Dawn Of A Concept
In effect, the GRI story harks back to the Exxon Valdez oil spill in Prince William Sound in l989. By then, there were discussions in the Social Investment Forum about how to apply the lessons of the South African divestment movement to the environment.
Socially responsible investment pioneer Joan Bavaria, founder of Boston-based Trillium Asset Management, pulled together a coalition of leading environmental activists and social investors. Christened the Coalition for Environmentally Responsible Economies (later re-branded Ceres), the idea was to ask companies to go beyond the letter of the American law to practice what she called an "environmental ethic."
Later that year, Ceres issued the so-called Valdez Principles (later renamed the Ceres Principles), a framework for environmental conduct. The principles addressed issues such as using natural resources in a sustainable fashion, reducing and properly disposing of waste, and environmental restoration.
It soon became clear that principles without accounting would be vacuous. In response, Ceres developed an initial framework for environmental measurement and disclosure. But according to Allen White, Senior Fellow at the Tellus Institute, which consulted for Ceres on the endeavor, only about 15 companies had signed on after Ceres had engaged with American companies for five or six years.
"The whole idea of environmental disclosure was still very new," he says.
Beer-Inspired Inspiration
The GRI was conceived in a Chicago bar on a summer night in l997. White and then-Ceres president Bob Massie, now a Democratic candidate in Massachusetts for the U.S. Senate, had just left meeting with yet another reticent American company.
"We came out of the meeting frustrated, and it was not the first time we were frustrated," White recalls, adding that the two men had an "epiphany over a couple of beers and a profound sense of frustration."
The epiphany: Don't wait for the US to catch up with the idea of environmental disclosure. Be bold. Go global. Go where they believed they would have more interest and more readiness. In particular, White says, there were already several initiatives in Europe.
Massie describes the eureka moment as a more deliberative process. "We said, 'Let's just back up. If we could have anything we wanted, what would it be?
"We started to imagine the project," he continues. That image was a generally accepted system of environmental measurement and disclosure like GAAP-one that's managed, expanded and improved by a standard setting body like FASB.