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GRI Training Partner GRI 204 · Procurement Practices · Disclosure GRI 204-1

Proportion of spending on local suppliers

GRI 204-1 · mandatory · coverage + narrative

Disclosure 204-1 requires an organization to report the percentage of the procurement budget used for significant locations of operation that is spent on suppliers local to those operations. The organization also reports its geographical definition of local and the definition it uses for significant locations of operation.

Legal status

GRI 204: Procurement Practices 2016 remains applicable at the date of this review. It is included in Phase 3 of GRI's Economic Impact project; no revised GRI 204 Standard is yet applicable.

Start preparing ↓ Official Global Reporting Initiative source ↗

Disclosure focus

A local supplier is an organization or person that provides a product or service to the reporting organization and is based in the same geographic market, with no transnational payment made to that supplier. The geographic market can be the surrounding community, a region within a country, or the country as a whole.

GRI recommends calculating the percentage using invoices or commitments made during the reporting period, for example through accrual accounting. The numerator and denominator should use the same procurement categories, reporting period, organizational scope and accounting basis. Supplier count is not a substitute for procurement spending.

Purchases made centrally by headquarters for significant locations should be included where they relate to those locations. Different geographic definitions of local can be used where justified by operating context, provided each definition is disclosed and applied consistently.

This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official Global Reporting Initiative source.

Prepare

What to collect before drafting

Tick each field as the evidence lands. Owners are the teams that usually hold the source files.

  • Definition of significant locations of operation

    Legal / Compliance / Sustainability Reporting

    Required. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting definition of significant locations of operation.

    Watch for The published response for definition of significant locations of operation is incomplete or does not match the supporting records.

  • List of significant locations

    Sustainability Reporting / data owner

    Necessary to apply the definition. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting list of significant locations.

    Watch for The published response for list of significant locations is incomplete or does not match the supporting records.

  • Geographic definition of local

    Procurement / Finance / Sustainability Reporting

    Required. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting geographic definition of local.

    Watch for The published response for geographic definition of local is incomplete or does not match the supporting records.

  • Supplier legal entity

    Legal / Compliance / Sustainability Reporting

    Required methodological information. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting supplier legal entity.

    Watch for The published response for supplier legal entity is incomplete or does not match the supporting records.

  • Geographic market

    Sustainability Reporting / data owner

    Required. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting geographic market.

    Watch for The published response for geographic market is incomplete or does not match the supporting records.

  • Transnational payment check

    Sustainability Reporting / data owner

    Required by official definition. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting transnational payment check.

    Watch for The published response for transnational payment check is incomplete or does not match the supporting records.

  • Reporting period

    Sustainability Reporting / data owner

    Required contextual information. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting reporting period.

    Watch for The published response for reporting period is incomplete or does not match the supporting records.

  • Invoice or commitment basis

    Sustainability Reporting / data owner

    Recommended by GRI. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting invoice or commitment basis.

    Watch for The published response for invoice or commitment basis is incomplete or does not match the supporting records.

  • Total procurement budget

    Procurement / Finance / Sustainability Reporting

    Required denominator. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting total procurement budget.

    Watch for The published response for total procurement budget is incomplete or does not match the supporting records.

  • Local supplier procurement spend

    Procurement / Finance / Sustainability Reporting

    Required numerator. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting local supplier procurement spend.

    Watch for The published response for local supplier procurement spend is incomplete or does not match the supporting records.

  • Local supplier spending percentage

    Procurement / Finance / Sustainability Reporting

    Required. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting local supplier spending percentage.

    Watch for The published response for local supplier spending percentage is incomplete or does not match the supporting records.

  • Procurement categories included

    Procurement / Finance / Sustainability Reporting

    Required methodological information. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting procurement categories included.

    Watch for The published response for procurement categories included is incomplete or does not match the supporting records.

  • Procurement categories excluded

    Procurement / Finance / Sustainability Reporting

    Required methodological information. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting procurement categories excluded.

    Watch for The published response for procurement categories excluded is incomplete or does not match the supporting records.

  • Central procurement allocation

    Procurement / Finance / Sustainability Reporting

    Required where applicable. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting central procurement allocation.

    Watch for The published response for central procurement allocation is incomplete or does not match the supporting records.

  • Intercompany treatment

    Sustainability Reporting / data owner

    Required methodological information. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting intercompany treatment.

    Watch for The published response for intercompany treatment is incomplete or does not match the supporting records.

  • Credit notes and cancellations

    Sustainability Reporting / data owner

    Required methodological information. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting credit notes and cancellations.

    Watch for The published response for credit notes and cancellations is incomplete or does not match the supporting records.

  • Foreign currency conversion

    Sustainability Reporting / data owner

    Required where applicable. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting foreign currency conversion.

    Watch for The published response for foreign currency conversion is incomplete or does not match the supporting records.

  • Supplier-count information

    Procurement / Finance / Sustainability Reporting

    Additional only; not a substitute for spending. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting supplier-count information.

    Watch for The published response for supplier-count information is incomplete or does not match the supporting records.

  • Estimates and manual overrides

    Sustainability Reporting / data owner

    Required where applicable. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting estimates and manual overrides.

    Watch for The published response for estimates and manual overrides is incomplete or does not match the supporting records.

  • Reconciliation to audited or internally audited accounts

    Sustainability Reporting / data owner

    Recommended. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting reconciliation to audited or internally audited accounts.

    Watch for The published response for reconciliation to audited or internally audited accounts is incomplete or does not match the supporting records.

  • Reason for omission

    Sustainability Reporting / data owner

    Required in GRI content index where an applicable requirement is omitted. Capture and reconcile this item using the scope, defined terms and calculation basis in the reviewed Disclosure focus.

    Evidence Approved source records, calculation files, reconciliations and review evidence supporting reason for omission.

    Watch for The published response for reason for omission is incomplete or does not match the supporting records.

Before you start

  • Disclosure 204-1 requires an organization to report the percentage of the procurement budget used for significant locations of operation that is spent on suppliers local to those operations. The organization also reports its geographical definition of local and the definition it uses for significant locations of operation.
  • Apply Disclosure 204-1 when the related topic is material and this disclosure is relevant to the organisation's impacts, or when an applicable GRI Sector Standard identifies it for reporting.
  • Have the supporting records and the final response been reconciled?
＋ Show GRI 204-1 sub-elements (LRA working checklist)

How to prepare it

Disclosure 204-1 requires an organization to report the percentage of the procurement budget used for significant locations of operation that is spent on suppliers local to those operations. The organization also reports its geographical definition of local and the definition it uses for significant locations of operation.
Collect and reconcile the records for: Definition of significant locations of operation; List of significant locations; Geographic definition of local; Supplier legal entity; Geographic market; Transnational payment check; Reporting period; Invoice or commitment basis; Total procurement budget; Local supplier procurement spend; Local supplier spending percentage; Procurement categories included; Procurement categories excluded; Central procurement allocation; Intercompany treatment; Credit notes and cancellations; Foreign currency conversion; Supplier-count information; Estimates and manual overrides; Reconciliation to audited or internally audited accounts; Reason for omission.
Apply Disclosure 204-1 when the related topic is material and this disclosure is relevant to the organisation's impacts, or when an applicable GRI Sector Standard identifies it for reporting.
Draft the response using the defined terms shown in the disclosure focus; do not substitute broader internal labels.
Review the final wording against every requirement and the supporting governance or data records before sign-off.

Request the data

Request the disclosure evidence

Translate the disclosure into an internal business question — then adapt it to your organisation's own language.

Provide the reporting-period records and reconciliations for Disclosure 204-1: Definition of significant locations of operation; List of significant locations; Geographic definition of local; Supplier legal entity; Geographic market; Transnational payment check; Reporting period; Invoice or commitment basis; Total procurement budget; Local supplier procurement spend; Local supplier spending percentage; Procurement categories included; Procurement categories excluded; Central procurement allocation; Intercompany treatment; Credit notes and cancellations; Foreign currency conversion; Supplier-count information; Estimates and manual overrides; Reconciliation to audited or internally audited accounts; Reason for omission. Include scope, definitions, methods, assumptions, limitations, owners and approvals.

Use the organisation's own role and document names, but preserve the defined GRI terms and the scope described above.

Better request

Provide the reporting-period records and reconciliations for Disclosure 204-1: Definition of significant locations of operation; List of significant locations; Geographic definition of local; Supplier legal entity; Geographic market; Transnational payment check; Reporting period; Invoice or commitment basis; Total procurement budget; Local supplier procurement spend; Local supplier spending percentage; Procurement categories included; Procurement categories excluded; Central procurement allocation; Intercompany treatment; Credit notes and cancellations; Foreign currency conversion; Supplier-count information; Estimates and manual overrides; Reconciliation to audited or internally audited accounts; Reason for omission. Include scope, definitions, methods, assumptions, limitations, owners and approvals.

Draft your disclosure

Notes that turn data into a disclosure

LRA training templates — adapt them to your organisation, and check the official source before sign-off.

Method note

Purchases made centrally by headquarters for significant locations should be included where they relate to those locations. Different geographic definitions of local can be used where justified by operating context, provided each definition is disclosed and applied consistently.

Context note

Keep mandatory Requirements, GRI recommendations and additional LRA preparation controls clearly distinguished. Use a GRI 1 reason for omission where an applicable requirement cannot be reported.

Download Centre

Preparation tools & forms

Download preparation tools for GRI 204-1 with free verified email access for 24 hours. Source-report links remain public.

Free · Email access
01XLSPrep & Assurance workbookDatapoints, risks, evidence to check, owner and evidence pack.Get it free ↧ 02XLSData-request packRequest email, message template, response fields and sign-off structure.Get it free ↧ 03PDFLibrary CardPrintable one-page summary of this disclosure card.Get it free ↧

Check

For each claim, check the evidence

  • Definition of significant locations of operation is reported accurately and completely.

    Risk The response omits, misclassifies or overstates definition of significant locations of operation.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting definition of significant locations of operation.

  • List of significant locations is reported accurately and completely.

    Risk The response omits, misclassifies or overstates list of significant locations.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting list of significant locations.

  • Geographic definition of local is reported accurately and completely.

    Risk The response omits, misclassifies or overstates geographic definition of local.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting geographic definition of local.

  • Supplier legal entity is reported accurately and completely.

    Risk The response omits, misclassifies or overstates supplier legal entity.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting supplier legal entity.

  • Geographic market is reported accurately and completely.

    Risk The response omits, misclassifies or overstates geographic market.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting geographic market.

  • Transnational payment check is reported accurately and completely.

    Risk The response omits, misclassifies or overstates transnational payment check.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting transnational payment check.

  • Reporting period is reported accurately and completely.

    Risk The response omits, misclassifies or overstates reporting period.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting reporting period.

  • Invoice or commitment basis is reported accurately and completely.

    Risk The response omits, misclassifies or overstates invoice or commitment basis.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting invoice or commitment basis.

  • Total procurement budget is reported accurately and completely.

    Risk The response omits, misclassifies or overstates total procurement budget.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting total procurement budget.

  • Local supplier procurement spend is reported accurately and completely.

    Risk The response omits, misclassifies or overstates local supplier procurement spend.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting local supplier procurement spend.

  • Local supplier spending percentage is reported accurately and completely.

    Risk The response omits, misclassifies or overstates local supplier spending percentage.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting local supplier spending percentage.

  • Procurement categories included is reported accurately and completely.

    Risk The response omits, misclassifies or overstates procurement categories included.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting procurement categories included.

  • Procurement categories excluded is reported accurately and completely.

    Risk The response omits, misclassifies or overstates procurement categories excluded.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting procurement categories excluded.

  • Central procurement allocation is reported accurately and completely.

    Risk The response omits, misclassifies or overstates central procurement allocation.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting central procurement allocation.

  • Intercompany treatment is reported accurately and completely.

    Risk The response omits, misclassifies or overstates intercompany treatment.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting intercompany treatment.

  • Credit notes and cancellations is reported accurately and completely.

    Risk The response omits, misclassifies or overstates credit notes and cancellations.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting credit notes and cancellations.

  • Foreign currency conversion is reported accurately and completely.

    Risk The response omits, misclassifies or overstates foreign currency conversion.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting foreign currency conversion.

  • Supplier-count information is reported accurately and completely.

    Risk The response omits, misclassifies or overstates supplier-count information.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting supplier-count information.

  • Estimates and manual overrides is reported accurately and completely.

    Risk The response omits, misclassifies or overstates estimates and manual overrides.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting estimates and manual overrides.

  • Reconciliation to audited or internally audited accounts is reported accurately and completely.

    Risk The response omits, misclassifies or overstates reconciliation to audited or internally audited accounts.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting reconciliation to audited or internally audited accounts.

  • Reason for omission is reported accurately and completely.

    Risk The response omits, misclassifies or overstates reason for omission.

    Evidence to check Approved source records, calculation files, reconciliations and review evidence supporting reason for omission.

Evidence pack to prepare

Common reporting gaps

  • Using supplier count instead of the proportion of procurement spending.
  • Changing the geographic definition of local without disclosing and applying it consistently.
  • Using internal labels in place of the defined GRI terms.
  • Leaving a required preparation field unsupported by traceable evidence.
  • Treating GRI recommendations as mandatory requirements or mandatory requirements as optional.
  • Publishing estimates, exclusions or partial scope without methods, assumptions and the applicable reason for omission.
✓ Knowledge Hub AI Assistant · Human-in-the-loop
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Framework references

Relevant GRI requirements and related disclosures

GRI

GRI 204-1

within GRI 204: Procurement Practices

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