4th in Series: The Food Industry – GRI & SASB Standards In Focus – Perspectives on Alignments & Differences

By Jessica Caron –  G&A Institute Sustainability Report Analyst Intern

A comparison of the SASB Meat, Poultry & Dairy Standard — which is designed for use by companies involved in the raising, slaughtering, processing and packaging of animal food product — to the GRI Standards must start with the observation that the GRI Standards are general and not industry-specific, asking about topics that apply to most business organizations (such as employee benefits).

The SASB industry standards focus on industry-specific ESG information — such as animal welfare.

The GRI Standards also, in being of value in generating a general portrait of any type of organization, suggest disclosure of a wide range of basic information — such as legal form and markets served as well as significant amounts of content with information directly related to corporate ESG strategies and performance.

The only basic information SASB Standards suggest in the category is information about the number of processing and manufacturing facilities, amount of animal protein produced by category, and percentage of animal protein production that is outsourced.

We should keep in mind SASB is investor-focused, and GRI is stakeholder focused (of course, including investors). And so the information suggested for disclosure by the reporter (the company disclosing) has different end users in mind when using either or both of the standards for corporate reporting.

The GRI Sector Disclosure:

The SASB suggested industry standards are more similar to the Sector Disclosures from the GRI G4, the predecessor of the GRI Standards. Each Sector Disclosure consists of additional disclosures and guidance for answering general GRI disclosures tailored to a certain industry, and thus attains the level of industry focus that the SASB standards have.

The GRI Sector Disclosure most similar to the SASB Meat, Poultry, and Dairy Standard is the Food Processing Sector Disclosure, which is designed for food processing companies rather than farmers, but including questions about a company’s supply chain, which does include farmers. The G4 Food Processing Sector Disclosure is discussed in more detail at the end of this commentary.

Being Prepared for Reporting:

In general, my advice is that corporate reporters should be prepared for using the GRI Standards to disclose much more information than the SASB Standards suggest.

For example, the GRI Standards by design suggest that a company should expect to report on every material ESG issue that affects the company, and the reporting in accordance with “Comprehensive” level reporting option prescribes a management approach (DMA) for every risk, opportunity, and topic mentioned in the issuer’s report. In comparison, SASB suggest a well-defined and narrower set of [material] data and suggests management approaches for just a few topics, such as water management risk.

Other Differences to Note:

The GRI Standards Disclosures have an entire section on economic issues; the SASB Standard does not. These issues are focused on the economic value generated, financial assistance received from the government, and benefit plan contributions. The GRI Standards also ask about anti-corruption practices and anti-competitive behavior (in the “Society” subcategory), which the SASB Standard does not.

The GRI Standards suggest more detailed information in general than the SASB Standard on environmental topics, but the SASB Standard’s suggested disclosures are at times more specific and are on the whole more industry-specific. The main environmental topics both standards deal with are energy, water, greenhouse gas (GHG) emissions, waste, and biodiversity.

The GRI Standards suggest information on an organization’s energy consumption, energy intensity, and reduction in energy consumption and requirements — in addition to the suggestion that at least one or all, depending on individual company’s materiality assessments, of the ESG issues — be discussed and a management plan provided for it. including energy issues.

In contrast, the only energy information the SASB standard asks for is how much total energy is consumed, and suggests a breakdown of that energy by grid electricity and renewable energy (where the GRI Standards do not).

Overlaps and Differences – E/Environmental:

The water disclosures for GRI and SASB do overlap a great deal – SASB even suggests discussion of water-related risks and management approaches; notably, use of the SASB Standards suggests companies to report water specific non-compliance incidents where GRI Standards has a disclosure which asks for the companies approach for environmental compliance overall.

In terms of the other three topics, SASB only suggests disclosure of Scope 1 GHG emissions, of the amount of animal waste generated, and of the percentage of pasture and grazing land managed to Natural Resources Conservation Service (NRCS) conservation plan criteria in the biodiversity section.

GRI suggests much more information for all three of these topics (because the GRI Standards are general, they ask about waste only in general terms, but they do suggest disclosure of types of waste generated).

However, SASB suggests disclosure of management approaches for GHG emissions and waste management, whereas GRI suggests disclosure of management approach for each GRI topic considered to be material to the company. The NRCS conservation plan can also be considered as part of a management approach.

Using the GRI Standards For Reporting – More Detailed

GRI is more detailed – by far – than SASB in its suggested disclosures related to employees and their human rights; GRI Standards ask about benefits, labor-management relations, training and education, gender pay equality, diversity and equal opportunity, non-discrimination, forced or compulsory labor, human rights training for security personnel, and grievance mechanisms in addition to employee health and safety — which is the only employee-related topic mentioned in SASB Standards.

SASB Standards, do, however, suggest a description of how respiratory health conditions (a problem in animal feedlots) are managed and prevented, an issue which is much more industry-specific and not specifically mentioned even in the GRI G4 Food Processing Sector Disclosures.

GRI also asks many questions about a company’s product responsibility and impact on society, whereas SASB does not.

Addressing “S” — Social Issues

The social issues GRI Standards ask about are indigenous rights (in the “Human Rights” subcategory); contributions to and effects on local communities; anti-corruption, anti-competitive behavior; consumer privacy and health and safety; compliance; marketing, labeling; and, grievance mechanisms for effects on society. SASB Standards focus on food safety. (Note that the GRI Standards suggests a discussion of markets that ban imports of the company’s products, which is often a food safety issue for the meat, poultry, and dairy industry. SASB Standards address this under the “Food Safety” section; other food safety topics are covered in the G4 Sector Disclosures.)

About Supply Chain Content

Both GRI and SASB Standards address disclosures on supply chain information — the information suggested by SASB Standards specifically address biodiversity, animal welfare, water stress, and climate change resilience in the meat, poultry and dairy supply chain (including discussion of plans to manage climate change risks and opportunities in the supply chain). These are of course all very important issues in the meat, poultry and dairy sector.

GRI in comparison suggests more general information about screening for environmental and social issues and local suppliers. (The Sector Disclosures address in general terms, supplier compliance with sourcing policies and international standards.)

The G4 Food Processing Sector Disclosures — which are the closest equivalent to the SASB Meat, Poultry & Dairy standards — suggest additional information in many sub-categories, such as product safety, and additional guidance for many aspects. (For example, it is noted that financial assistance from government may marginalize small-scale producers and have negative impacts on public health.)

The GRI Sector Disclosures also add information on sourcing practices to the procurement practices section (as discussed in the previous paragraph) and two new sections in the “Society” subcategory, on healthy and affordable food (which SASB does not mention) and animal welfare.

The GRI Sector Disclosures’ food safety questions relate to markets that ban the company’s products and the percentage of food manufactured in facilities accredited by a third party for food safety. SASB has more questions, including about recalls, and does ask about one third-party certification system, the Global Food Safety Initiative (GFSI).

Focus on Food Issues

The GRI Sector Disclosures also have sections on nutrition — specifically, on fortified foods and food reduced in saturated and trans fats, sodium, and added sugars – and marketing and labeling, especially marketing to vulnerable groups like children and pregnant women.

The SASB Standard does not address these issues. However, other than dairy products, most animal-based foods are not fortified with nutrients or reduced in fat, sodium, or sugar, perhaps making the GRI Sector Disclosures in this area of little relevance to the meat, poultry and dairy industry specifically.

In conclusion, I see the SASB Standard and the GRI Standards + G4 Food Processing Sector Disclosure each covering most of the environmental, social, and governance (ESG) topics relevant to the livestock industry, and together, the GRI and SASB standards fill in each other’s gaps to create a more complete ESG profile for any given company in the industry/sector.

Because some pieces of information are in differently-named categories across the standards, responding in the corporate reporting process to both standards does take a little extra work — but is very much possible and I think beneficial to do if the company seeks to be a sustainability leader in the industry (or industries) in which it operates.

Note:  This commentary is part of a series sharing the perspectives of G&A Institute’s Analyst-Interns as they examine literally thousands of corporate sustainability / responsibility reports.  Click the links below to read the first post in the series which includes explanations and the series introduction as well as the other posts in the series:

1st in Series: The Software / IT Services Industry – GRI & SASB Standards In Focus – Perspectives on Alignments & Differences

2nd in Series: The Agriculture Products Industry — GRI & SASB Standards In Focus – Perspectives on Alignments & Differences

3rd in Series: The Electric Utilities & Power Generators Industry – GRI & SASB Standards In Focus – Perspectives on Alignments & Differences

3rd in Series: The Electric Utilities & Power Generators Industry – GRI & SASB Standards In Focus – Perspectives on Alignments & Differences

By Jess Peete – G&A Institute Sustainability Report Analyst Intern

It is often the case that many us may not give our monthly energy utility company a second thought — unless there is an issue with the power going out or the bill is too high.

However, for those of us working in the sustainability field, the Energy Utilities Industry is one of the most important industries to consider, regardless of where we live or do business.

This industry’s companies power our homes, power our businesses, and in so many ways power our modern lives.

Traditionally, the energy utilities & power generators industry relied on oil and coal to generate supply for the power grid. This historic reliance on fossil fuels has more recently become a major issue in focus for investors, and society, as the effects of climate change continue to grow and the impact of burning fossil fuels for energy become more apparent.

Because of these effects on the environment and atmosphere, the Energy Utilities and Power Generators sector is today considered “high impact”.

Key sustainability reporting frameworks – including the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) — have sector-specific reporting standards (GRI has supplemental guidance that goes beyond their regular reporting requirements in order to more accurately measure the societal impact of the industry.)

Similarities and Differences in Standards

I’ve found that there is a great deal of similarity in the GRI Sector Supplements and SASB Industry standards for the Energy Utilities and Power Generation industry — but there are distinct differences as well.

The sector supplements only exist for GRI-G4, however, it is still advised for reporting organizations to now use the GRI Standards and incorporate the sector-specific disclosures from the GRI-G4 energy sector supplement to establish a more thorough industry-specific review of the total impact of the energy utilities sector.

The SASB Standards

SASB defines the materiality for the Energy Utilities sector reporting to include the following topics:

ENVIRONMENT

  • Greenhouse Gas Emissions & Energy Resource Planning
  • Air Quality
  • Water Management
  • Coal Ash Management

SOCIAL CAPITAL

  • Community Impacts of Project Siting

HUMAN CAPITAL

  • Workforce Health & Safety

BUSINESS MODEL AND INNOVATION

  • End-Use Efficiency & Demand

LEADERSHIP AND GOVERNANCE

  • Nuclear Safety & Emergency Management
  • Grid Resiliency
  • Management of the Legal & Regulatory Environment

Overall, the SASB standards appear to me to be quite comprehensive for a company to follow for their reporting — and would require reporting for many aspects of the electric power grid, including overall energy supply chain impacts.

For instance, SASB requires a calculation of Greenhouse Gases (GHG) emitted related to operations — but also requires a qualitative reporting of management-level planning to reduce the GHG emissions (emitted both from the company and its customers).

SASB addresses this in terms of recommending corporate reporting on negative environmental impacts — such things as coal ash and potential hazards such as posed by nuclear plants.

The GRI Standards

There appears to be little to no mention of coal ash storage in the GRI Standards — unless a company chooses to include coal ash as effluence.

This type of reporting could also be included in a company’s disclosure of their management approach (DMA) in the GRI Standards Report.

One area where the GRI standards seems to have a stronger “urging” for corporate reporting is the Sector impact on water, which is incredibly important because the energy utilities sector is one of the biggest users of water (usually required for cooling).

GRI Standards, in this case, appear to take a more holistic approach to water consumption (measuring total stress) while SASB only requires reporting the water impact from high stress areas.

Conclusion:

Because of the high impact that energy production and distribution have on climate, local communities, and the economy, companies in the Sector using both the GRI Standards and GRI G4 Energy Supplement alongside the SASB Energy Utilities Sector Supplement will be able to create a sustainability report that measures the true impact and costs of operations.

Measuring and managing these material E&S issues can help to provide both companies and investors in the sector a better understanding of their businesses, and a clear pathway to keeping consumer costs low while shifting to an energy portfolio that is one more based on sustainable energy.

Note:  This commentary is part of a series sharing the perspectives of G&A Institute’s Analyst-Interns as they examine literally thousands of corporate sustainability / responsibility reports.  Click the links below to read the first post in the series which includes explanations and the series introduction as well as the other posts in the series:

1st in Series: The Software / IT Services Industry – GRI & SASB Standards In Focus – Perspectives on Alignments & Differences

2nd in Series: The Agriculture Products Industry — GRI & SASB Standards In Focus – Perspectives on Alignments & Differences

4th in Series: The Food Industry – GRI & SASB Standards In Focus – Perspectives on Alignments & Differences

2nd in Series: The Agriculture Products Industry — GRI & SASB Standards In Focus – Perspectives on Alignments & Differences

By Emilie Ho – G&A Institute Sustainability Report Analyst Intern

During my analysis, I found that although many of the material disclosures that the SASB Standards suggest for disclosure by the Agriculture Products Industry are in line with the GRI’s Topic Disclosures, there are also a number of material topics that SASB advances for disclosure that do not have a related disclosure under the GRI Standards.

Interestingly, some of the material disclosures that do share overlap also have differences in what the two reporting frameworks suggest companies include in their sustainability reports. (Note that in the United States, use of both standards is voluntary for corporations.)

This commentary will explore some of these similarities and gaps between SASB and GRI to help corporate reporters better understand how these standards can be utilized for a company in the Agriculture Products Industry to report their environmental, social, and economic impacts more effectively.

At first glance, I found that the GRI Standards appear to seek more in-depth disclosures for some topics that they share in concept with the SASB Standards — but as a whole, the SASB Standards provide a more comprehensive view of agricultural practices due to the industry-specific disclosures and components suggested in its recommendations. These are not covered in as much depth under the GRI Standards.

As an example, SASB and GRI both include Greenhouse Gas (GHG) Emissions as an area for disclosure, and the disclosure of GHG emissions suggested by the two Standards’ organizations both account for Scope 1 emissions and biogenic carbon dioxide emissions.

Similarities and Differences to Consider

However, although SASB asks agricultural organizations to describe their long-term and short-term strategies of managing Scope 1 emissions and emission-reduction targets—something that is not specifically outlined under the GRI’s Emissions Topic Disclosure — GRI does suggest organizations that choose to report on emissions include a management approach that is used to cover components such as the policies, commitments, and goals and targets as they relate to the reporting organization’s emissions.

GRI expects reporting organizations to provide a management approach disclosure (otherwise known as the DMA) for every material topic chosen, or else explain why the management approach was not included at the time of reporting.

While the discussion encouraged by the GRI’s DMA is similarly suggested for some of the topics covered by SASB, it is not found in the SASB’s emissions materiality topic. Many of the industry-specific disclosures included in SASB could thus be improved by being covered using this management approach section of the GRI.

Emissions and Energy Related Disclosure

The GRI Standard’s Emissions Topic Disclosure also has more topic-specific components available for reporting — such as Scope 2 and Scope 3 GHG emissions, emissions of ozone-depleting substances, and other significant air emissions.

In this way, the GRI Standards would appear to be more comprehensive for the emissions materiality topic that it shares with SASB.

The same observation is found in Energy, which is also available as a material topic under SASB and a disclosure topic in the GRI Standards.

SASB Standards suggest reporting organizations disclose their consumption of operational energy fleet fuel — both of which are also covered under GRI’s topic-specific categories of energy consumption within and outside of the organization.

Both GRI and SASB also account for the amount of energy reduced through the use of renewable energy.

However, GRI Standards additionally ask reporting organizations to disclose their energy intensity and the reductions in energy requirements of sold products and services achieved during the reporting period.

Since this topic will be coupled with a management approach under the GRI, the organization’s Standards would appear to cover more ground than SASB Standards in the Energy topic disclosures, since this discussion is not required for the Energy material topic under SASB — however, the company could choose to disclose it in the DMA section.

Addressing Labor/HR Issues

Suggested disclosure content that relates to labor is also more extensive under GRI than SASB.

SASB Standards cover Food Safety and Health Concerns as it relates to the number of recalls issued and strategies used to manage genetically modified organisms (GMOs) and Fair Labor Practices and Workplace Health and Safety (as it pertains to whether farms are certified for fair labor practices, the data on injury rates, and how to assess, monitor and reduce exposure of employees to pesticides).  In comparison, the GRI Standards offer 19 available Social topics for companies to report on.

In particular, the labor/management relations and occupational health and safety topic specific disclosures share some overlap with those of SASB.

These topic-specific disclosures under the GRI Standards also suggest that companies report on hazard identification, risk assessment, promotion of worker health, prevention and mitigation of occupational health and safety impacts, and work-related injuries.

Agriculture-Specific Issues

SASB does take a more agriculture-focused approach because it asks specifically for data on topics such as recalls, GMOs, and farms certified for fair labor practices; these are not similarly asked for under the GRI Standards.

The Land Use and Ecological Impacts, Climate Change Impacts on Crop Yields, and Environmental and Social Impacts of Ingredient Supply Chains material issues identified by SASB are other examples where SASB takes a more comprehensive approach to reporting for the Agricultural industry’s specific issues.

These SASB Standards disclosures ask organizations to report on topics such as the amount of crop yields/lost, percentage of agricultural raw materials certified to third-party environmental/social standards, amount of pesticide consumption by hazard level, and volume of wastewater reused/discharged to the environment.

The available disclosures following the GRI Standards do not appear to directly encompass these agriculture-specific components (even in the GRI Food Processing Sector Supplement), making GRI reporting as a whole appear to be not as comprehensive for the Agriculture sector — despite GRI requiring more detail for those disclosures that do intersect with SASB.

Agricultural organizations that choose to report without following SASB Standards and / or the Food Processing Sector Supplement may, therefore, result in a more restricted view of those organizations’ agriculture-specific practices — despite them being in line with GRI Standards reporting.

My Conclusions

Moving forward, corporations in the Agricultural sector can improve their sustainability reports by using both the GRI Standards and the SASB Standards for the collection, measurement, analysis and reporting of their environmental, social, and economic data.

This integrative approach to reporting would enable corporations to create a much more comprehensive sustainability report, by allowing the enterprise to take advantage of both SASB’s industry-specific disclosure recommendations and GRI’s broader topic-specific recommendations.

# # #

Note about GRI’s Sector Disclosure — from the GRI’s website FAQ: “With the transition from G4 Guidelines to GRI Standards, the G4 Sector Disclosures remain valid. The use of the G4 Sector Disclosures is recommended for organizations using the GRI Standards, but is not a requirement for preparing a report in accordance with the Standards (see GRI 101: Foundation, Section 2 for more detail).”

Note:  This commentary is part of a series sharing the perspectives of G&A Institute’s Analyst-Interns as they examine literally thousands of corporate sustainability / responsibility reports.  Click the links below to read the first post in the series which includes explanations and the series introduction as well as the other posts in the series: