Contracts with human rights clauses or screening (G4-HR1-a) Methodology
In 2018, the GRI G4 Sustainability Reporting Guidelines were superseded by the GRI Sustainability Reporting Standards (GRI standards). This is the methodology for G4-HR1-a, which has been superseded by GRI 412-3. The new GRI 412-3 metrics can be found here:
- Number of investment agreements and contracts that include human rights clauses, screening GRI 412-3-a
- Percentage of investment agreements and contracts that include human rights clauses, screening GRI 412-3-a
About
This metric is based on the Global Reporting Initiative (GRI) G4 Guidelines. It covers one of the reporting requirements of Indicator G4-HR1 - `Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening`.
This Indicator is one measure of the extent to which human rights considerations are integrated in an organization’s economic decisions. This is particularly relevant for organizations that operate within, or are partners in ventures in, regions where the protection of human rights is of significant concern. Integrating human rights criteria in screening or including human rights in performance requirements may be part of a strategy to reduce the risks of investment. Problems with an organization’s human rights record may result in reputational damage for the investing organization and may affect the stability of investments.
Methodology
To calculate the total number of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening - G4-HR1-a:
- Identify the total number of significant investment agreements and contracts finalized during the reporting period that either moved the organization into a position of ownership in another entity or initiated a capital investment project that was material to financial accounts.
- Identify only the agreements and contracts that are significant in terms of size or strategic importance.
- Identify if these agreements and contracts contain clauses on human rights. If so, count the total number of agreements that contain these clauses.
- Identify programs undertaken to screen existing agreements or contracts for human rights. Count the total number of agreements or contracts that underwent human rights screening.
- Calculate the percentage by comparing the total number of significant agreements and contracts that contain clauses or were screened with those that do not contain clauses or that did not undergo human rights screening.
Organizations reporting on this disclosure should include the following information as a comment to the metric value:
- G4-HR1-b: The definition of ‘significant investment agreements’ used by the organization.