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The most widely known and used reporting framework is the Global Reporting Initiative reporting standards. Although not recognized as such, GRI is approaching adoption as a universal standard by dint of its popularity, and it one of the “big five” frameworks.
Revised Universal StandardsIn October 2021, GRI launched its revised Universal Standards, which aim to help companies factor in evolving disclosure needs, such as the European Union’s Corporate Sustainability Reporting Directive and the International Financial Reporting Standards enterprise value standards.
The aim of GRI, it says, is to assist others to take responsibility for their impacts, and to an extent those of their supply chain, by providing a common reporting language. It is popular with both public and private companies, municipalities, government agencies and NGOs, and it is the official reporting framework of the UN Global Compact. The GRI Standards are provided as a free public good.
The latest iteration of the framework is G.4, which is based on materiality and is modular in structure. It requires the reporting organization to select either the core reporting option, whereby they only disclose the most important issues, or comprehensive reporting, which includes all identified material issues.
The GRI Standards are constantly reviewed and updated and new standards added to the framework. The GRI encourages early adoption of the new standards by reporting organizations.
67% of the 5,200 leading companies across 52 countries use the GRI Standards for sustainability reporting, says KPMG.
GRI weights each ESG pillar equally and emphasizes stakeholder engagement to assess materiality. It does not score performance, as such, but instead focuses on transparency. The three pillars are presented as three sets of topic-specific standards that are broken down into aspects. Aspects are formed of requirements (mandatory instructions), recommendations (encouraged but not required) and guidance (context, explanations and examples).
Overview of GRI Standards
New topic standards came into effect as of January 1, 2021, for companies identifying any of these topics as material to their operations. The new topics include:
GRI 207: Tax 2019: GRI 207 enables companies to report country-by-country tax payments alongside their management approach to tax. The Standard supports transparency on the tax contribution of these companies.
GRI 303: Water and Effluents 2018: This standard presents a holistic perspective on the impact organizations have on water resources, focusing on how water is used, managed and discharged.
GRI 306: Waste 2020: On January 1, 2022, another standard will be going into effect to disclose a complete picture of the impacts of waste on companies’ processes, products and services, as well as throughout their value chains. It encourages organizations to prevent waste at source and to discover opportunities for circular business practices.
GRI 403: Occupational Health and Safety 2018: This Standard addresses reporting on occupational health and safety management and is particularly relevant as companies face new challenges presented by the COVID-19 pandemic.
At the same time, GRI also published an updated guide on linking the UN’s 17 Sustainable Development Goals with GRI, including tools on integrating the SDGs into reporting and examples of SDG reporting from around the world.
The initiative was founded in 1997 in Boston, Massachusetts, United States, by the Coalition of Environmentally Responsible Economies and joined two years later by the United Nations to encourage greater corporate transparency. It was then spun off into its own entity in 2002, relocated to Amsterdam, the Netherlands, and is now overseen by the Global Sustainability Standards Board, an independent operating entity of GRI, which sets the standards according to a multi-stakeholder and consensus-seeking approach.
A survey by corporate services firm KPMG found 67% of 5,200 leading companies across 52 countries now use the GRI Standards for sustainability reporting.
According to the 2020 version of the Carrots & Sticks report, there are more than 600 sustainability reporting instruments in 87 countries, 167 of which explicitly reference the GRI Standards, according to Reuten said. Most of these are issued by governments, followed by financial market regulators.
“GRI strongly believes in the vision of a single, global reporting standard and collaborates closely with other organizations to support this aim and reduce reporting burden on companies, while ensuring transparency” Thijs Reuten, the head of policy at GRI, told Lubes’n’Greases.
The consolidated set of GRI standards can be downloaded here.
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