11.1 Global Reporting Initiative (GRI) standards

The Global Reporting Initiative (GRI) standards provide a framework for organizations to disclose their economic, environmental, and social impacts. These standards help companies align their sustainability strategies with global best practices and communicate performance to stakeholders.

GRI reporting is built on key principles like stakeholder inclusiveness, sustainability context, materiality, and completeness. The standards include universal guidelines for all organizations and topic-specific standards for economic, environmental, and social impacts.

Overview of GRI standards

• GRI standards provide a global framework for sustainability reporting, enabling organizations to disclose their economic, environmental, and social impacts
• The standards are developed through a multi-stakeholder process and are designed to be applicable to organizations of all sizes and sectors
• GRI reporting helps organizations align their sustainability strategies with international best practices and communicate their performance to stakeholders

Key principles of GRI reporting

Stakeholder inclusiveness principle

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• Organizations should identify and engage with their stakeholders to understand their expectations and concerns
• Stakeholder engagement helps organizations prioritize sustainability topics and ensure their reporting is relevant and responsive
• Engagement methods may include surveys, focus groups, and ongoing dialogue with stakeholders (investors, employees, customers, communities)

Sustainability context principle

• Organizations should present their sustainability performance in the broader context of sustainable development
• Reporting should consider the organization's impacts on local, regional, and global sustainability issues (climate change, biodiversity loss, social inequality)
• Contextual information helps stakeholders understand the significance of the organization's contributions to sustainable development

Materiality principle

• Organizations should focus their reporting on the sustainability topics that are most significant to their business and stakeholders
• Material topics are those that reflect the organization's significant economic, environmental, and social impacts or substantively influence stakeholders' decisions
• Materiality assessment involves identifying, prioritizing, and validating material topics through stakeholder engagement and analysis of internal and external factors

Completeness principle

• Sustainability reporting should provide a complete and balanced picture of the organization's impacts, both positive and negative
• Reporting should cover all material topics and include sufficient information for stakeholders to assess the organization's performance
• Completeness requires reporting on the organization's activities, products, services, and relationships across its value chain (suppliers, customers, communities)

GRI universal standards

GRI 1: Foundation

• GRI 1 sets out the reporting principles and requirements for using the GRI standards
• It provides guidance on how to apply the principles of stakeholder inclusiveness, sustainability context, materiality, and completeness
• GRI 1 also outlines the process for determining material topics and preparing a sustainability report in accordance with the standards

GRI 2: General disclosures

• GRI 2 specifies the disclosures that organizations should provide about their reporting practices, activities, governance, and stakeholder engagement
• General disclosures include information on the organization's profile, strategy, ethics and integrity, governance, and stakeholder engagement practices
• Examples of general disclosures: organizational structure, list of stakeholder groups engaged, approach to stakeholder engagement

GRI 3: Material topics

• GRI 3 guides organizations in determining their material topics and reporting on their management approach and performance for each topic
• The standard requires organizations to explain how they have identified and prioritized material topics, and how they manage their impacts related to these topics
• For each material topic, organizations should report on their policies, commitments, actions, and performance indicators

GRI topic standards

Economic topic standards

• The economic series (GRI 200) covers topics related to the organization's economic performance and impacts
• Topics include economic performance, market presence, indirect economic impacts, procurement practices, and anti-corruption
• Example disclosures: direct economic value generated and distributed, proportion of senior management hired from the local community

Environmental topic standards

• The environmental series (GRI 300) addresses the organization's impacts on the environment and its management of environmental topics
• Topics include materials, energy, water and effluents, biodiversity, emissions, waste, and environmental compliance
• Example disclosures: energy consumption within the organization, water discharge by quality and destination, significant impacts of activities, products, and services on biodiversity

Social topic standards

• The social series (GRI 400) covers the organization's impacts on social systems and its management of social topics
• Topics include employment, labor/management relations, occupational health and safety, training and education, diversity and equal opportunity, non-discrimination, freedom of association and collective bargaining, child labor, forced or compulsory labor, security practices, rights of indigenous peoples, human rights assessment, local communities, supplier social assessment, public policy, customer health and safety, marketing and labeling, customer privacy, and socioeconomic compliance
• Example disclosures: benefits provided to full-time employees, programs for upgrading employee skills, incidents of discrimination and corrective actions taken

Benefits of GRI reporting

Improved stakeholder engagement

• GRI reporting provides a structured framework for engaging with stakeholders and understanding their expectations and concerns
• Regular sustainability reporting builds trust and credibility with stakeholders by demonstrating the organization's commitment to transparency and accountability
• Stakeholder engagement through GRI reporting can lead to more collaborative relationships and partnerships to address sustainability challenges

Enhanced risk management

• GRI reporting helps organizations identify and assess their sustainability risks and opportunities across economic, environmental, and social dimensions
• By monitoring and reporting on material topics, organizations can proactively manage risks and adapt their strategies to changing circumstances
• Sustainability risk management can help organizations avoid reputational damage, legal liabilities, and financial losses associated with unsustainable practices

Increased transparency and accountability

• GRI reporting provides a comprehensive and standardized framework for disclosing sustainability performance to stakeholders
• Transparency about the organization's impacts, challenges, and progress helps build stakeholder confidence and trust
• Public sustainability reporting holds organizations accountable for their commitments and actions, and enables stakeholders to make informed decisions

Challenges in implementing GRI standards

Data collection and verification

• Gathering reliable and consistent data across the organization's operations and value chain can be challenging, especially for large and complex organizations
• Ensuring data quality and accuracy requires robust internal control systems and verification processes
• Organizations may need to invest in new data management systems, train employees on data collection procedures, and engage third-party assurance providers to validate their sustainability data

Materiality assessment process

• Conducting a thorough and inclusive materiality assessment can be time-consuming and resource-intensive
• Organizations may struggle to prioritize material topics and balance the interests of different stakeholder groups
• Materiality assessments need to be regularly reviewed and updated to reflect changing stakeholder expectations and sustainability contexts

Integration with financial reporting

• Integrating sustainability reporting with financial reporting can be challenging due to differences in scope, timeframes, and metrics
• Organizations may need to develop new processes and systems to align their sustainability and financial data and narratives
• Integrated reporting requires collaboration across different functions (finance, sustainability, communications) and support from senior leadership

GRI vs other sustainability frameworks

GRI vs SASB standards

• The Sustainability Accounting Standards Board (SASB) standards focus on industry-specific, financially material sustainability topics
• SASB standards are designed to help companies disclose sustainability information in their mandatory filings to the US Securities and Exchange Commission (SEC)
• GRI standards cover a broader range of sustainability topics and are designed for voluntary reporting to a wide range of stakeholders

GRI vs Integrated Reporting Framework

• The International Integrated Reporting Framework, developed by the International Integrated Reporting Council (IIRC), provides guidance on integrating financial and non-financial information in a single report
• Integrated reporting focuses on how an organization creates value over time, considering six capitals (financial, manufactured, intellectual, human, social and relationship, and natural)
• GRI standards can be used in conjunction with the Integrated Reporting Framework to provide more detailed sustainability disclosures

GRI vs UN Global Compact principles

• The United Nations Global Compact is a voluntary initiative based on CEO commitments to implement universal sustainability principles and take steps to support UN goals
• The Ten Principles of the UN Global Compact cover human rights, labor, environment, and anti-corruption
• GRI standards provide a reporting framework to help organizations communicate their progress in implementing the UN Global Compact principles

Future developments in GRI standards

Sector-specific standards

• GRI is developing sector-specific standards to address the unique sustainability challenges and opportunities faced by different industries
• Sector standards will provide more relevant and comparable disclosures for stakeholders interested in industry-specific sustainability performance
• Examples of sectors covered include oil and gas, coal, agriculture, and mining

Alignment with SDGs and other initiatives

• GRI is working to align its standards with the United Nations Sustainable Development Goals (SDGs) and other global sustainability initiatives
• Alignment helps organizations demonstrate how their sustainability strategies and actions contribute to achieving global goals
• GRI has published SDG mapping tools and guidance to help organizations link their disclosures to specific SDG targets and indicators

Emphasis on impact measurement and reporting

• GRI is placing greater emphasis on impact measurement and reporting, beyond traditional output and outcome measures
• Impact reporting focuses on the long-term, systemic changes that organizations contribute to, both positive and negative
• GRI is developing guidance and tools to help organizations assess and report on their sustainability impacts, in line with emerging best practices and stakeholder expectations