Disclosure focus
This disclosure asks an organisation to explain how much of its purchasing spend goes to suppliers based in the same local area or country as its operations, compared with total procurement spend. The point is to show the share of spending that supports local supply chains, rather than simply naming a few local suppliers or describing a sourcing policy.
The practical focus is on the scope used for the calculation and whether it covers the organisation’s full operations or only selected sites, business units, or regions. A clear explanation of what counts as “local”, what spend is included, and how the figure was calculated helps readers understand the result and compare it with other reporting periods.
This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official GRI source.
Before you start
A quick mental checklist before you prepare this disclosure — tick each as you settle it.
Preparation
Key datapoints to prepare
＋ Show GRI 204-1 sub-elements (LRA working checklist)
Use the definition that applies to significant operating locations.
Apply the geographic meaning of local.
Work out what share of the procurement budget for those significant sites goes to suppliers based in the same area as the site.
How to prepare it
1Set the reporting boundary first: list the operating sites you will treat as in scope, and agree which of them count as significant for this disclosure.
2Write down your working definition of a local supplier, using a clear geographic rule that can be applied consistently across the sites you include.
3Pull together the procurement spend for the in-scope sites, then identify the portion paid to suppliers that meet your local-supplier rule.
4Calculate the share as a percentage of the relevant procurement budget, making sure the numerator and denominator are built from the same scope and time period.
5Keep the supporting records that show how the site list, local definition, spend figures, and percentage were derived, including any exclusions or changes in method.
6Check the final disclosure against the source requirement and confirm that the figures and definitions match the evidence before publishing.
Request the data
Request the local-supplier spend data
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
What share of our procurement spend in the reporting period went to suppliers we treat as local for each significant operating site?
Use your organisation’s own terms first, then map them to the disclosure. For example, if you say ‘site’, ‘region’, ‘branch’, ‘plant’, ‘depot’ or ‘business unit’, use those labels in the request and only translate them into the reporting wording when you prepare the final disclosure pack. Keep the ask in the language your procurement team and systems already use.
Weak request
Please provide the GRI 204-1 data for local suppliers.
Why it fails: It uses framework language only, gives no clue which team should act, and leaves out the practical details needed to produce a usable extract. The owner would still have to guess the period, the site list, the spend basis, the local rule, and the source system.
Better request
Please pull the [reporting period] procurement extract for our [sites / business units] showing total spend and the amount spent with suppliers we treat as local. Include the local rule, the site list, the source system, the spend basis, and any exclusions so we can calculate the local-supplier share for the reporting pack.
Industry examples
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
State how you identified the important operating sites, how you decided what counts as nearby supply, and how you calculated the share of procurement spend for each site.
Context note
Explain what the figures indicate about how much of the procurement budget at key sites stays within the surrounding area, and what that suggests about local sourcing patterns.
Fluctuation statement
If the share changes materially from one period to the next, note whether this is linked to changes in the sites covered, the local-area definition, supplier mix, or purchasing volumes.
Content index entry
GRI 204-1 Proportion of spending on local suppliers — [location / page] / [notes]
Download Centre
Preparation tools & forms
Professional preparation tools for GRI 204-1 — free with an LRA Community membership. Register once (it's free) and every download unlocks, together with the Disclosure Library, templates and the LRA AI-assistant.
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Assurance readiness
For each claim, check the evidence
Evidence pack to prepare
Common reporting gaps
A percentage is stated without the underlying counts (numerator and denominator).The denominator — what the figure is a share of — is not explained.Partial scope is reported as if it were complete coverage.One-off activities are counted as if they were ongoing programmes.Boundary or period changes that move the figure are not flagged.Exclusions from the reported scope are not listed or explained.
Common gaps
Mistakes to avoid when collecting the data
Wrong owner
The request goes to the procurement team in framework language, but the people who actually hold the spend data, supplier master, or site list are never brought in.
No scope set
The team starts pulling figures before agreeing which operating sites count and which supplier spend lines sit inside the calculation.
Local not defined
Different sites use different ideas of what counts as local, so the same supplier can be treated one way in one place and another way elsewhere.
Wrong time basis
The spend period is taken from a different reporting cycle than the supplier and site records, so the numerator and denominator do not line up.
Mixed counting basis
Some teams use invoice value, others use budget or purchase order value, which makes the percentage impossible to compare across sites.
Source labels lost
The original file names, site codes, and supplier tags are stripped out during consolidation, so the calculation cannot be traced back to the source records.
Populations merged
Spend from sites that should be assessed separately is rolled together, hiding differences between locations and distorting the local-supplier share.
No evidence trail
The working papers do not keep the definition notes, extracts, or reviewer sign-off, so nobody can show how the figure was assembled.
Where judgement is often needed
Set the site list before calculating the share
Explain which operating sites you treated as in-scope, and if that list changed through a purchase, sale, opening or closure, say which version of the site list sits behind the figure.
Define what counts as local in each country or region
State the geographic rule you used for each operating area, especially where a single country-wide rule would not reflect how buying is organised on the ground.
Decide how to treat mixed-location suppliers
If a supplier serves more than one site or has multiple trading locations, explain whether you used the branch closest to the site, the supplier’s registered address, or another practical rule.
Choose the spending basis and keep it consistent
Make clear whether you used orders placed, invoices approved, or payments made, and use the same basis across the calculation so the percentage is comparable.
Explain any estimates used for hard-to-tag spend
Where purchase data cannot be cleanly split by site or supplier location, describe the estimate or allocation method used and note that it is an approximation.
Show how you handled group-wide or central buying
If head office or a shared buying team places orders for several sites, explain how you assigned that spend to the relevant operating location, or why it was left out.
State the cut-off date and treatment of late postings
Clarify the period covered and how you dealt with late supplier invoices, credit notes, or other timing differences that could move spend between periods.
Be explicit about rounding and small differences
Say how you rounded the percentage and whether minor differences arise from rounding, so readers can reconcile the published number to the underlying totals.
Protect supplier confidentiality through aggregation
If naming or separating local suppliers would expose commercially sensitive information, explain the level at which you aggregated the data and how that still supports the reported percentage.
Examples
Illustrative examples
Synthetic, written by LRA — not from a company report, not text from any standard.
Illustrative (synthetic) example — Food manufacturing
*Synthetic illustration only.* For our main production sites, we treat a location as local when the supplier is based within 100 km of that site. We define a significant operating location as any site that accounts for at least 10% of group procurement spend in the year; under that approach, our three qualifying sites together had a procurement budget of £120 million, of which £78 million was spent with local suppliers, or 65%. - This example is written in the first person and is purely illustrative. - The figures are internally consistent and rounded to whole percentages.
This example shows how a reporter can explain the boundary used for important sites, define what counts as local, and state the share of spend with nearby suppliers for those sites.
Illustrative (synthetic) example — Utilities
*Synthetic illustration only.* In our network operations business, we treat a site as significant if it represents at least 5% of annual external purchasing in the country where it sits. For those sites, we use a local-supplier test of the same country or within 50 km of the site, depending on which is more practical for the market. Across the four sites that met our threshold, the procurement budget was £200 million and £110 million went to suppliers meeting that local test, which is 55%. - This is a made-up example for training purposes. - The numbers are consistent and the percentage is calculated from the stated amounts.
This example demonstrates a different way to describe the site threshold, the local geography, and the resulting proportion of spend directed to suppliers that meet the local test.
Company reports
How companies report GRI 204-1
Real reports where this topic is disclosed. These are report practice, not exact disclosure templates to copy.
WNC Corporation
Technology Hardware and Equipment · Taiwan · 2024
WNC Corporation’s 2024 Sustainability Report provides a clear figure for local procurement at its headquarters, which stands at 45%, and notes that 195 RMAP-conforming smelters account for 99.0% of the total, indicating strong supplier compliance (p.44). The report also includes a water recycling rate calculation based on recycled water volumes, including cooling water, supported by rainfall statistics (p.75). However, while there is some narrative on recyclable waste definitions aligned with local regulations, no headline value or comprehensive data on waste generation is provided (p.78).
Snam S.p.A.
Gas Utilities · Italy · 2025
Snam S.p.A.'s 2025 Annual Report provides a percentage value for total spending on significant Tier 1 suppliers, reported as 78% and 64% on page 400. The report also includes narrative information on the geographical context, noting that 100% of the regulated business was included in the scope of analysis (p.314), and mentions that certain indicators, such as those related to competitive behaviour and environmental volumes, are not applicable to Snam (p.477). However, the report does not clearly address some other potential disclosure elements, such as detailed impacts on local communities or specific environmental incidents beyond noting no significant spills occurred (p.496).
Compal Electronics, Inc.
Technology Hardware and Equipment · Taiwan · 2025
Compal Electronics, Inc.'s 2025 ESG Report includes a covered datapoint on the proportion of spending on local suppliers, referenced on page 210. The report also discusses responsible supply chain management and supplier audits on pages 193 and 201, indicating some attention to procurement practices. However, there is no clear narrative or methodological explanation found in the report regarding procurement practices, as these elements are marked unclear or not found.
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Check your understanding
Scenarios to work through
A group has three major operating sites. For the year, the procurement team spent £10 million across those sites, and £3.4 million went to suppliers that the organisation treats as local to those sites. The team also has a written note explaining what counts as local and which sites are treated as significant.
QShould the disclosure show 34% and include both the local-area definition and the rule used to decide which sites are in scope?
Reveal model answer →Hide answer ↑Yes. The percentage is 3.4 million out of 10 million, which is 34%, and the narrative should explain both the geographic boundary used for local suppliers and the basis for deciding which operating sites are included.
Why this matters · Give the percentage together with clear explanations of both the local-supplier boundary and the in-scope site definition.
A preparer has the spend data for two large plants but not for a third warehouse that management considers minor. The warehouse is excluded from the calculation, yet the team has not documented why it was left out.
QCan the disclosure be completed without stating how the organisation decided that the warehouse was not a significant operating location?
Reveal model answer →Hide answer ↑No. If a site is left out, the basis for treating it as outside the relevant set of locations needs to be stated so readers can understand the scope of the figure.
Why this matters · If any site is excluded, explain the rule used to decide that it was not part of the relevant operating footprint.
The finance team can calculate total procurement spend for the year, but local-vs-non-local coding was only applied in one region. The remaining regions use different supplier records, so the team cannot yet produce a single organisation-wide percentage.
QShould the preparer publish a partial figure now, or wait until the same local-supplier basis can be applied across all significant sites?
Reveal model answer →Hide answer ↑Wait until the same approach can be applied consistently across the sites that are in scope. A partial figure based on only one region would not represent the full set of relevant operations.
Why this matters · Use one consistent method across all included sites before reporting the percentage.
An organisation defines local suppliers as those based within the same country as the operating site. For one site, however, the team has been using a 50-kilometre radius instead, and both methods produce different results.
QWhich local definition should be used in the disclosure, and what should happen if the method changed during the year?
Reveal model answer →Hide answer ↑The disclosure should use one clear geographic definition and apply it consistently to the reported period. If the method changed, the organisation should explain the basis used for the figure it is presenting rather than mixing two different local tests.
Why this matters · State one geographic rule for ‘local’ and keep it consistent for the reported period.
Framework references
Related framework references
How this disclosure maps across the major reporting frameworks.
Primary
Related & explore
FAQ
Questions this page answers
What do I need to prepare for GRI 204-1 Procurement Practices before I start collecting data?+−
The page says to start with three datapoints: local supplier spend share, your local area definition, and the operating location scope. It also has a step-by-step preparation section you can use to turn those inputs into a draft disclosure.
How do I define the local area for GRI 204-1 Procurement Practices in a way that is usable for reporting?+−
Use the page’s local area definition datapoint and make sure it is set clearly enough to support the spend calculation and the narrative. The page does not give a fixed definition, so you need to document the approach you used.
What operating location scope should I use for GRI 204-1 Procurement Practices?+−
The page asks you to set the operating location scope as one of the core datapoints. In practice, that means being explicit about which locations are included in the calculation and evidence pack.
What data do I need to calculate local supplier spend share for GRI 204-1 Procurement Practices?+−
You need the spend data that supports the local supplier spend share, plus the local area definition and the operating location scope. The page’s example disclosure and data table can help you see how the figures are presented.
How do I use the step-by-step 'how to prepare' section for GRI 204-1 Procurement Practices?+−
Use it as a working sequence to move from scope and definitions to data collection, then to a draft disclosure. The page is designed to help you prepare the disclosure, not just describe it.
What should go into the evidence pack for GRI 204-1 Procurement Practices?+−
The page includes an evidence pack with five items for assurance readiness. Use it to assemble the documents and records that support the claim, the calculation, and the scope you used.
What are the five assurance claims I need to verify for GRI 204-1 Procurement Practices?+−
The page says there are five assurance claims to verify, each framed around a claim, risk and evidence. Use those prompts to check that the disclosure is supported and that the evidence pack matches the reported figures.
What are the common reporting gaps or mistakes on GRI 204-1 Procurement Practices?+−
The page lists common reporting gaps and mistakes so you can spot issues before sign-off. It is useful for checking whether the scope, definitions, evidence and draft output are aligned.
How do I turn the GRI 204-1 Procurement Practices data into a draft disclosure?+−
The page has a draft-output section with visualisation ideas, narrative starters and a GRI content-index line. That gives you a starting point for writing the disclosure once the data and scope are settled.
How can the GRI 204-1 Procurement Practices workbook help me prepare for assurance?+−
The Download Centre includes a Prep & Assurance workbook in .xlsx format and a printable Library Card in .pdf. Use the workbook to organise the preparation steps and the evidence needed for assurance readiness.
More questions this page can help with
GRI 204-1 Procurement Practices checklist for local supplier spend share, local area definition and operating location scopeHow to build an evidence pack for GRI 204-1 Procurement Practices assurance readinessGRI 204-1 Procurement Practices common mistakes and reporting gaps to avoidHow to use the GRI 204-1 Procurement Practices workbook downloadGRI 204-1 Procurement Practices draft narrative starters and content-index lineSynthetic example disclosure for GRI 204-1 Procurement Practices data tableWhat does the plain-language explainer cover for GRI 204-1 Procurement PracticesHow to set methodology for GRI 204-1 Procurement Practices local area and scopeWho should own the data for GRI 204-1 Procurement Practices in a companyWhat assurance claims should be checked for GRI 204-1 Procurement PracticesWhere can I find real company report examples for GRI 204-1 Procurement PracticesIs there an ESRS or IFRS equivalent for GRI 204-1 Procurement Practices on this page
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