Global Reporting Initiative & IT: Reporting Circular Economy Practices

The Global Reporting Initiative (GRI) is a widely recognized, well-respected organization that provides frameworks for sustainability reporting. Its guidelines, particularly those specific to emissions and other materiality topics, can be used to report circular economy practices. 

In a 2021 report, the Ellen MacArthur Foundation found that 55% of emissions can be addressed with renewable energy, but a circular economy may solve the remaining emissions. As discussed in another article, the Information Technology (IT) industry is well-positioned to embrace a circular economy. And if your business has embraced those practices in some way or form, pat yourself on the back and report on it for transparency and accountability. 

This article discusses the GRI and its frameworks, focusing on the circular economy in particular, and which frameworks can be used to report on circular practices. 

A Glance at Global Reporting Initiative (GRI)

GRI has existed since 1997, when conversations about climate change started to get louder. The non-profit organization collaborates with the United Nations Environment Programme (UNEP) and the Coalition for Environmentally Responsible Economies (CERES). 

GRI’s mission has been to enable organizations to understand and communicate their impact on people and the environment. To do that, GRI has created detailed frameworks, commonly called the GRI Standards. 

These standards offer detailed guidelines for organizations to collect, understand, and report data detailing their impact. The standards or guidelines cover various topics related to material impact, with some focusing on a specific sector while others concentrate on a particular topic. 

Here’s a brief explanation of the GRI Standards:

• Universal Standards: GRI 1, 2, and 3 are universal standards that organizations can follow. These standards provide the foundation for reporting and must be covered before proceeding to sector or topic-specific standards. 
• Sector-Specific Standards: GRI’s sector-specific standards provide guidelines for reporting for organizations in a particular sector. These are typically identified by a two-digit code, such as GRI 11 for oil/gas, GRI 12 for coal, and GRI 14 for mining. 
• Topic-Specific Standards: GRI’s topic-specific standards, which have three-digit codes, provide reporting guidelines related to certain aspects of operations or resources. The GRI 3 Material Topics Standard can help companies determine which topics are most relevant to their industry, operations, and stakeholders. 

Circular Economy Principles and Practices in IT

You’re probably familiar with the phrase ‘reduce, reuse, and recycle.’ That’s pretty much the essence of the circular economy. While there are several different principles of circular economy and varied implementations of that, here are the core tenets of a circular economy: 

• Minimizing waste by engaging in design and production processes that help extend the lifespan of goods. 
• Finding ways to reuse products and materials to extend their lifespan and keep them in use for a long time (as long as possible). 
• Recycle products and create raw materials from them to be used for new products. 
• Recovering materials or energy from products that can’t be used or recycled anymore. 

In the IT sector, these principles can translate into various innovative ideas, such as:

• Designing for Sustainability: Creating modular, repairable, and recyclable products.
• Extending Product Lifespan: Refurbishing and reselling hardware or offering extended warranty programs.
• Waste Reduction: Implementing take-back programs and recycling initiatives to recover valuable materials.
• Service-Based Models: Adopting Software-as-a-Service (SaaS) and leasing models to reduce hardware obsolescence.

If your company, whether directly a part of the tech sector or not, is doing any of the above, you’re helping adopt the circular economy. It’s worth noting as part of your company’s formal reporting of operational impact. 

How to Report Circular Economy Practices Using GRI Standards?

The GRI Standards cover a wide range of aspects of business operations. While general disclosures try to take an all-rounder approach, topic-specific standards tend to focus on a particular area. Not every GRI topic standard may cover activities linked to circular economy practices. 

Before you choose a topic-specific standard, you should conduct a material assessment to determine which topics you should focus on based on your industry and business model. 

Generally, the following GRI Standards can be used to assess and report circular economy practices:

GRI 301: Materials

The GRI 301 focuses on the topics of materials. It can be used by any company, regardless of size or industry. But it would be most relevant for a company producing materials or manufacturing products. In the IT sector, that could be hardware manufacturer. 

This framework can help report the use of recycled or renewable materials. It can be used to report on initiatives to minimize raw material consumption. 

Many tech vendors like Dell and Cisco have used recycled materials to construct equipment parts in recent years. The framework outlined in this standard can help report such activities and their impact on the company’s carbon footprint and the environment. 

GRI 306: Waste

The GRI 306 standard is the most relevant to a circular economy, as its idea is to reduce waste. This framework is designed to highlight efforts in e-waste management, including collection and recycling rates. It can document the outcomes of any take-back programs (like the one we run here at PivIT). 

This standard can help companies report their efforts to reduce waste and improve waste management in a structured way. It can help quantify those activities and show the exact impact such efforts make in the real world. 

GRI 302: Energy

The GRI 302 Standard on energy consumption can also be used to report circular economy practices that help reduce energy usage. For instance, you may share data on renewable energy usage in data centers and operational facilities. Similarly, you can report energy efficiency measures and their impact on resource consumption.

GRI 305: Emissions

The GRI 305 Standard exclusively focuses on emissions for companies that want to quantify the environmental impact of their operations. As circular economy practices essentially help offset and reduce emissions, those can also be accounted for through this specific framework. For instance, you may be able to quantify the emissions you’ve avoided by buying used equipment instead of new ones. 

Benefits of using GRI

Reporting a company's environmental impact, even if it’s an SME, can be pretty complicated. That’s why frameworks like GRI come in handy: they provide a systematic way for companies to collect, assess, and report on data. 

Here are some advantages of using GRI Standards for reporting:

• Transparency: The GRI Standards ensure transparency in reporting. Their guidelines are comprehensive and also emphasize the source of the data. So, companies that follow these standards closely report findings transparently that people can trust. 
• Stakeholder Engagement: The GRI Standards encourage stakeholder involvement in reporting. This can help ensure everyone is on the same page and that companies can also consider the impact they directly have via stakeholders like customers or suppliers. 
• Environmental Risk Management: The standards also allow businesses to identify risks their operations create for the people and the environment. This can help guide their sustainability strategy. 
• Recognized Standard: The GRI Standards for environmental reporting are globally accepted. It can be used to comply with government regulations, satisfy investors, and disclose environmental impact data to the public. 

Why Report Your Circular Economy Initiatives?

According to climate experts, Circular economy practices answer the pressing need for emission reductions. If you’re doing something about it, why not disclose it?

Reporting on circular economy initiatives can help you understand the real impact of your efforts. That, in turn, can guide your future sustainability strategy. You’ll know what works and what doesn’t. 

Plus, it can be used for stakeholder or public reporting (where required) to showcase the company's future and efforts to do its part for the environment. In case you didn’t know, investors and consumers lean toward eco-conscious businesses. 

Lastly, reporting your circular economy practices in IT may inspire others to take similar initiatives.

Communicate Your Efforts

Whether you must report on your carbon footprint or have investors interested in your operations' environmental performance, the GRI Standard is a good place to start preparing reports. 

Begin with the GRI 1 Standard, followed by GRI 2 and 3, which will help you determine which sector—or topic-specific standards you should use. However, businesses can also independently choose the standard they want to follow to create sustainability reports. 

Reporting on circular economy practices or any sustainable efforts, for that matter, is suitable for compliance, business, and, of course, the planet. 

FAQs

Why should companies report circular economy initiatives using GRI standards?

GRI standards provide a structured and globally recognized framework for sustainability reporting. Reporting circular economy initiatives enhances transparency, helps track progress, and strengthens stakeholder trust while aligning with regulatory requirements.

Who can use GRI?

Companies of any size or industry can use the GRI Standards to report their impact on the environment and people. While there are industry-specific standards, there are generalized standards that any business can use in any country. 

 Which GRI Standard is most relevant to circular economy practices?

The GRI 306 Waste Standard can be used to report reuse and recycling efforts, which typically form the crux of circular economy projects. Similarly, the GRI 301 Materials Standard can be used to report the use of recycled materials.