, recorded, or otherwise)<strong>for</strong> any other purpose without prior writtenpermission from GRI.Global Reporting Initiative, the Global ReportingInitiative logo, Sustainability Reporting Guidelines,and GRI are trademarks of the Global ReportingInitiative.© 2011 GRIISBN number: 978-90-8866-0528The authors gratefully acknowledge the financial support from:2© 2011 GRI

AcknowledgementGlobal Reporting Initiative (GRI) is a network-basednon-governmental organization that aims todrive sustainability <strong>reporting</strong> by all organizations.GRI produces the world’s most widely usedSustainability Reporting Framework to enable thisdrive towards greater transparency. The Framework,incorporating the Reporting Guidelines, sets out thePrinciples and Indicators organizations can use tomeasure and report their economic, environmental,and social per<strong>for</strong>mance. GRI is committed tocontinuously improving and increasing the use ofthe Guidelines, which are freely available to thepublic.GRI was founded in the US in 1997 by CERES andthe United Nations Environment Program (UNEP)and was originally based in Boston, Massachusetts.In 2002, GRI moved its central office to Amsterdam,where the Secretariat is currently located. GRI alsohas regional ‘Focal Points’ in Australia, Brazil, China,India and the USA.Editor:Jack BoulterDesigner:Tuuli Sauren,INSPIRIT International Communications,The Sustainable Design and Promotion group,Brussels, BelgiumGlobal Reporting InitiativeSean Gilbert (left GRI in June 2011)Maaike FleurUnited Nations EnvironmentProgramme World ConservationMonitoring CentreUNEP-WCMC is the specialist biodiversityin<strong>for</strong>mation and assessment centre of the UnitedNations Environment Programme (UNEP), runcollaboratively with WCMC, a UK charity, basedin Cambridge, U.K. UNEP-WCMC’s mission isto evaluate and highlight the many values ofbiodiversity and put authoritative biodiversityknowledge at the centre of decision-making. Sinceits establishment in the 1970s, the Centre has beenat the <strong>for</strong>efront of the compilation, management,analysis and dissemination of global biodiversityin<strong>for</strong>mation, and has an outstanding record ofachievement.www.unep-wcmc.orgMônica Barcellos HarrisSharon BrooksTristan TyrrellCREM BVCREM offers consultancy, research and trainingin the field of sustainable development oninternational, national and local level. Our key areasof expertise include CSR and chain management,biodiversity and natural resources, local sustainabledevelopment and waste management. Started out in1989 CREM’s team currently consists of around 30dedicated consultants with a multidisciplinarybackground and a broad international experience.www.crem.nlWijnand BroerJolanda van Schaick1GRI Research andDevelopment SeriesI Research & Development<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosureTopicsReportingPractices

Sustainability Reporting Today: The Readers’ Verdict2© 2011 GRI

Table of ContentsExecutive Summary 4Glossary of terms in this paper 61. Introduction 101.1. Background 101.2. Ecosystem services and <strong>reporting</strong> 101.3. Document structure 112. What are ecosystem servicesand how do they relate toorganizations? 122.1. Introduction 122.2. What are ecosystem services? 122.2.1. Defining ecosystem services 122.2.2. Delivery of ecosystem services 122.3. Classification of ecosystem services 142.4. The linkages betweenorganizations and ecosystems:impacts, dependencies andresponses 143. Reporting on per<strong>for</strong>mance inrelation to ecosystem services 193.1. Introduction 193.2. Narrative <strong>reporting</strong> on strategyand management 193.3. Per<strong>for</strong>mance <strong>reporting</strong> 203.3.1. GRI Per<strong>for</strong>mance Indicators 203.3.2. Challenges to developing ecosystemservices per<strong>for</strong>mance indicators 203.3.3. Strategies <strong>for</strong> developing ESper<strong>for</strong>mance indicators 223.3.4. Example <strong>reporting</strong> indicators in thefield of ecosystem services 233.3.5. Framing per<strong>for</strong>mance data into anecosystem service context 314. Ecosystem services in futureGRI <strong>reporting</strong> guidance 33References 35Annex I: Acknowledgements 36Annex II: Reference to ecosystem servicesin GRI Sector Supplements 37<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosure3GRI Research andDevelopment SeriesI Research & DevelopmentTopicsReportingPractices

Sustainability Reporting Today: The Readers’ VerdictExecutive SummaryOrganizations around the world interact withthe ecosystems around them: having positive ornegative impact, and reaping benefits. ‘Ecosystemservices’ (ES) is a term used to capture the benefitsthat people derive from ecosystems, such as food,pharmaceutical products, timber, soil fertility,pollination, and freshwater. This publicationelaborates on what ES are, and in which waysorganizations interact with them. Companiesimpacting the services that ecosystems bringare increasingly aware of the need to factor ESinto their long term strategy and operations, andmanage them responsibly.Ecosystems services has become an importantdefinition. The idea of defining the “services” thatecosystems offer to business and society wasconsidered essential to highlight the importanceof ecosystems to the existence of products andservices, as well as to the quality of life of all people.Because of the global scale of the current economicdevelopment model, the health and existence ofecosystems is under pressure. In order to accessmore and scarce natural resources, to extendalready large production scales and to growurban areas, society’s activities are expandingand profoundly changing ecosystems’ power ofregeneration.This is a pressing topic <strong>for</strong> companies now andwill be <strong>for</strong> many generations to come: how toguarantee society’s activities and the maintenanceof ecosystems at the same time. Because of that,impacts on ecosystems tend to be a very prominenttopic when companies report about theircontribution to the future of society, and about therisks they run as a business.In cooperation with the United NationsEnvironment Programme World ConservationMonitoring Centre (UNEP-WCMC) and consultancyCREM, the Global Reporting Initiative (GRI) hasbeen assessing opportunities to translate emergingthinking around ES into sustainability <strong>reporting</strong>indicators and approaches that can be used as astarting point by organizations in all sectors.The linkages between organizations and ES arenumerous and can be described through impacts,whereby an organization’s activities cause a positiveor negative change to ecosystems and theircapacity to supply services, and dependencies,whereby an organization relies on regular andstable provision of particular ES <strong>for</strong> the continuationof its operations. Impacts and dependenciesmay move an organization to undertake actionsthat change its relationship to ecosystems andtheir services. Organizations respond to changesin ES through a range of means, such as impactmitigation strategies and substitution strategies toreduce dependency.The approach of the current GRI Guidelines hasbeen used as a basis <strong>for</strong> assessing options to reporton ES. A distinction has been made betweennarrative <strong>reporting</strong> on strategy and management,and data <strong>reporting</strong> on per<strong>for</strong>mance.Narrative <strong>reporting</strong> on strategy andmanagement can be used to elicit the basicin<strong>for</strong>mation <strong>for</strong> stakeholders to understand anorganization’s relationships to ES. It may challengeorganizations to systematically assess the benefitsthey receive from the natural environment inthe context of ES, their dependence on suchbenefits to continue their activities, any impactson the supply of ES or on other beneficiaries ofES, and the economic risk they run under currentmanagement regimes. Reporting on ES will alsoenable organizations to communicate their actionsin response to ES per<strong>for</strong>mance.Per<strong>for</strong>mance <strong>reporting</strong> contains unique,individual pieces of numerical in<strong>for</strong>mation thatwill change year to year and may reveal trends.Current <strong>reporting</strong> in line with the EnvironmentalPer<strong>for</strong>mance Indicators of the GRI Guidelinesreveals in<strong>for</strong>mation on ecosystems pressures andresponses to a certain extent, <strong>for</strong> example throughIndicators on water, emissions and biodiversity.This could be extended with additional Indicatorsto communicate better a <strong>reporting</strong> organization’sper<strong>for</strong>mance in the field of ES. One option outlinedin this publication is that indicator development4© 2011 GRI

focuses on the principal threats to ecosystems 1 inorder to capture the key ways that organizationscould be contributing to those threats on ES, andare dependent upon ES that are threatened. A keychallenge here is how to roll up data that by itsnature is very site-specific into aggregate figures<strong>for</strong> <strong>reporting</strong> on an organization-wide basis. Takingthis option into consideration, this publicationfeatures a table exploring example corporate-levelindicators based on the principal key threats toecosystems. These indicators could be options <strong>for</strong>an organization to report on its pressures, impacts,dependence on and responses to ES.Many of the example indicators listed do notdirectly measure ES, but are used as proxies thatcould reveal in<strong>for</strong>mation on the actual ES.Generally however, they would require additional1Habitat loss and degradation; overexploitation and unsustainableuse; climate change; pollution and nutrient load; and invasive alienspecies. (Secretariat of the Convention on Biological Diversity,2010).data to actually reveal such in<strong>for</strong>mation. For mostper<strong>for</strong>mance data gathered, the only availabletechniques are to contextualize it in terms of ES:providing in<strong>for</strong>mation that enables readers tounderstand the implications of reported data <strong>for</strong>changes in ES, either in terms of scale, nature ofchanges, or chain reactions initiated. Per<strong>for</strong>mancedata could also be reviewed in relation to servicepotential and ecological limits, which involvesan assessment of the percentage of an ES supplyconsumed by the organization in relation to use byother stakeholders, and thresholds <strong>for</strong> sustainableuse.The publication concludes with an elaboration onpossible future uptake of ES in GRI’s sustainability<strong>reporting</strong> guidance.5GRI Research andDevelopment SeriesI Research & Development<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosureTopicsReportingPractices

Sustainability Reporting Today: The Readers’ VerdictGlossary of terms inthis paperTermBeneficiaryBenefitBiodiversityCultural servicesDependencyEcosystemEcosystem conditionEcosystem functionEcosystem servicesDefinitionA stakeholder who benefits from ecosystem services provided.The advantage gained by people as a result of the ecosystem serviceprovision.A contraction of biological diversity. “Biological diversity” means thevariability among living organisms from all sources including, inter alia,terrestrial, marine and other aquatic ecosystems and the ecologicalcomplexes of which they are part; this includes diversity withinspecies (genetic diversity), between species (species diversity) and ofecosystems (ecosystem diversity).The non-material benefits obtained from ecosystems through spiritualenrichment, cognitive development, reflection, recreation, and aestheticexperience, including <strong>for</strong> example knowledge systems, social relationsand aesthetic values.The reliance that an organization or other beneficiary has on ecosystemservices and their continued delivery in the future.The dynamic complex of plant, animal, and micro-organismcommunities and their non-living environment interacting as afunctional unit. Humans, where present, are an integral part ofecosystems. Examples include a rain<strong>for</strong>est, desert, coral reef, ora cultivated system. Ecosystems vary in size and complexity ofinteractions, and are interconnected and impacted by natural processesand human-induced factors. Ecosystems have no fixed boundaries;instead their parameters are set to the scientific, management, or policyquestion being examined. Depending upon the purpose of analysis,a single lake, a watershed, or an entire region could be considered anecosystem.The amount or quantity of underlying physical resources whichinfluence the ability of ecosystems to support ecosystem processes anddeliver ecosystem services.The physical, chemical and biological processes by which ecosystemsdeliver services and benefits, including decomposition, production [ofplant matter], nutrient cycling, and fluxes of nutrients and energy.The benefits that people derive from an ecosystem. These might include:• production of goods, e.g., food, fibre, water, fuel, genetic resources,and pharmaceuticals• regeneration processes, e.g., purification of air and water, seeddispersal and pollination• stabilizing processes, e.g., erosion control and moderation ofweather extremes• life-fulfilling functions, e.g., aesthetic beauty and cultural value• conservation of options e.g., maintenance of ecological systems <strong>for</strong>the future.6© 2011 GRI

Sustainability Reporting Today: The Readers’ Verdict1. Introduction1.1 BackgroundEnvironmental conservation has undergone a rapidparadigm shift in recent years and is increasinglyconcerned with maintaining ecosystems <strong>for</strong>people’s welfare and well-being. This shift hasbeen driven by both scientific recognition of theimportance of ecosystems as key building blocksof environmental strategies and the practical goalof creating clearer links between markets andenvironmental and social development. However,most work to date has been aimed at the scientificand policy areas and there is now a wish to includeecosystem services in tools <strong>for</strong> organizationalper<strong>for</strong>mance measurement and <strong>reporting</strong>.Organizations traditionally measure environmentalper<strong>for</strong>mance in terms of inputs and outputs relatedto their operations. Such flows are expressed inenvironmental indicators that can be identified,managed, and ultimately measured by an individualorganization. Measuring the quality and flowof ecosystem services is a more complex task,with shared responsibilities <strong>for</strong> those affectingand benefiting from them. Such complexity isshown, <strong>for</strong> example, when looking at nutrientcycling. The relevance of nutrient cycling is clearat a conceptual level <strong>for</strong> a company reliant onagricultural produce, but it is not obvious how todefine or measure an organization’s per<strong>for</strong>mancewith respect to this service. Measuring thefinancial value of ecosystem services to supportcorporate decision making is also challenging. Todate, tools developed <strong>for</strong> organizational use havefocused mainly on communicating the conceptsof ecosystems and ecosystem services, and onhelping organizations to understand dependencies,impacts and associated risks, while per<strong>for</strong>mancemeasurements and <strong>reporting</strong> on ecosystem servicesare generally focused on management activitiesand consumption of a few natural resources such aswater.The GRI Sustainability Reporting Guidelines includePer<strong>for</strong>mance Indicators that elicit comparablein<strong>for</strong>mation on the economic, environmental,and social per<strong>for</strong>mance of an organization.The GRI Environmental Indicators coverper<strong>for</strong>mance related to inputs (e.g., material,energy and water) and outputs (e.g., emissions,effluents and waste). In addition, these coverper<strong>for</strong>mance related to biodiversity, environmentalcompliance, and other relevant in<strong>for</strong>mation suchas environmental expenditure and the impactsof products and services. Some of the GRI SectorSupplements refer to ecosystem services; thesereferences are included in Annex II.1.2 Ecosystem services and <strong>reporting</strong>In cooperation with the United NationsEnvironment Programme World ConservationMonitoring Centre (UNEP-WCMC) and consultancyCREM, the Global Reporting Initiative (GRI) hasbeen assessing opportunities to translate emergingthinking around ecosystem services (ES) intosustainability <strong>reporting</strong> indicators and approachesthat can be used as a minimum starting point byorganizations in all sectors. The aim has been toprovide a blueprint <strong>for</strong> how to more effectivelymeasure, assess, and benchmark an organization’sper<strong>for</strong>mance in relation to ES. In this context,it should be stressed that the GRI Guidelinescan support sustainability <strong>reporting</strong> across anorganization, while ES are generally characterizedby their site-specific nature. The challenge tocombine these into an approach <strong>for</strong> <strong>reporting</strong>on ES has been discussed with participants atfour expert meetings 2 . Draft conclusions havebeen shared with an Advisory Group established<strong>for</strong> project consultation, which then providedwritten feedback. The approach <strong>for</strong> <strong>reporting</strong> onES presented in this publication demonstratesthat progress can be made in this field, despite thechallenges.It is acknowledged that individual companies inparticular sectors, such as food and agriculture,could take greater steps and use more specificsector-based ES per<strong>for</strong>mance metrics thanproposed in this report. Complexities arise whendiscussing ES per<strong>for</strong>mance in standardized2 Nagoya, side event at the tenth Conference of the Parties to theConvention on Biological Diversity, 25 October 2010.London, Ecosystem Services Indicator Workshop, 3 February 2011.Sao Paulo, Ecosystem Services Indicator Workshop, 16 March 2011.Rio de Janeiro, Ecosystem Services Indicator Workshop, 17 March2011.10© 2011 GRI

sustainability <strong>reporting</strong> applicable across all sectors.This report presents an approach to help tacklesuch complexities.1.3 Document structureThis publication has been written in a sequencethat will give the reader an insight into the fieldof ES, the realities of monitoring their status andthe influence of organizational activities, andthe feasibility of incorporating this in<strong>for</strong>mationinto sustainability <strong>reporting</strong>. It concludes with adescription of the process <strong>for</strong> possible inclusionin the development of new generations of the GRISustainability Reporting Guidelines.The following questions <strong>for</strong>m the basis <strong>for</strong> thedifferent sections:What are ecosystem services and howdo they relate to organizations?Section 2 considers the background theory onES, and explains the relationships between ESand organizations. It highlights the challengesin measuring impacts and dependency on ES.How could <strong>reporting</strong> on ecosystemservices per<strong>for</strong>mance be shaped?Section 3 deals with the question of howto measure relationships between ES andorganizations. It explains how narrative<strong>reporting</strong> can be used to elaborate the basics<strong>for</strong> stakeholders to understand a <strong>reporting</strong>organization’s relationship to ES. In addition,example per<strong>for</strong>mance indicators to report onpressures, impacts, dependencies and responseactions in respect to ES are presented, togetherwith an approach of ES contextualization inrespect to per<strong>for</strong>mance data.Ecosystem services in future GRI<strong>reporting</strong> guidanceSection 4 looks at the potential to includedisclosure requirements on ES in future updatesof the GRI Reporting Framework.<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosure11GRI Research andDevelopment SeriesI Research & DevelopmentTopicsReportingPractices

Figure 1. An example of ecosystem connectivity, showing mangroves, seagrasses and coral reefs.Ecological and physical connectivity between ecosystems is depicted <strong>for</strong> each ecosystem: terrestrial (brownarrows), mangroves (green arrows), seagrasses (blue arrows), and coral reefs (red arrows). Potential feedbacksacross ecosystems from the impacts of different human activities on ecosystem services are also shown(yellow arrows). (Silvestri & Kershaw 2010).Figure 2. The concept of ecosystem services. Ecosystem condition and function comprise the ‘stock’ ofecosystem services. These ‘flow’ to ‘beneficiaries’ to become realized, now or in the future.<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosure13GRI Research andDevelopment SeriesI Research & DevelopmentTopicsReportingPractices

Sustainability Reporting Today: The Readers’ Verdict2.3 Classification of ecosystem servicesThe concept of ES gained significant attentionthrough the Millennium Ecosystem Assessment(MA, 2005), which classified them as supporting(e.g., lifecycle maintenance), regulating (e.g.,regulation of water flows), provisioning (e.g., food)and cultural (e.g., recreation). Nonetheless, theconcept is continually evolving. A number of furtherdefinitions and classification systems have beendeveloped as the concept becomes increasinglyapplied to valuation, assessment and <strong>reporting</strong> onecosystems and their ability to sustain life. Some ofthe key frameworks developed are those of Fisheret. al. (2007), Balm<strong>for</strong>d et. al. (2008), de Groot et.al. (2010), and the Ecosystem Services IndicatorsDatabase (ESID) framework developed by the WorldResources Institute (WRI, 2010). For the purpose ofthis paper, the categorization in con<strong>for</strong>mity with theMA classification is followed. Table 1 presents theclassification of ES and details the service types thatfall within each category.2.4 The linkages between organizationsand ecosystems: impacts,dependencies and responsesThe linkages between organizations and EScan be described through impacts, wherebyan organization’s activities cause a positive ornegative change to ecosystems and their capacityto supply services, and dependencies, wherebyan organization relies on regular and stableprovision of particular ES <strong>for</strong> the continuation of itsoperations. Impacts and dependencies can movean organization to respond, i.e., undertaking actionsthat can affect any part of the chain betweenpressures and benefits.ImpactsImpacts refer to either a positive or negative changein the supply of services and can occur throughchanges to the stock and/or flow of ES.The impact of a specific organization can be definedwhen such a change can be attributed toTable 1. Classification of ecosystem services into provisioning, regulating, habitat/supporting and culturalservices (UNEP-WCMC, 2011).14© 2011 GRI

that organization’s activities or as part of cumulativeeffects with other stakeholders.Impacts result from pressures exerted on ES byoperational activities. Pressures can be categorizedas:• UsageUsage defines the amount of ES used.Organizations cause pressures on ES by usingthem as inputs <strong>for</strong> their operations, such as freshwater, raw materials, and genetic resources.Usage results in changes to ES by reducingavailability to other stakeholders, futureavailability to the organization, or indirectlyby removing a functional component of theecosystem.• DischargesOperations result in the outflow of by-productsinto the natural environment that may pressureES, such as air emissions, noise, radiation andlight.• Other activities that result in ecological changesOrganizations can cause various impacts toES from which they draw no direct benefit.For instance, activities such as flooding or theintroduction of invasive species may be as aresult of shipping traffic in a coastal area.Pressures may lead to a range of impacts onboth the stock and flow of ES, which then caninfluence the benefits received from them.Many impacts involve a reduction in theresource base, <strong>for</strong> example through excessiveextraction of water and materials, or throughdisturbance or degradation of ecosystems thatprovide the services. This may lead to a negativeinfluence on the organization itself or on otherstakeholders. In some cases, an organizationcan cause other stakeholders to have reducedaccess to services, thereby impacting theflow, without necessarily changing the stockof services available. This can occur throughexclusion where access is denied, or throughredirecting the service from one location toanother. While impacts can occur throughoutthe supply chain, they are often mostdramatic at the production end of the chain.The extraction of natural resources andagricultural production are among thosewith the largest impacts on ES.DependenciesThe reliance of an organization on ES and theircontinued delivery in the future defines anorganization’s dependence on ES. Organizationsdepend upon a large range of goods and servicesprovided by ecosystems. These include the finalproducts and raw materials of traded goods (e.g.,fish, timber and medicine), those ES relied on tomaintain productivity of systems (e.g., lifecyclemaintenance, biological control), those ES thatsupport manufacturing and extraction processes(e.g., flows of water), those ES that directly mitigaterisk (e.g., moderation of extreme events throughflood and storm defences), and those ES that offerless tangible yet valuable benefits (e.g., aestheticenjoyment <strong>for</strong> recreation). Dependency can be bothdirect through usage, and indirect through nonconsumptivereliance on ecological conditions.While most dependency relationships with ESare realized in the present, they can also occurin the future, either through sustained supply orlater opportunities <strong>for</strong> product development. Thisaccounts <strong>for</strong> industries such as pharmaceuticalsand cosmetics whereby the potential to discovernew compounds and ingredients is incorporatedinto an organization’s vision. Another example isbionics, whereby organizations apply methodsand principles inspired by nature to the studyand design of engineering systems and moderntechnology.In order to fully understand dependency, anorganization needs to be aware of the sustainabilityof service provision that they depend upon, whichrequires in<strong>for</strong>mation on changes to the stock andflow of those particular services.<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosure15GRI Research andDevelopment SeriesI Research & DevelopmentTopicsReportingPractices

Sustainability Reporting Today: The Readers’ VerdictBox 1: The complexity of impacts and dependenciesTypically, impacts and dependencies are tied to the activities of an organization and its stakeholders, canbe the result of single (such as tree felling) or multiple (such as infrastructure development) actions, and areoften the result of cumulative actions and effects. There<strong>for</strong>e, it can be difficult <strong>for</strong> individual organizationsto isolate them.Impacts can be categorized as follows:• Direct impact – including excessive water use reducing water availability <strong>for</strong> all users in the area,pollution reducing numbers of pollinators, and carbon emissions affecting climate regulation.• Indirect or secondary impact – including impacts resulting from direct effects of activities, such as wateruse causing a change in river flow that indirectly affects mangroves, leading to a loss of flood defence.Other examples include immigration to certain areas as a result of the availability of jobs or roads,leading to an increase in bushmeat hunting reducing wildlife populations. Indirect impacts also refer toeffects further up or down the value chain of an organization - a trader in wood, <strong>for</strong> example, may itselfcause little impact on the provision of ES but its activities cause impacts to occur elsewhere, such asincreased demand potentially leading to unsustainable de<strong>for</strong>estation.• Cumulative impact – impacts that occur in conjunction with other parties’ actions. Examples includeclimate change as a result of cumulative GHG emissions, and water scarcity caused by a number o<strong>for</strong>ganizations using water from the same aquifer.Dependency can be categorised as follows:• Direct dependence – natural resources needed or used <strong>for</strong> an organization’s operations (e.g., fresh wateravailability, timber products).• Indirect or secondary dependence – many of the regulating and supporting services will indirectlybenefit organizations (e.g., oceanic nutrient cycling essential to fish productivity, flood defence toinfrastructure provided by a mangrove ecosystem). Moreover, indirect or secondary dependence refersto ES depended upon by supply chain partners, <strong>for</strong> example natural resources on which key suppliersdepend.The above impacts and dependencies can result in both linear and non-linear changes:• Linear change – whereby changes to the provision of ES occur as a direct, straight<strong>for</strong>ward consequenceof a change in pressure produced by an organization, <strong>for</strong> example water quality declines with anincreased level of effluent output.• Non-linear change – whereby increases in pressure from an organization cause changes to the provisionof ES in a more convoluted fashion. For example, changes only occur once a threshold of pressure isreached, often known as ‘tipping points’, which could lead to ecosystem collapse that is prohibitivelyexpensive or even irreversible. Eutrophication is a good example of a non-linear ecosystem change.Box 1 provides a synopsis of the differing <strong>for</strong>ms that impacts and dependencies may take.16© 2011 GRI

It should be realised <strong>for</strong> both dependencies andimpacts that:• These relationships are not mutuallyexclusive: more than one of the aboverelationships can take place at the sametime. In fact, an organization’s dependenceon a service may also lead to an impact,although this is not always the case. Also,many of the direct impacts will lead toindirect impacts to occur. Reduced wateravailability leading to a loss of habitat andassociated services is one example.• All of these can occur over differentgeographical scales, from local to globalimpacts and dependencies, as well as overdifferent timeframes.• All of these can occur throughout the valuechain, from production and manufacturingthrough to consumption and disposal.ResponsesImpacts and dependencies may move anorganization to undertake actions that changeits relationship to ecosystems and their services.Responses comprise all actions organizations takein relation to their linkages with ES. For example, anorganization may implement mitigation measuresto reduce negative impacts on ES as well as tomaintain the capacity of ecosystems to renderservices, especially when an organization dependson specific ES. Apart from reducing a negativeimpact, an organization may also want to promotepositive effects on ES through the adoption ofsustainable management systems, or undertakingof specific initiatives such as payments <strong>for</strong>environmental services (PES) schemes. An exampleof the latter is when an organization reimburses<strong>for</strong>est owners or farmers <strong>for</strong> their contributions toconserve ES the organization uses. Responses canalso include actions to adjust activities in order toshift away from the use of certain ES, <strong>for</strong> examplebecause these ES are in decline.The relationships between organizations and ESare numerous and are illustrated in Figure 3. Thefigure follows the flow of how combined pressuresof an organization and other stakeholders, aswell as natural causes, drive changes to the stockFigure 3. The linkages between organizationsand ecosystem services. The organization and otherstakeholders generate pressures that can impact thestock and flow of ES. They also derive benefits from ESin the <strong>for</strong>m of provisioning, cultural services, supportingand regulating services. ES stock and flow can also beimpacted by natural causes of change, as well as by theresponses of the organization.and flow of ES. At the same time, an organizationand other stakeholders are drawing upon ES <strong>for</strong>their own activities (NB: ES impacted throughoperational pressures are not necessarily the sameES an organization depends upon). Organizationsrespond to changes in ES through a range ofmeans (such as impact mitigation strategies,substitution strategies to reduce dependency). Eachof these relationships provides an opportunity <strong>for</strong>developing metrics and indicators and these aredetailed below (the numbers corresponding tothose in Figure 3):1. Organizational pressures. These consist of allpressures that an organization places on ES,including usage, discharge, and other activitiesthat result in ecological changes (e.g., habitatclearance, introduction of invasive species).2. Pressures of other stakeholders (usage,discharge, other activities that result inecological changes).17GRI Research andDevelopment SeriesI Research & Development<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosureTopicsReportingPractices

Sustainability Reporting Today: The Readers’ Verdict3. Benefits gained by other stakeholders from ES(directly and indirectly).4. Benefits gained by the organization from ES(directly and indirectly).5. Changes in the stock and flow of ES. Thoselinked to identified pressures providein<strong>for</strong>mation on impacts, whereas changes inthe stock and flow of ES depended upon cangive in<strong>for</strong>mation on the sustainability ofsupply.6. Responses of an organization to mitigateimpacts, reduce dependency and/or increasethe stock and flow of ES.7. Natural causes of change affecting ecosystemsand services rendered.Indicators developed on the pressures and resultingchange in ES stock and flow can be genericallyreferred to as IMPACT indicators, whereas those thatlook at the benefits derived and the sustainabilityof supply can be referred to as DEPENDENCEindicators.Box 2: Examples of the overall picture of linkages between organizations andecosystem servicesExamples of measurements that can be made to capture the important relationships between anorganization’s activities and ES illustrated in Figure 3 are presented <strong>for</strong> two hypothetical case studies below.They do not comprise the full range of potential measurements.Example 1 – production of bottled water1. Organizational pressures – withdrawal of water2. Other stakeholders’ pressures – water withdrawal, pesticide use, land conversion, soil erosion – alllikely to affect water quality and quantity3. Other stakeholders’ dependence – freshwater quality and quantity from aquifer <strong>for</strong> irrigation,recreational use4. Organizational dependence – freshwater quality and quantity from aquifer5. Change in ES – change in aquifer water quality and quantity6. Responses by organization – mitigation measures to ensure required quantity and quality offreshwater <strong>for</strong> an organization’s operations: improve water quality through payments <strong>for</strong> environmentalservices (PES) schemes and decrease water withdrawal through implementation of new technologies inorganization’s bottle production7. Natural causes – precipitation rate variation affecting groundwater table levelsExample 2 - shrimp farming1. Organizational pressures – conversion of a natural system causing a loss of mangrove2. Other stakeholders’ pressures – any clearing of mangrove caused by local activities3. Other stakeholders’ dependence – aquatic resources, land protection, and water desalination4. Organizational dependence – nutrients <strong>for</strong> shrimp production, water purification, water supply5. Change in ES – change in water quality and nutrient supply, change in fish and other aquatic resourceproduction, measurement of erosion and water salinity6. Responses by organization – mitigation measures <strong>for</strong> an organization’s operations, includingreplanting of mangrove, community support projects through supply of water, employment7. Natural causes – precipitation rate variation affecting seawater level18© 2011 GRI

3. Reporting onper<strong>for</strong>mance in relationto ecosystem services3.1 IntroductionAs illustrated in Figure 3 (Section 2.4), relationshipsbetween organizations and ES are numerousand can be categorized as impact relationships(pressures on and changes in ES), dependencerelationships (direct and indirect benefits andsustainability of supply), and responses of anorganization that can refer to both its impact anddependence on ES. This section searches <strong>for</strong> a linein <strong>reporting</strong> that captures these relationships.In assessing options to report in the field ofES, the approach of the current GRI Guidelineshas been followed. A distinction can be madebetween narrative <strong>reporting</strong> on strategy andmanagement, and data <strong>reporting</strong> on per<strong>for</strong>mance.Generally, narrative <strong>reporting</strong> on strategyand management (Section 3.2) entails semistructuredtext, usually in paragraph <strong>for</strong>m,offering, <strong>for</strong> example, strategic and managementimplementation in<strong>for</strong>mation, while per<strong>for</strong>mance<strong>reporting</strong> (Section 3.3) contains unique, individualpieces of in<strong>for</strong>mation that change year-to-yearand may reveal a trend. Both narrative <strong>reporting</strong>on strategy and management and per<strong>for</strong>mance<strong>reporting</strong> are needed in the field of ES <strong>reporting</strong>– since they are complementary – to provide thefull picture of a <strong>reporting</strong> organization’s impacts,dependence and responses.3.2 Narrative <strong>reporting</strong> on strategy andmanagementGRI has included sections on ‘Strategy and Profile’and ‘Management <strong>Approach</strong>’ in its Guidelines. Theseare defined in the current GRI Guidelines (p.19, G3and G3.1 versions) as:• Strategy and Profile: Disclosures that set theoverall context <strong>for</strong> understanding organizationalper<strong>for</strong>mance such as its strategy, profile andgovernance.• Management <strong>Approach</strong>: Disclosures thatcover how an organization addresses a givenset of topics in order to provide context <strong>for</strong>understanding per<strong>for</strong>mance in a specific area.As such, <strong>reporting</strong> on strategy and managementoffers an opportunity to elaborate on how anorganization acts in specific fields, and howsocietal concerns and trends are responded toby an organization. A narrative discussion canbe used to elicit the basics <strong>for</strong> stakeholders tounderstand an organization’s relationship to ES.The broad themes of impact and dependency mayserve as stepping stones <strong>for</strong> <strong>reporting</strong> on strategyand management, which require the <strong>reporting</strong>organization to provide an analysis of the datagathered on pressures, benefits and any impacts onthe supply of ES, as well as on other beneficiariesof ES, and enable the communication of responses(e.g., impact mitigation strategies). Consistentmeasurement, analysis and <strong>reporting</strong> will enable anorganization to detect long term issues and trendsin ES impacted and depended upon in contrast toa once-only occasion, since in some systems therewill be a lag between decline in the condition andfunction of ecosystems and delivery of benefitsderived from them.While a number of related assessment processesalready exist (e.g., environmental impactassessments, social impact assessments, internalrisk assessments), many organizations do notsystematically assess the benefits they receive fromthe natural environment in the context of ES, theirdependence on such benefits to continue theiractivities, and/or the economic risk they run undertheir current management regimes. In order <strong>for</strong> anorganization to properly assess its relationship withES, a number of fundamental questions should beconsidered:Key impacts and dependencies1. Does the organization understand which keyES it uses and on which it is dependent <strong>for</strong>continued supply to support its operations?19GRI Research andDevelopment SeriesI Research & Development<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosureTopicsReportingPractices

Sustainability Reporting Today: The Readers’ Verdict2. Has the organization mapped the key ES it hasan impact on, both positively and negatively,quantitatively and/or qualitatively?3. Do the organization’s impacts limit or enhancethe ability of others to benefit from these ES?4. Which methodologies have been applied toidentify and monitor key ES impacted and/ordepended upon?5. Has the organization’s supply chain beenincluded to identify key ES impacted and/ordepended upon?ES-related risks and opportunities6. What are the conditions and trends in supplyand demand of key ES services impacted and/ordepended upon?7. Has the organization assessed which risks andopportunities arise due to these trends?8. Has a strategy been articulated in responseto risks and opportunities? For example: Haveef<strong>for</strong>ts been undertaken to address potentialrisks related to a diminished supply of key ES?Will operational management be adjusted to,or purchasing procedures anticipate, possiblechanges in the availability of ES the value chaindepends upon?9. Has in<strong>for</strong>mation on the availability of key ESand a potential rise in costs been factored intomanagement plans?10. Do key ES depended upon have cost-effectivesubstitutes?11. What are the linkages between an organization’sactivities, sustainable ecosystem serviceprovision, and the long term viability andcontinuity of the organization?ES governance12. What is within the organization’s scope <strong>for</strong>monitoring and mitigation/restoration activitiesto maintain the health of underlying ecosystemsand contribute to the long-term provision of thequantity and quality of key ES? What is outsidethe organization’s control (e.g., natural changes,use by other stakeholders)?13. How does the organization manage trade-offswhen prioritizing some ES over others?14. Does the organization take into account valuesplaced upon ES by local communities?3.3 Per<strong>for</strong>mance <strong>reporting</strong>3.3.1 GRI Per<strong>for</strong>mance IndicatorsCurrent <strong>reporting</strong> in line with the EnvironmentalPer<strong>for</strong>mance Indicators of the GRI Guidelinesreveals in<strong>for</strong>mation on ES pressures and responsesto a certain extent, <strong>for</strong> example through Indicatorson water, emissions and biodiversity (see Table 3) 3 .The data in response to these Indicators could beused to assess an organization’s ES per<strong>for</strong>mance.Reporting on environmental pressures andresponses could, however, be extended withadditional indicators to better communicate a<strong>reporting</strong> organization’s per<strong>for</strong>mance in the field ofES, especially since the Indicators currently includedin the GRI Guidelines mainly cover only provisioningservices.In order to adequately qualify as a GRI Per<strong>for</strong>manceIndicator, certain criteria have to be met. These areexplained in Box 3.An indicator can be either qualitative or quantitative.An example of a qualitative GRI Indicator is “Watersources significantly affected by withdrawal ofwater” (EN8). Quantitative per<strong>for</strong>mance <strong>reporting</strong>requires a unit of measure to report upon in orderto be comparable, consistent, and benchmarkable.Potential units of measure are in volume, numbers,mass, or size (e.g., litres, hectares, kilogram andCO 2e). As Table 2 shows, in relation to the indicatorcriteria in Box 3 there are a number of (mostlyprovisioning) types of ES <strong>for</strong> which a direct unit ofmeasurement is known and there<strong>for</strong>e can facilitate<strong>reporting</strong> on ES.3.3.2 Challenges to developing ecosystemservices per<strong>for</strong>mance indicatorsES include a wide variety of service types:provisioning, cultural, regulating and supporting.Each individual ES can require a range ofmeasurements to effectively capture itsenvironmental and social dimensions, and itsinterconnectedness with other ES. Selecting a few3ES are also specifically mentioned in several GRI Sector Supplements,such as in the Mining and Metals Sector Supplement andthe Food Processing Sector Supplement (see Annex II).20© 2011 GRI

to report on is quite challenging. Taking the list ofES types (see Table 1), it may be considered thatall are important, but the focus and materialitywould be different depending on factors such as a<strong>reporting</strong> organization’s sector, a specific point intime, specific activities and a particular situation.Moreover, as detailed in Section 2, <strong>for</strong> each ESin question, it is possible to report on a numberof different factors including organizationalBox 3. Criteria <strong>for</strong> indicator designGRI has defined Per<strong>for</strong>mance Indicators as ‘indicators that elicit comparable in<strong>for</strong>mation on the economic,environmental and social per<strong>for</strong>mance of the organization’. When Per<strong>for</strong>mance Indicators <strong>for</strong> GRI are beingdeveloped, there are five basic criteria to adhere to. These are:• Relevance – Indicators should result in in<strong>for</strong>mation about the organization that is relevant to decisionmaking by report users. In addition, an indicator needs to be able to address the overall objectives o<strong>for</strong>ganizations and stakeholders.• Comparability – Indicators should result in in<strong>for</strong>mation that shows change over time and that can becompared with other similar institutions.• Unbiased/neutral – Qualitative indicators should be unbiased/neutral in their phrasing or intent. Forexample, they should not use adjectives or other terms that imply a judgement. They should focuson objective in<strong>for</strong>mation that enables readers to make decisions, and allow <strong>for</strong> changes over time tobe recorded. There<strong>for</strong>e, rather than asking: “whether the organization has implemented adequatemanagement plans”, an indicator should ask “how many management plans the organization has inplace that contain x, y, z.”• Clarity – Indicators should be clear to a report preparer or user about what impacts or aspects ofper<strong>for</strong>mance they are trying to measure. The language and terminology of an indicator should be clearenough that it will be interpreted and applied in a consistent manner.• Feasibility – Indicators need to be feasible to measure and reasonable in order to expect disclosure.Ecosystem ServiceFoodFiberBiomass fuelFreshwaterGenetic resourcesBiochemicals, natural medicines,and pharmaceuticalsPotential unit of measurement <strong>for</strong> (part of the) quality and/or volumeVolume or weight, e.g., kg, litre; area planted in hectaresVolume or weight, e.g., kg, litre, area planted in hectaresVolume or weight, e.g., kg, litre; area planted in hectaresLitre% of DNA diversityVolume or weight, e.g., kg, litre; area planted in hectaresRecreation and tourism Number (e.g., of visitors or jobs related to nature-based or eco-tourism), €(e.g., revenue from nature-based or eco-tourism)Table 2. Ecosystem Services and their units of measurement.pressures, impacts, dependencies and responseson the ES stock and flow, as well as dependenceand impacts of other beneficiaries. There are,there<strong>for</strong>e, a multitude of potential measurementsthat can be made. Measurements of pressurescan often be carried out with a high degree ofaccuracy, since these data are generally held byan organization itself. Reporting on the change inES stock and flow can be particularly challenging21GRI Research andDevelopment SeriesI Research & Development<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosureTopicsReportingPractices

Sustainability Reporting Today: The Readers’ Verdict<strong>for</strong> some ES, and often beyond the capabilitiesof individual organizations. Companies typicallylack sufficient scientific staff and resources toundertake the necessary field assessments. Also,it can be questioned whether companies canbe expected to undertake such exercises ratherthan this in<strong>for</strong>mation being supplied by scientificinstitutions or authorities, <strong>for</strong> example. Moreover,scientific knowledge in the field of ecosystemservices and the relationship between changes tofunction and condition, and changes (enhancementor disruption) to different services provided bya particular ecosystem, is still the focus of muchongoing research.Another challenge <strong>for</strong> <strong>reporting</strong> is the fact thatchanges in ES may be the result of natural changesand may be caused by a combination of differentpressures from a variety of stakeholders. Separatingthe changes in ES caused by an organizationfrom natural changes and pressures of otherstakeholders may prove very difficult. This is furtherconfounded by the connectivity between differentES, whereby it may be difficult to determine thepressure that has caused any change identified.Developing ES-related indicators is also challengedby their site-specific nature. Apart from a fewexceptions, such as climate regulation, the optimalway to measure ES is site-specific, since theecological characteristics and beneficiaries varyby location. To serve organization-wide <strong>reporting</strong>,indicators need to be developed in such a waythat the in<strong>for</strong>mation from various sites can bemeaningfully aggregated.To overcome such challenges, the followingstrategies <strong>for</strong> per<strong>for</strong>mance <strong>reporting</strong> are outlined:1. Develop indicators based on the five key threatsto ES (Section 3.3.3), using proxy indicators<strong>for</strong> ES per<strong>for</strong>mance in case metrics about theES themselves are not deemed feasible <strong>for</strong>corporate level measurements.2. Frame per<strong>for</strong>mance data in an ES context,in case additional in<strong>for</strong>mation is needed toprovide insights into a <strong>reporting</strong> organization’sES per<strong>for</strong>mance.3.3.3 Strategies <strong>for</strong> developing ESper<strong>for</strong>mance indicatorsAs one option, it is suggested that indicatordevelopment focuses in part on the principalthreats to ecosystems (CBD, 2010 - see References)in order to capture the key ways that organizationscould be contributing to these threats, as wellas being dependent upon those ES that arethreatened. Moreover, these threats can beconsidered relevant <strong>for</strong> all organizations andsectors. Per the approach suggested in Figure3, indicators are also suggested that will help to“tell a story” about the organization’s impact anddependence on ES, as well as their response tomitigate threats and support those ES dependedupon.The main threats on ES <strong>for</strong> which indicators aresuggested are:• Habitat loss and degradation (impacting ES suchas water cycling and erosion prevention)• Overexploitation and unsustainable use(impacting ES such as the provision of food andraw materials)• Climate change (impacting ES such as climateregulation and regulation of water flows)• Pollution and nutrient load (impacting ES suchas pollination and recreation)• Invasive alien species (impacting ES such asbiological control and genetic resources)Per<strong>for</strong>mance Indicators within the GRI Frameworkare aimed at <strong>reporting</strong> on an organization-widebasis 4 . The key challenge here is combining ESrelateddata, which by its nature is site-specific,into aggregate figures. Some pressure data canbe aggregated at the group level by adding upper<strong>for</strong>mance metrics, such as the amount of CO 2emitted, the volume of pesticides used, or thesize of natural land converted into productionlocations. Other metrics could be summarized4This paper addresses attention <strong>for</strong> ES in organization-wide <strong>reporting</strong>in con<strong>for</strong>mity with GRI’s general Reporting Guidelines. GRI hasalso issued Sector Supplements that would be fit <strong>for</strong> inclusion ofspecific ES indicators that take into account the characteristicsof the sector in question (in this respect, see also Annex II <strong>for</strong>examples obtained from the Mining and Metals Sector Supplementand the Food Processing Sector Supplement).22© 2011 GRI

y describing trends or frequency of occurrenceacross the organization’s portfolio. For example, asite-based indicator may show the actual changein soil depth or soil pH, whereas a corporate-levelindicator would show the number and location ofsites where soil degradation is occurring. Scorecards<strong>for</strong> site-level application could be developed toobtain data to be aggregated on group level. Otherexamples are the percentage of farming operationsthat have access to healthy pollinator populations,or the percentage of production locations in waterscarce regions. A basis <strong>for</strong> this kind of indicatorcan be the use of global ecosystem services mapsprovided by international institutions, and researchorganizations that provide in<strong>for</strong>mation on ESaround the world, such as water availability and soilquality. The location of production sites could beassociated with in<strong>for</strong>mation given on ecosystems.Some of the important pressures may be locatedfurther down the value chain and there<strong>for</strong>e not bewithin the direct scope of an organization. However,given that impacts on ES are often most severe atthe production side of the supply chain, ef<strong>for</strong>tsneed to be made to address them in <strong>reporting</strong>.Obtaining in<strong>for</strong>mation on sites not directlymanaged poses the challenge of full transparencyand cooperation throughout the supply chain.In addition to indicators that work to aggregatesite-level in<strong>for</strong>mation on ES, corporate levelindicators could work to highlight progressregarding management of ES. For example,the number of operations that have managementplans on ES and their threats (such as theintroduction of invasive species, climate change).Such management-based per<strong>for</strong>mance indicatorswould work particularly well <strong>for</strong> individual sectors.For example, agricultural companies could reporton the number of operations that use integratedpest management or precision agriculture,indicating limited use of pesticides and other agrochemicals.Or, paper and wood-based companiescould disclose the percentage of inputs fromcertified sources, serving as an indication of theirimpact on natural <strong>for</strong>ests and the ES they provide.3.3.4 Example <strong>reporting</strong> indicators in thefield of ecosystem servicesTable 3 explores a range of organization-wideindicators based on the five key threats toecosystems. These example indicators provideoptions <strong>for</strong> <strong>reporting</strong> organizational pressures,impacts, dependence on, and responses to,ES. In addition to presenting indicators thataddress pressures on ecosystems and ES, Table3 suggests indicators that address impacts onother beneficiaries of ES, and responses to thoseimpacts. Also included are GRI EnvironmentalPer<strong>for</strong>mance Indicators from the current Guidelinesthat are relevant, but mostly do not sufficientlyinvite comprehensive <strong>reporting</strong> on ES in theircurrent <strong>for</strong>mat. Many of the indicators listed do notmeasure ES directly; nevertheless, they may serve asmeaningful proxies at organization-wide level.Recognizing that, in some cases, an organization’sdependence on a particular ES can also be a pressure(e.g., water consumption), there is some overlapbetween the pressure and dependence indicators.<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosure23GRI Research andDevelopment SeriesI Research & DevelopmentTopicsReportingPractices

Sustainability Reporting Today: The Readers’ VerdictTable 3. Examples of indicators related to the key threats to ecosystems 5 .Key threatsto ecosystemservicesHabitat lossanddegradationPressures/Impacts onecosystem services andtheir beneficiaries(P)- Change in extent ofnatural land and/orintact biomes altered,broken down by sizeand type of alteration- Number of hectaresof land area of bufferzones converted toother uses by theorganization- Economic loss dueto disruptions fromorganization-inducedland-use change- Number of naturalresource-dependentpeople impacted byorganization-inducedland-use change- Number of landdisputes raised- Number of peoplewith denied accessto natural resourceswithin areas ofoperationAvailable and potential per<strong>for</strong>mance indicators <strong>for</strong> <strong>reporting</strong> on ecosystem servicesPossible future <strong>reporting</strong> indicatorsOrganization’sDependence (D)- Location and size ofland used directly (i.e.,land owned, leasedand/or managed bythe organization)or indirectly (i.e.,land exploitedby value chainpartners to produceinput materials)<strong>for</strong> the purpose ofthe organization’soperations, brokendown by size andecosystem type- Ecosystems/ecosystem servicespresent from whichbenefits are derivedby the organization(e.g., flood defense,aquifer protection,raw materials, pasture)- Amount of naturalresources needed in5 years (e.g., (fertile)cultivated land,undeveloped land,raw materials (fish,timber) and water) tocontinue operationsof the organizationand those of its valuechain partners- Level of exposure ofthe organization tonatural disasters (e.g.,flooding) as a resultof habitat loss anddegradation- Number and natureof pollinating speciesneeded <strong>for</strong> operationsof the organizationand those of its valuechain partnersResponse(R)- Adoption of credible,internationallyrecognizedresponsibleproduction standards<strong>for</strong> natural resourcesharvested, produced,traded and consumedby the organization- Percentage ofproviders complyingwith credible,internationallyrecognizedresponsible standards(including nature oflabel and volume andidentity of products)against the totalnumber of providers- Number ofcommunity-basedhabitat restorationprojects, includingnumber of peopleaddressed throughthese projects- Number ofcompensationprograms <strong>for</strong> peopleimpacted by land-usechange, includingnumber of peopleaddressed throughthese projects- Number of hectaresand type of restoredhabitats or re<strong>for</strong>estedareas- Number and nature ofpolicies implementedto counteract habitatdegradationGRI Environmental Per<strong>for</strong>manceIndicators with a (potential)link to ecosystem servicerelated Pressures/impacts (P),Dependence (D) and Response (R)- Location and size of landowned, leased, managed in,or adjacent to, protected areasand areas of high biodiversityvalue outside protected areas(EN11) (P)- Description of significantimpacts of activities, products,and services on biodiversity inprotected areas and areas ofhigh biodiversity value outsideprotected areas (EN12) (P)- Habitats protected or restored(EN13) (R)- Strategies, current actions,and future plans <strong>for</strong> managingimpacts on biodiversity (EN14)(R)5The relevance of indicators will vary by company and sector and can be assessed through the same types of materiality analysisas used on other issues and indicators. For example, a shipping and logistics company will be more likely than an automotiveproducer to have a direct role in increasing or slowing the spread of invasive species.24© 2011 GRI

Key threatsto ecosystemservicesHabitat lossanddegradationOverexploitationandunsustainableusePressures/Impacts onecosystem services andtheir beneficiaries(P)- Volume of waterconsumed by theorganization by sourcerelated to total wateravailability in areas ofoperation, includingidentification of watersources significantlyaffected bywithdrawal of water- Nature and amountof natural resourcesharvested, produced,traded and/orconsumed (e.g., crops,fish, timber, fiber)by the organizationin relation to safeecological limits- Number of operationsin water scarce areasconsuming beyondsustainable levels- Number of waterdisputes raisedAvailable and potential per<strong>for</strong>mance indicators <strong>for</strong> <strong>reporting</strong> on ecosystem servicesPossible future <strong>reporting</strong> indicatorsOrganization’sDependence (D)- Revenues andemployment realizedfrom nature-basedtourism- Total demand<strong>for</strong> freshwater ofsufficient quality- Number and locationof operations in waterscarce areas, set outagainst importance ofsites <strong>for</strong> continuationof activities (e.g., inrelation to supply)- Level of availabilityof natural resources(e.g., crops, fish,timber, fiber) needed<strong>for</strong> the continuationof the organization’soperations- Level of geneticdiversity indispensible<strong>for</strong> input naturalresources and futureproduct developmentResponse(R)- Area of productionsite set aside toprotect stocks ofnatural resources- Number of hectaresof natural land and/or intact biotopeswithin production/concession areasbeing managed by theorganization- Number of productionsites under sustainablemanagement (e.g.,related to water,maintenance of soilfertility or pollinatingspecies, floodprotection)- Percentage of naturalresources used thatare recycled inputmaterials- Volume of inputs fromsources producedin compliancewith credible,internationallyrecognizedresponsibleproduction standards(including nature oflabel)- Number ofcommunity-basedrestoration or stockmanagement projects,including numberof people addressedthrough theseprojects- Implementationof activities tocompensate <strong>for</strong>the exploitation ofnatural resources (e.g.,support of protectedareas)GRI Environmental Per<strong>for</strong>manceIndicators with a (potential)link to ecosystem servicerelated Pressures/impacts (P),Dependence (D) and Response (R)- Materials used by weight orvolume (EN1) (P)- Percentage of materialsused that are recycled inputmaterials (EN2) (R)- Total water withdrawal bysource (EN8) (P)- Water sources significantlyaffected by withdrawal of water(EN9) (P)- Percentage and total volumeof water recycled and reused(EN10) (R)- Initiatives to mitigateenvironmental impacts ofproducts and services, andextent of impact mitigation(EN26) (R)<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosure25GRI Research andDevelopment SeriesI Research & DevelopmentTopicsReportingPractices

Sustainability Reporting Today: The Readers’ VerdictKey threatsto ecosystemservicesOverexploitationandunsustainableuseClimatechangePollution andnutrient loadPressures/Impacts onecosystem services andtheir beneficiaries(P)- Number of operationswhere people havedenied accessto, or insufficientabundance of naturalresources (e.g., fish,timber), as a resultof the organization’soperations- Economic cost ofcompensation to localcommunities <strong>for</strong> lostnatural resources- Nature and totalamount of direct andindirect greenhousegas emissions andozone-depletingsubstances- Total loss or gainin area of <strong>for</strong>estas a result o<strong>for</strong>ganizationaloperations or thoseof its value chainpartners- Mass of CO 2emissionsfrom de<strong>for</strong>estationas a result o<strong>for</strong>ganizationaloperations or thoseof its value chainpartners- Change in soil pH fromnatural levels resultingfrom pollution and/ornutrient load causedby the organization’soperationsAvailable and potential per<strong>for</strong>mance indicators <strong>for</strong> <strong>reporting</strong> on ecosystem servicesPossible future <strong>reporting</strong> indicatorsOrganization’sDependence (D)- Economic cost tothe organization dueto climate relateddisasters (e.g.,flooding, crop failure)- Amount of naturalCO 2sequestrationneeded to makethe organization’soperations CO 2neutral- Economic cost ofartificial pollinationservices withinoperation areas- Economic cost ofwater purificationtechnologies adoptedResponse(R)- Number of sourcingareas prioritized <strong>for</strong>ecosystem servicemanagement andactions due to highecosystem stress (e.g.,water scarcity, landconversion or erosion)and/or input of naturalresources of whichthe production islinked to degradationof ecosystems (e.g.,due to agriculturalpractices or extractionmethods)- Adoption of energysaving devices andstrategies- Area of <strong>for</strong>est plantedby or by order ofthe organization,including amount ofCO 2sequestrated- Percentage ofsustainably producedgreen energy (ownor purchased) incomparison to totalenergy consumption- Number of productionsites using precisionagriculture- Volume of inputs fromsources complyingwith credible,internationallyrecognizedresponsibleproduction standards(including nature oflabel)GRI Environmental Per<strong>for</strong>manceIndicators with a (potential)link to ecosystem servicerelated Pressures/impacts (P),Dependence (D) and Response (R)- Direct energy consumption byprimary energy source (EN3) (P)- Indirect energy consumption byprimary source (EN4) (P)- Energy saved due toconservation and efficiencyimprovements (EN5) (R)- Initiatives to provide energyefficientor renewable energybased products and services,and reductions in energyrequirements as a result ofthese initiatives (EN6) (R)- Initiatives to reduce indirectenergy consumption andreductions achieved (EN7) (R)- Total direct and indirectgreenhouse gas emissions byweight (EN16) (P)- Other relevant indirectgreenhouse gas emissions byweight (EN17) (P)- Emissions of ozone-depletingsubstances by weight (EN19) (P)- NO, SO, and other significant airemissions by type and weight(EN20) (P)- NO, SO, and other significant airemissions by type and weight(EN20) (P)- Total water discharge by qualityand destination (EN21) (P)- Total weight of waste by typeand disposal method (EN22) (P)- Total number and volume ofsignificant spills (EN23) (P)26© 2011 GRI

Key threatsto ecosystemservicesPollution andnutrient loadInvasive alienspecies (IAS)Pressures/Impacts onecosystem services andtheir beneficiaries(P)- Proportion ofproduction sites withwater pH and saltcontent above setthreshold levels- Total liters of effluentsdischarged measuredagainst critical loads- Total water dischargeby quality anddestination, includingidentificationof ecosystemssignificantly affected- Economic loss dueto lost ecosystemservices resultingfrom an organization’spollution (e.g., oil spill)and runoff- Economic lossresulting from adecline in harvestednatural resources (e.g.,fish, crops) as a resultof polluted habitats- Number of peopleaffected by pollutedhabitats as a resultof organization’sactivities, e.g., throughdeclines in harvestedspecies and lack ofclean water- Change in catchmentlevel of river sedimentyields caused bythe organization’soperations- Number of IASintroduced as aresult of operations(e.g., construction ofnew production site,transport)- Number of productionsites economicallyimpacted by IAS (e.g.,as a result of reductionof water quality orquantity)Available and potential per<strong>for</strong>mance indicators <strong>for</strong> <strong>reporting</strong> on ecosystem servicesPossible future <strong>reporting</strong> indicatorsOrganization’sDependence (D)- Nature and amount ofnatural resources used(e.g., reed fields, <strong>for</strong>est,wetlands) to purifydischarges- Management ofnatural vegetationby an organization tocontrol erosion- Economic cost ofartificial pollinationservices withinoperation areas dueto IAS- Economic costsof a loss of nativeharvested species as aresult of IASResponse(R)- Number of productionsites under sustainablemanagement directedat the mitigationof pollution (e.g.,proper discharge ofhazardous waste,ecologically safedischarges andreduced artificialnutrient application)- Number of operationswith a monitoringplan <strong>for</strong> theidentification of entryof IAS- Number ofimplementedpolicies to avoid theintroduction of IAS(e.g., through specialmeasures duringtransport)GRI Environmental Per<strong>for</strong>manceIndicators with a (potential)link to ecosystem servicerelated Pressures/impacts (P),Dependence (D) and Response (R)- Identity, size, protected status,and biodiversity value of waterbodies and related habitatssignificantly affected by the<strong>reporting</strong> organization’sdischarges of water and runoff(EN25) (P)- Significant environmentalimpacts of transportingproducts and other goodsand materials used <strong>for</strong> theorganization’s operations, andtransporting members of thework<strong>for</strong>ce (EN29) (P)<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosure27GRI Research andDevelopment SeriesI Research & DevelopmentTopicsReportingPractices

Sustainability Reporting Today: The Readers’ VerdictKey threatsto ecosystemservicesInvasive alienspecies (IAS)Pressures/Impacts onecosystem services andtheir beneficiaries(P)- Number of peopleaffected by a lossof native harvestedspecies as aresult of IAS fromorganization’sactivities- Economic impact ofcontrolling diseasescaused by introducedcrop pests associatedwith the organization’soperationsAvailable and potential per<strong>for</strong>mance indicators <strong>for</strong> <strong>reporting</strong> on ecosystem servicesPossible future <strong>reporting</strong> indicatorsOrganization’sDependence (D)Response(R)- Number of sites withan eradication plan <strong>for</strong>IAS in place, includingthe status of the planGRI Environmental Per<strong>for</strong>manceIndicators with a (potential)link to ecosystem servicerelated Pressures/impacts (P),Dependence (D) and Response (R)Some example indicators are visualized in Figures4, 5, 6, 7 and 8. They show how <strong>reporting</strong> could bebased on aggregated site-level in<strong>for</strong>mation tomeasure and monitor per<strong>for</strong>mance over time, andhow global maps can present an organization’sactivities related to ES.Europe: 12%NorthAmerica: 9%South-EastAsia: 34%Africa: 18%South America:27%Figure 4. Example of <strong>reporting</strong> on possible future ES indicator: Sourcing regions mapped againstglobal water stress and scarcity. An organization could prioritize its ecosystem service management andactions by focusing on sourcing regions that face high ecosystem stress (e.g., water scarcity, land conversionor erosion). The example given maps sourcing regions <strong>for</strong> the organization’s operations against a globalecosystem service map with respect to water stress and scarcity.(Source of map: http://maps.grida.no/go/graphic/global-waterstress-and-scarcity)28© 2011 GRI

Figure 5. Example of <strong>reporting</strong> on possible future ES indicator: Water consumption per<strong>for</strong>manceof production sites in water-scarce areas. The volume of water consumed by the production sitesassessed against the total water availability in areas of operation may indicate whether or not consumptionis beyond sustainable levels. It should be noted that such levels, or thresholds, may change over time due toreduced supply, an increase in the number of beneficiaries, or other reasons. These levels should, there<strong>for</strong>e, beinvestigated regularly.Figure 6. Example of <strong>reporting</strong> on possible future ES indicator: Economic costs to the organizationdue to climate related disaster. Climate change could result in lost revenues or additional costs as a resultof flooding or crop failure, <strong>for</strong> example. Figure 6 shows the economic cost to an organization due to climaterelated crop failure.<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosure29GRI Research andDevelopment SeriesI Research & DevelopmentTopicsReportingPractices

Sustainability Reporting Today: The Readers’ VerdictFigure 7. Example of <strong>reporting</strong> on possible future ES indicator: Percentage of production sitesunder sustainable management. Sustainable management can relate to, <strong>for</strong> example, water, maintenanceof soil fertility or pollinating species, or flood protection. An organization could develop a scorecard insertingitems that are relevant in terms of ‘sustainable management’ <strong>for</strong> its production sites.Figure 8. Example of <strong>reporting</strong> on possible future ES indicator: Purchase of certified sustainableraw materials. Credible, internationally recognized responsible production standards help to address keythreats to ecosystem services such as overexploitation and unsustainable use. Organizations could adoptthese standards <strong>for</strong> natural resources they harvest, produce, trade and/or consume.30© 2011 GRI

No single indicator can tell the full story; however,a combination of indicators addressing pressures,impacts, dependence and responses, in additionto a narrative on strategy and management,ought to provide a comprehensive overview of anorganization’s ES per<strong>for</strong>mance.Organizations may want to connect <strong>reporting</strong> onindicators, as some impacts and dependenciesmay not exist in isolation. Management andmitigation indicators can then be used to help anorganization demonstrate to its stakeholders howit is responding to specific issues over time andat different sites. For instance, changing naturalhabitat <strong>for</strong> the purpose of road construction mayalso inadvertently cause the introduction of aninvasive alien species, pollute nearby water courses,and increase CO 2emissions, which the organizationwill address with different strategies on differentsites.3.3.5 Framing per<strong>for</strong>mance data into anecosystem service contextTable 3 includes Indicators from the GRI Guidelines,as well as other potential indicators that couldbe used to assess a <strong>reporting</strong> organization’sper<strong>for</strong>mance in the field of ES. These are linked tooperational pressures, impacts, dependencies andresponses, though generally are not ES metricsalone (section 3.3.2 explains the challenges in thisrespect). As such, some of the listed per<strong>for</strong>manceindicators are merely proxies <strong>for</strong> actual ES stock andflow; these indicators generally require additionalin<strong>for</strong>mation.In a few limited cases, it is possible to rely onstandard coefficients to estimate the impact on ESof particular levels of per<strong>for</strong>mance. For example,it is possible to estimate global warming potentialof different air pollutants and place these in thecontext of their overall contribution to climatechange. However, this can only be done <strong>for</strong> a smallset of data. For most per<strong>for</strong>mance data gathered,the only available techniques are to contextualizethe in<strong>for</strong>mation in terms of ES, i.e., providingin<strong>for</strong>mation that allows readers to understand theimplications of reported data <strong>for</strong> changes in ES,either in terms of scale, nature of changes, or chainreactions initiated.Context <strong>reporting</strong>Placing reported data into an ES context caninclude techniques to present per<strong>for</strong>mancedata in relation to total loading (e.g., placing anorganization’s specific discharges in relation to thetotal number of such discharges, as well as in thecontext of the capacity of ecosystems to processsuch discharge). Per<strong>for</strong>mance data could alsobe reviewed in relation to service potential andecological limits, which involves an assessment ofthe percentage of an ES supply consumed by theorganization in relation to use by other stakeholdersand thresholds <strong>for</strong> sustainable use. While some ofthese data may have already been gathered as partof environmental impact assessments, such actualdata may be difficult to obtain in reality. Narrativein<strong>for</strong>mation to understand the implications of anindicator would be helpful in these cases. This caninclude an explanation of the chain of causality thatlinks per<strong>for</strong>mance and ES change, or commentingon the potential scale of ES change withoutestimating actual numbers. For example, one of thekey drivers of impact with respect to the ecosystemservice of ‘pollination’ is the use of pesticidesnegatively impacting bee populations. Such apotential impact can there<strong>for</strong>e be directly linkedto the nature and amount of pesticides used by anorganization, which may already be reported on aspart of the GRI Indicator ‘Description of significantimpacts of activities, products, and services onbiodiversity in protected areas and areas of highbiodiversity value outside protected areas’ (EN12).Putting these data in a ‘pollination’ context toillustrate the relationships at play (even withoutknowing the exact number of bee populationsimpacted) is valuable and enables an organizationto report on its relationship to ES.Other examples of context <strong>reporting</strong> includeexplaining the:• effect of fertilizers used <strong>for</strong> agriculturalproduction and run off to the ground water inthe context of local soil structure, absorptionand transmission of chemicals, health of thelocal ecosystem and impacts on the waterquality;• contribution of CO 2emissions fromde<strong>for</strong>estation discussed in the context of climate31GRI Research andDevelopment SeriesI Research & Development<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosureTopicsReportingPractices

Sustainability Reporting Today: The Readers’ Verdictchange (due to the loss of the carbon storagefunction and the release of stored carbon intothe atmosphere) and its implications;• effect of specific waste on the pH value ofnatural water bodies and resulting impacts onwater quality and biodiversity;• extent to which an organization’s operationalpractices or products influence the spread ofinvasive species;• contribution of NO xemissions to acid rain anda description of impacts on the state of specificecosystems affected;• volume of SO xdiscussed in the context of localambient air quality and the effects of emitting acertain quantity using available data on regionalpollutant levels and dose-response functions;and• potential beneficial outcomes of a <strong>for</strong>estrestoration project <strong>for</strong> local communities (e.g.,flood regulation, water regulation, access tonon-timber <strong>for</strong>est products).To support <strong>reporting</strong>, in<strong>for</strong>mation on thecondition of ecosystems gathered by others (e.g.,government, research institutions, NGOs, andlocal experts) can be used to put in<strong>for</strong>mation intocontext (e.g., coupling water scarcity data and wateruse data).32© 2011 GRI

4. Ecosystem servicesin future GRI <strong>reporting</strong>guidanceThe landscape of sustainability <strong>reporting</strong> iscontinuously evolving. More stakeholders than ever– including regulators, investors, rating agenciesand NGOs – are asking <strong>for</strong> the non-financial (orsustainability) data which increasingly influencescompanies’ financial results.The GRI Sustainability Reporting Guidelines havefollowed this evolution closely. The general requests<strong>for</strong> <strong>reporting</strong> on such issues are summarizedin the GRI Guidelines after <strong>for</strong>mal and in<strong>for</strong>malinternational consultations with representativesfrom business, civil society and labor, but also withinvestors, consultants and experts. GRI refers tothis as an international multi-stakeholder process.The current version of the Guidelines - G3 and theexpanded G3.1 - is available <strong>for</strong> free downloadfrom the GRI website. Details of the GRI Guidelinesdevelopment are also available there.In 2011, GRI started the development of the newgeneration of the Guidelines: G4. At the beginningof 2011, surveys targeted at GRI stakeholders asked<strong>for</strong> suggested improvements to GRI’s guidance<strong>for</strong> existing <strong>reporting</strong> topics, and suggestions <strong>for</strong>new sustainability <strong>reporting</strong> topics that should beconsidered in the development of the updatedGuidelines.Not surprisingly, ecosystem services was amongthe topics suggested by respondents in the 2011surveys. This guarantees that this topic will be partof the discussions about the future of <strong>reporting</strong> onthe impacts companies’ activities have on ES 6 .As stated previously, <strong>reporting</strong> on existing GRIPer<strong>for</strong>mance Indicators may begin to indicate6Following due process, the improvements and new topics suggestedin such surveys are presented to GRI’s Technical AdvisoryCommittee <strong>for</strong> analysis. Selected topics then undergo furtherpublic exposure in order to be prioritized. Ultimately, GRI convenesmulti-stakeholder Working Groups to develop first drafts of newGuidelines content. Working Group composition is influencedby the proposals <strong>for</strong> new content. Final drafts of guidance areinfluenced once again by international public consultation, be<strong>for</strong>ebeing presented to GRI’s governance bodies, which vote <strong>for</strong> oragainst their release.the pressures, impacts and dependencies that anorganization has on ES (see Table 3). On a highlevel, GRI Environmental Indicators that requestdata on the significant environmental impacts ofproducts and services, and their transportation,may steer organizations towards a consideration ofecosystems and ES. Other GRI Indicators coveringland ownership and management ask <strong>for</strong> dataon habitats restored or protected, impacts onareas of high biodiversity value, and on strategyand plans <strong>for</strong> managing impacts on biodiversity.Indicators focused on water usage seek disclosureon sources of water withdrawal and impacts onthese sources, on amounts of recycled and reusedwater, and on the biodiversity value of water bodiesaffected by discharges. Although ecosystems arenot referenced specifically, the varied Indicatorscovering energy use and emissions may also directorganizations’ attention towards ES, by providingdata on energy consumption and efficiency, andemissions of GHGs, ozone depleting substances,and other significant air emissions.ES is clearly implicated in two GRI SectorSupplements – <strong>for</strong> the Food Processing and Miningand Metals sectors (see Annex II). Both Supplementshave amendments to their Indicators on biodiversehabitats, including water bodies being added tothe type of habitats covered in the Food ProcessingSector Supplement (FPSS). The FPSS also featuresnew content on the sourcing of raw materials. Thisincludes asking reporters to identify their mostsignificant dependencies upon ecosystems, andguidance on how to report their sourcing strategy<strong>for</strong> the sector-specific Aspects of Protecting NaturalResources, Minimizing Toxicity, Traceability, AnimalWelfare and Biofuels.Furthermore, the introduction to the Mining andMetals Sector Supplement states that biodiversityincludes ecosystems and “the goods and servicesthat they provide”, with a definition of ES addedto Indicator EN14 (Strategies, current actions, andfuture plans <strong>for</strong> managing impacts on biodiversity).<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosure33GRI Research andDevelopment SeriesI Research & DevelopmentTopicsReportingPractices

Sustainability Reporting Today: The Readers’ VerdictBut – still - the most challenging task <strong>for</strong> the futureof <strong>reporting</strong> guidance and impact measurement is:how to create organization-wide <strong>reporting</strong> guidancefocused on ES specifically, rather than reaching ESdisclosures via general environmental <strong>reporting</strong> or<strong>reporting</strong> on biodiversity and ecosystems.While the challenges of this task are many, thispublication is a vital resource <strong>for</strong> examining theavailable options. Its authors hope that it representsthe beginnings of ES <strong>reporting</strong> guidance that isexplicit, comprehensive and practical, increasingour potential to preserve the benefits of ecosystems<strong>for</strong> people, planet and profit.34© 2011 GRI

Balm<strong>for</strong>d, A., Rodrigues, A., Walpole, M., ten Brink,P., Kettunen, M. & Braat, L. and de Groot, R. (2008)Biodiversity Loss: Scoping the science. Report produced<strong>for</strong> the European Commission.Balvanera, P., Pfisterer, A.B., Buchmann, N., He, J.S.,Nakashizuka, T., Raffaelli, D. & Schmid, B. (2006)Quantifying the evidence <strong>for</strong> biodiversity effects onecosystem functioning and services. Ecology Letters 9:1146-1156.de Groot, R.S., Alkemade, R., Braat, L., Hein,L. & Willemen, L. (2010) Challenges in integrating theconcept of ecosystem services and values in landscapeplanning, management and decision making.Ecological Complexity 7: 260-272.Fisher, B., Costanza, R., Turner, R.K. & Morling, P. (2007)Defining and Classifying Ecosystem Services <strong>for</strong>Decision Making. CSERGE Working Paper EDM.Global Reporting Initiative. (2006) SustainabilityReporting Guidelines (G3).Global Reporting Initiative. (2011) SustainabilityReporting Guidelines (G3.1).Global Reporting Initiative. (2010) SustainabilityReporting Guidelines & Food Processing SectorSupplement.ReferencesGlobal Reporting Initiative. (2010) SustainabilityReporting Guidelines & Mining and Metals SectorSupplement.Millennium Ecosystem Assessment (MA) (2005).Ecosystems and Human Well-Being: Opportunities andChallenges <strong>for</strong> Business and Industry. World ResourcesInstitute, Washington, D.C., USA.Secretariat of the Convention on Biological Diversity(CBD) (2010). Global Biodiversity Outlook 3. Montreal,94 pages.Silvestri, S. & Kershaw, F. (eds.) (2010) Framing the flow:Innovative <strong>Approach</strong>es to Understand, Protect andValue Ecosystem Services across Linked Habitats, UNEPWorld Conservation Monitoring Centre, Cambridge, UK.UNEP/GRID Arendal. http://maps.grida.no/go/graphic/global-waterstress-and-scarcity.UNEP-WCMC (2011). Developing ecosystem serviceindicators: Experiences and lessons learned from subglobalassessments and other initiatives. Secretariatof the Convention on Biological Diversity, Montréal,Canada. Technical Series No. 58, 118 pages.World Resources Institute (WRI) (2010). EcosystemService Indicators Database (ESID). WRI, WashingtonDC, USA. URL: www.esindicators.org.<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosure35GRI Research andDevelopment SeriesI Research & DevelopmentTopicsReportingPractices

Sustainability Reporting Today: The Readers’ VerdictAnnex I: AcknowledgmentsAdachi Naoki, Response Ability, Inc.Ana Carolina Srbek de Araujo, Reserva Natural ValeAnnelisa Grigg, Global BalanceCamila L. Gramkow, Conservação InternacionalCarlos Eduardo Lessa BrandãoDaniela Lerda, Consultora/WCMC-UNEPEric Landen, Landen ConsultingFlorence Landsberg, WRIFranz Knecht, ConNexiS AGIvo Mulder, UNEP FIJames Griffiths, WBCSDJohn Finisdore, TNCJohn van Himbergen, Dutch Ministry of Infrastructure and the EnvironmentKurt RaminMarion Hammerl, Global Nature FundPippa Howard, Fauna & FloraRachel Jackson, ACCARichard Mattison, TrucostRobert N. Shaw, Osaka UniversityRoberto Bossi, ENIStefan Hörmann, Global Nature FundSteven de Bie, Shell NederlandSuzanne Ozment, WRIUnica36© 2011 GRI

Annex II: Reference to ecosystem services inGRI Sector SupplementsSustainability Reporting Guidelines &Food Processing Sector SupplementContentsIn this publication, Food Processing sector contenthas been integrated into the G3 Guidelines. TheDisclosures and Per<strong>for</strong>mance Indicators in the FoodProcessing Sector Supplement make up the <strong>reporting</strong>framework <strong>for</strong> all organizations active in the foodprocessing sector.Relevance <strong>for</strong> <strong>reporting</strong> on ecosystemservicesParts of the Food Processing Sector Supplement thatcould (potentially) be linked to the topic of ecosystemservices have been quoted below:SourcingSourcing has been identified by the Working Group<strong>for</strong> this Supplement and other contributors as a newissue of critical importance to the sustainability of thefood processing sector. The sector depends on primaryproduction, such as agriculture and fisheries, <strong>for</strong> itsraw materials. Obtaining raw materials directly fromprimary producers, brokers, commodity markets orsome combination of these carries inherent materialrisks (e.g. child labor, water scarcity), which can affectfood processing companies and society. Primaryproduction is often outside the direct control offood processing organizations and yet gives rise tomajor risks <strong>for</strong> this sector. It is there<strong>for</strong>e important toemphasize the need <strong>for</strong> the <strong>reporting</strong> organization toconsider sustainability throughout the organization’ssupply chain (vertically), while recognizing that itsscope <strong>for</strong> action is primarily through its direct (first tier)suppliers.In order to address the immense variety of companyinfluences on sourcing chains, any disclosure approachmust allow companies and key stakeholders to focustheir ef<strong>for</strong>ts on the most important issues in thesourcing chain by using the principle of materiality.The purpose of taking this approach is to enablethe <strong>reporting</strong> organization to identify the mostsignificant impacts that its supply chain has on society,the economy and the environment, as well as thesignificant dependences 7 on ecosystems and socialservices that may exist within its supply chain.Disclosure on Management <strong>Approach</strong>The following factors, among others, may contributeto increased material risk and could be used by the<strong>reporting</strong> organization in the materiality assessment ofits supply chain.The suppliers’ raw material is:• Produced in an area of resource constraint• Produced in a region of high conservation value• Produced in an area of social, political or economicvulnerabilityFor each identified material Aspect, the <strong>reporting</strong>organization should provide a concise disclosure ofthe sourcing management approach taken to theAspects within each category of the G3:• Economic• Environment• Labor• Human Rights• Society• Product ResponsibilityThe <strong>reporting</strong> organization should also providea disclosure of the sourcing strategy taken to thefollowing sector-specific Sourcing Aspects:• Protecting Natural Resources• Minimizing Toxicity• Fair Trade• Fair Compensation <strong>for</strong> Labor• Traceability• Genetically Modified Organisms (GMO 8 )• Animal Welfare• Biofuels7An example of dependence on an ecosystem service is where a keysupplier to the <strong>reporting</strong> organization is dependent on a steadysupply of clean water from a water-scarce catchment. The steadyprovision of the water is a service provided by the ecosystem ofthe catchment. See the WRI Ecosystem Services review <strong>for</strong> a toolto assess dependence on ecosystem services. An example of socialdependence is when a key supplier to the <strong>reporting</strong> organizationdepends upon the availability of casual labor to operate duringpeak periods of output.8GMOs and biofuels are included as an Aspect here because they areof significant concern to some stakeholders.<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosure37GRI Research andDevelopment SeriesI Research & DevelopmentTopicsReportingPractices

Sustainability Reporting Today: The Readers’ VerdictThe <strong>reporting</strong> organization should explain how thoseof the above Aspects that are considered materialare incorporated into the organization’s sourcingstrategies and processes. The <strong>reporting</strong> organizationshould state how it integrates sustainabilityconsiderations throughout its supply chain into itspurchasing criteria. The <strong>reporting</strong> organization shouldindicate its management approach to sourcing undereach of the elements listed below.PolicyBriefly state the <strong>reporting</strong> organization’s policies thatdefine its overall commitment to the six G3 and eightFood Processing sector Sourcing Aspects listed above.GoalsThe <strong>reporting</strong> organization should state its goals <strong>for</strong>each relevant Sourcing Aspect.Per<strong>for</strong>manceThe <strong>reporting</strong> organization should state the indicatorsthat it is using to demonstrate its progress againstits stated goals. Use indicators additional to the GRIPer<strong>for</strong>mance Indicators (as needed) to demonstrateprogress.Purchasing decision-makingThe <strong>reporting</strong> organization should state how it ensuresintegration of sustainability considerations into itspurchasing decisions.Management responsibilityThe <strong>reporting</strong> organization should state which level ofmanagement is responsible <strong>for</strong> managing the aboveSourcing Aspects.Training and awarenessThe <strong>reporting</strong> organization should state how itraises awareness and provides training within theorganization about the above Sourcing Aspects.Monitoring and Follow-UpThe <strong>reporting</strong> organization should state itsper<strong>for</strong>mance against the above goals, and anycorrective and preventive actions taken.Additional Contextual In<strong>for</strong>mationThe <strong>reporting</strong> organization should provide additionalrelevant in<strong>for</strong>mation required to understand itsper<strong>for</strong>mance, such as:• Key successes and shortcomings• Major organizational risks and opportunities• Major changes in the <strong>reporting</strong> period to systemsor structures to improve per<strong>for</strong>mance• Key strategies <strong>for</strong> implementing policies orachieving per<strong>for</strong>manceSourcing Per<strong>for</strong>mance IndicatorsTwo relevant new core indicators have beeninserted, being:ASPECT: ACROSS ALL ASPECTS OF SOURCINGCORECOREFP1FP2Percentage of purchased volume fromsuppliers compliant with company’ssourcing policy.Percentage of purchased volume whichis verified as being in accordance withcredible, internationally recognizedresponsible production standards, brokendown by standard.EnvironmentEnvironmental Per<strong>for</strong>mance IndicatorsThree relevant commentaries have been made,being:ASPECT: MATERIALSCORECOREEN1Materials used by weight or volume.Food Processing Sector-SpecificCommentary on EN1 Indicator Protocol:Commentary added to specify wildcaught and farmed seafood and otheridentified raw materials.ASPECT: BIODIVERSITYEN11 Location and size of land or watersowned, leased, managed in, or adjacentto, protected areas and areas of highbiodiversity value outside protected areas.CORECOREFood Processing Sector-SpecificCommentary on EN11 IndicatorProtocol:Commentaries added to include waters.FPFPFP38© 2011 GRI

ADDADDEN13 Habitats protected or restored.Food Processing Sector-SpecificCommentary on EN13 IndicatorProtocol:Commentaries added to include water.Product ResponsibilityProduct Responsibility Per<strong>for</strong>mance IndicatorsOne relevant commentary has been made, being:ASPECT: CUSTOMER HEALTH AND SAFETYCORECOREPR1 Life cycle stages in which health and safetyimpacts of products and services are assessed<strong>for</strong> improvement, and percentage of significantproducts and services categories subject tosuch procedures.Food Processing Sector-SpecificCommentary on PR1 Indicator Protocol:• Commentary added to includethe assessment of significantenvironmental and social impactsacross the life-cycle stages of productsand services.• Compilation added to report onprocedures, steps and results.FPFPSustainability Reporting Guidelines &Mining and Metals Sector SupplementContentsIn this publication, Mining and Metals sector contenthas been integrated into the G3 Guidelines. TheDisclosures and Per<strong>for</strong>mance Indicators in the Miningand Metals Sector Supplement make up the <strong>reporting</strong>framework <strong>for</strong> all organizations active in the miningand metals sector.Relevance <strong>for</strong> <strong>reporting</strong> on ecosystemservicesParts of the Mining and Metals Sector Supplement thatcould (potentially) be linked to the topic of ecosystemservices have been quoted below:EnvironmentA relevant commentary has been made in theintroduction, being:Mining and Metals Sector-SpecificCommentary:For the purposes of this Sector Supplement, theterm ‘biodiversity’ includes ecosystems and thegoods (e.g. timber, fodder, natural medicines,freshwater) and services (e.g. climate regulation,water purification, soil production, air qualityregulation) that they provide.Disclosure on Management <strong>Approach</strong>A relevant commentary has been made in respectof ‘Emissions, Effluents, and Waste’ (one of theEnvironmental Aspects to be reported upon in theDisclosure on Management <strong>Approach</strong>), being:MMMining and Metals Sector-SpecificCommentary:The disclosure on management approach regardingEmissions, Effluents, and Waste should includediscussion of:MM• Processes to assess and manage risksassociated with overburden, waste rock, tailings,sludges and other residues (<strong>for</strong> example,structural stability of storage facilities, metalleaching potential, and hazardous properties).<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosure39GRI Research andDevelopment SeriesI Research & DevelopmentTopicsReportingPractices

Sustainability Reporting Today: The Readers’ Verdict• Types of tailings facilities that it owns oroperates including riverine, lake and submarinetailings disposal, and the use of lined vs. unlinedpits.• <strong>Approach</strong>es taken to minimize waste and itspotential environmental impacts.MM• The management of fugitive emissions such asdust from mining and processing activities ornoise and seismic impacts from explosives usethrough, <strong>for</strong> example, monitoring activities andcompliance with regulatory limits.Environmental Per<strong>for</strong>mance IndicatorsFive relevant commentaries have been made andthree relevant new core indicators developed, being:ADDADDEN14 Strategies, current actions, and future plans<strong>for</strong> managing impacts on biodiversity.Mining and Metals Sector-SpecificCommentary on EN14 IndicatorProtocol:• Commentary added to describe therelevance of ecosystems services.• Commentary added to compilation toinvite <strong>reporting</strong> on ecosystems servicesand approaches.• Definition added <strong>for</strong> ‘ecosystemsservices’.• References added.MMASPECT: BIODIVERSITYEN12 Description of significant impacts ofactivities, products, and services onbiodiversity in protected areas and areas ofhigh biodiversity value outside protectedareas.CORECOREMining and Metals Sector-SpecificCommentary on EN12 IndicatorProtocol:• Commentary added to emphasizethe link to resettlement and closure MMactivities.• Compilation added to report onbiodiversity impacts of resettlement orclosure.COREMM2 The number and percentage of totalsites identified as requiring biodiversitymanagement plans according to statedcriteria, and the number (percentage) ofthose sites with plans in place.ASPECT: EMISSIONS, EFFLUENTS, AND WASTECORECOREEN22 Total weight of waste by type and disposalmethod.Mining and Metals Sector-SpecificCommentary on EN22 IndicatorProtocol:Commentary added to clarify the scope ofwaste in relation to MM3.MMMMCOREMM1 Amount of land (owned or leased, andmanaged <strong>for</strong> production activities orextractive use) disturbed or rehabilitated.MMCOREMM3 Total amounts of overburden, rock,tailings, and sludges and their associatedrisks.MMADDEN13 Habitats protected or restored.COREEN23 Total number and volume of significantspills.ADDMining and Metals Sector-SpecificCommentary on EN13 IndicatorProtocol:Compilation added to report onbiodiversity offsets.MMMining and Metals Sector-SpecificCommentary on EN23 IndicatorProtocol:• Commentary added to clarify thescope of spillages.MMCORE• Compilation added to report on theoutcome of spillage incidents.40© 2011 GRI

SocietySociety Per<strong>for</strong>mance IndicatorsOne relevant new core Indicator has beendeveloped, being:ASPECT: RESETTLEMENTCOREMM9 Sites where resettlements took place, thenumber of households resettled in each,and how their livelihoods were affected inthe process.Product responsibilityDisclosure on Management <strong>Approach</strong>A relevant addition has been made in respect ofManagement <strong>Approach</strong> items to be reported upon,being:The list of Management <strong>Approach</strong> items withrespect to the Product Responsibility Aspects hasbeen extended with:• Materials StewardshipProduct Responsibility Per<strong>for</strong>manceIndicatorsOne relevant new core Indicator has been inserted,being:ASPECT: MATERIALS STEWARDSHIPCOREMM11 Programs and progress relating to materialsstewardship.MMMM<strong>Approach</strong> <strong>for</strong> <strong>reporting</strong> on ecosystem services– Incorporating ecosystem services into an organization’s per<strong>for</strong>mance disclosure41GRI Research andDevelopment SeriesI Research & DevelopmentTopicsReportingPractices

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