In 2018, the GRI G4 Sustainability Reporting Guidelines were superseded by the GRI Sustainability Reporting Standards (GRI standards). This is the methodology for G4-EC1-a which has been superseded by GRI 201-1 - the current GRI 201-1 metric can be found here.

About

This metric is based on the Global Reporting Initiative (GRI) G4 Guidelines. It covers one of the reporting requirements of Indicator G4-EC1 – ‘Direct economic value generated and distributed’.

Information on the creation and distribution of economic value provides a basic indication of how the organization has created wealth for stakeholders. Several components of the economic value generated and distributed (EVG&D) also provide an economic profile of the organization, which may be useful for normalizing other performance figures. If presented in country-level detail, EVG&D can provide a useful picture of the direct monetary value added to local economies.

Methodology

To calculate the direct economic value that the company distributes -  GRI Standard 201 - Economic Performance:

• Compile the EVD data, where possible, from data in the organization’s audited financial or profit and loss (P&L) statement, or its internally audited management accounts.

The distribution categories include:

• Operating costs

  • Cash payments made outside the organization for materials, product components, facilities, and services purchased. This includes property rental, license fees, facilitation payments (since these have a clear commercial objective), royalties, payments for contract workers, employee training costs (where outside trainers are used), or employee protective clothing

   
  Employee wages and benefits

  • Total payroll comprises employee salaries, including amounts paid to government institutions (such as employee taxes, levies, and unemployment funds) on behalf of employees. Non-employees working in an operational role are normally not included here, but rather under operating costs as a service purchased
  • Total benefits include regular contributions (such as to pensions, insurance, company vehicles, and private health), as well as other employee support such as housing, interest-free loans, public transport assistance, educational grants, and redundancy payments. They do not include training, costs of protective equipment, or other cost items directly related to the employee’s job function

   
  Payments to providers of capital

  • Dividends to all shareholders
  • Interest payments made to providers of loans. This includes interest on all forms of debt and borrowings (not only long-term debt) and also arrears of dividends due to preferred shareholders

   
  Payments to government

  • All organization taxes (such as corporate, income, property) and related penalties paid at the international, national, and local levels. This figure does not include deferred taxes because they may not be paid. For organizations operating in more than one country, report taxes paid by country. Report the definition of segmentation used

   
  Community investments

  • Voluntary donations and investment of funds in the broader community where the target beneficiaries are external to the organization. These include contributions to charities, NGOs and research institutes (unrelated to the organization’s commercial R&D), funds to support community infrastructure (such as recreational facilities) and direct costs of social programs (including arts and educational events). The amount included accounts for actual expenditures in the reporting period, not commitments
  • For infrastructure investments, the calculation of the total investment is meant to include costs of goods and labor, in addition to capital costs. For support of ongoing facilities or programs (such as an organization funding the daily operations of a public facility), the reported investment includes operating costs
  • This excludes legal and commercial activities or where the purpose of the investment is exclusively commercial. Donations to political parties are included but are also addressed separately in more detail in G4-SO6
  • Any infrastructure investment that is driven primarily by core business needs (such as building a road to a mine or factory) or to facilitate the business operations of the organization is not included. The calculation of investment may include infrastructure built outside the main business activities of the organization, such as a school or hospital for employees and their families

Reporting on this Indicator should include the following contextual information as a comment to the metric value:

• The EVD per distribution catergory (Operating costs / Employee wages and benefit / Payments to providers of capital / Payments to government (by country) / Community investments)
• G4-EC1-b: Where significant report EVD data separately at country, regional, or market levels, to better assess local economic impacts. Report the criteria used for defining significance. 

For Wikirate Researchers:

• Please see this page for guidelines on how to research values for GRI-based metrics.