University of Vaasa - Vaasan yliopisto

Table 1. Features in the various phases of a GRI implementation
Characterizing
features
Integration level of
sustainable
reporting
Use of
sustainability data
Data collection
cycle
Phase 1: Discrete
implementation of
GRI for external
reporting purposes
(discrete external)
- Stand-alone
external report
- External reporting
not utilized in
performance
management
- Annual data
collection
Phases
Phase 2: Use of GRI
for internal
performance
management
purposes
(discrete external,
internal)
- Internal reports and
benchmarking
- Group level
performance targets
established -
Sophisticated data
collection methods
including internal
controls for data
quality
- Monthly or
quarterly data
collection
Auditing - External assurance
355
Phase 3: Integrating
GRI into financial
reporting and
valuation
(integrated external
and internal)
- Integrated into
financial reporting
cycle and processes
- Analysis of
financial drivers
based on
performance data
- Integrated data
collection into
financial accounting
systems
- Integrated assurance
framework
An example of third phase integration is a Danish pharmaceuticals company Novo
Nordisk 2 , which has fully integrated sustainability disclosure in the financial
reporting. In the annual report, the company presents consolidated sustainability key
figures, performance indicators and related accounting principles following the
financial statements format. This report is named as consolidated non-financial
statements. In the review of board of directors the company provides discussion and
analysis of sustainability impacts, risks and opportunities on business and financial
performance. All the disclosed information is also externally assured by the auditors.
Reaching the phase 3 level implementation is often an incremental development
process. However, starting firms could even speed up their sustainability process and
target more directly towards phase three. Next we analyze how sustainability of
Finnish listed firms will be positioned to the three phases characterized above.