GRI Standards – Sustainability Reporting for All

Global Reporting Initiative – The Organisation

Initially formed by non-profit organisations with the support of the United Nations Environment Programme (UNEP) in 1997, the Global Reporting Initiative (GRI) is currently headquartered in Amsterdam, Netherlands.

The GRI is an independent, non-profit organisation that has multiple branches across the world including in the USA, South Africa, India, Brazil, China and Colombia. As mentioned, although the GRI is independent, the organisation has a long-standing partnership with the UNEP and the United Nations Global Compact (UNGC).

The GRI released a draft of sustainability guidelines in 1999 with the first full version being released in 2000. GRI is essentially a vast network comprising thousands of individuals from across the globe, which is supported by a Board of Directors, Stakeholder Council, Technical Advisory Committee, Organizational Stakeholders and the Secretariat. The organisation has a Chief Executive Officer, Chief Financial Officer and the main governance structure is built around the Secretariat (based in the headquarters in Amsterdam) which is elected in the annual general meeting.

In addition, the GRI also has multiple data partners that help collate and process information and data on Sustainability reporting and GRI Reporting, in particular. These data partners collect information on trends from various countries around the world and share data on reports and reporting organizations with the GRI.

GRI works with businesses, investors, policymakers, civil society and associated organizations, labor organizations, consultants, and assurance providers to develop the “GRI Standards” and help promote their use by Companies. The GRI Standards are currently being used by thousands of companies, NGOs, and organizations in over 100 countries around the world is the most widely used standard for sustainability reporting.

GRI Standards – Evolution of Sustainability Reporting

To get an idea of the scale at which the GRI Standards are used around the world, here’s some data:

  • 75% of the largest 250 companies in the world use GRI for their sustainability reporting needs
  • 63% of the largest 100 companies in 49 countries use GRI for sustainability reports

So what are GRI and its Standards?

The GRI Standards help organizations understand and communicate their impact (positive and negative) on global issues such as climate change, corruption, human rights, etc. The standards are designed so that they can be used by any organization whether small or large, private or public and regardless of the sector, they function in. As the most widely used international standards for sustainability reporting, the GRI Standards provide a common framework that organizations can use to disclose their economic, environmental, and social impacts and performance.

The collaborative, consensus-based process used to develop the GRI standards has ensured that it is constantly evolving to stay up-to-date with the latest thinking on sustainability reporting. For example, the most 2016 update of the Standards involved a 2-year revision process with inputs from more than 1000 experts from around the world. Additionally, a 2021 update ensures the standards were available in English, Japanese, Portuguese, Chinese, and Spanish. Currently, the standards are available in 26 languages.

The goal of the GRI Standards is to enhance global comparability and improve the quality of information/disclosures on an organization’s impacts. This ensures greater transparency and accountability of organizations.

Additionally, balanced reporting based on the GRI standards can have an impact on a Company’s ability to attract new investors and partners. The information disclosed via sustainability reports that are aligned with the GRI standards can help internal and external stakeholders of an organization to form opinions and thereby make informed decisions about the Company’s contribution to sustainable development goals.

Using GRI Standards

The GRI Standards are essentially 3 interrelated standards which are:

  • Universal Standards
  • Sector Standards
  • Topic Standards

These 3 standards have been developed with the intention of being used together so that an organization can prepare a sustainability report which is based on the reporting principles and focuses on material topics. Using the GRI standards appropriately, therefore, will help enhance the quality of the disclosures in the report and result in it being balanced while providing readers with a complete picture of the organization’s impacts (positive or negative).

The Universal standards are split into 3, which comprise the 100 series that are GRI 101: Foundation, GRI 102: General Disclosures, and GRI 103: Management Approach.

GRI 101 is the starting point for organizations using GRI Standards for sustainability reporting and this sets out the reporting principles that define the content of the report and its quality. The Foundation is about the basic requirements for the preparation of a sustainability report, in accordance with the GRI Standards and how they can be used and referenced.

GRI 102: General Disclosures help to showcase the context including general information, such as Company Profile, strategy, values, governance, stakeholder engagement, and reporting practices.

GRI 103: Management Approach – is focused on the Company’s management of material topics. This standard covers each material topic of the organization including the topic-specific ones covered in series 200,300, and 400. Further, the GRI 103 presents reporting organizations with the opportunity to give a narrative explanation of why a particular topic is important, and the impacts and mitigation activities taken by the Company.

The Topic Specific Standards, as mentioned previously have 3 sections that are used to report an organization’s impacts related to economic, environmental, and social topics such as Indirect economic impacts, water, or employment. Once an organization has done a materiality assessment and is aware of the topics material to it, they can then use these topics to determine which topic-specific standards to use to prepare a sustainability report. For example sections 302 – 4 would relate to the reduction of energy consumption and would go on to provide the reporting requirements, additional requirements (if any), reporting recommendations, and guidance specific to this topic.

Sector Specific Standards of GRI, as the name suggests, are focused on industries such as Oil and Gas, Coal, Agriculture, Aquaculture and Fishing, and many more. In total, the number of sectors covered (or being developed) will eventually be around 40. Companies that belong to a sector will share common activities that impact the economy, environment, and society. Therefore, these standards will allow for increased transparency and accountability for material issues within a specific sector. Stakeholders would also find it easier to compare with peer companies within a sector.

How Do Companies Use and Perceive GRI Standards?

One of the advantages of the GRI standards is their flexibility. The customizable method means that companies may follow one set of standards or another, while some may choose to be fully compliant with the standards by using all three (Universal, Sector, and Topic). If a Company’s sustainability report is fully aligned with the standards, they may submit the report to GRI for acknowledgment. Further, organizations are able to use a combination of international frameworks and standards along with GRI while developing and creating their corporate reports. These may include standards such as TCFD, CDP, <IR> Framework, SASB, etc.

Finally, considering that the GRI Standards can be used by companies of any size, belonging to any industry and located anywhere – there may be situations where a company has not fully implemented an ESG program internally. In those cases, these companies may choose to prepare a partial report. For example, say an organization is looking to report its social impacts but has limited to no data on environmental impacts, this Company may then choose to report with the Universal Standards and the social topic-specific standards, while opting out of the economic and environmental standards.

In conclusion, the GRI standards provide 5 major benefits to organizations and act as motivating factors for companies to adopt the standards while creating their sustainability reports:

  • GRI is a globally trusted standard and therefore makes it easier to standardize, assess and compare ESG data
  • GRI Standards allow for materiality and investor alignment
  • GRI Standards have been shown to improve the quality of ESG data collected by a company that has used it for sustainability reporting
  • GRI Standards are flexible and therefore can be updated without overhauling the entire reporting system. For example, the GSSB may choose to update a particular topic-specific standard to integrate emerging ESG trends (such as circular economy or tax transparency) without having to update other sections.
  • GRI Standards-based sustainability reporting helps companies enhance their stakeholder engagements. Specifically, GRI mentions 5 steps to ensure stakeholder inclusiveness and engagement:
    • Benchmarking and gap analysis – To track what your organization’s peers are doing and follow best practices
    • Identify and prioritize stakeholder groups – Start by listing all internal and external stakeholders before prioritizing them based on evidence to measure the influence each group has on your business
    • Stakeholder engagement plans – The plan should detail what your organization wants to learn from various stakeholder groups and the channels of communication you plan to use to get that information.
    • Engaging Stakeholders - Be sure to assess your stakeholder engagement plans and aligning with GRI may result in adding activities to further enhance engagement with various stakeholder groups
    • Information collation and analytics – Stakeholder engagement will ensure that your organization is able to collect and identify the key material topics that are causes for concern to various groups. The GRI standards will help you prioritize these so that the most important topics are shared with leadership, the public, and other stakeholder groups.