The Global Reporting Initiative (GRI) is an international organization that develops sustainability reporting standards used by thousands of entities worldwide. Established as a non-profit in 1997, GRI enables organizations to disclose their economic, environmental and social impacts in a standardized way.
The GRI Standards are designed to be applicable to organizations of all types and sizes, from large multinational corporations to small enterprises. They are also relevant for other stakeholders like investors, policymakers, and civil society organizations. The Standards focus on reporting an organization's material impacts on the economy, environment, and people.
As of 2019, over 14,000 organizations across more than 100 countries were using the GRI Standards for sustainability reporting. The Standards are set by an independent body called the Global Sustainability Standards Board (GSSB). According to KPMG, the GRI framework is the most widely adopted for sustainability reporting internationally.
A key principle of GRI is that sustainability reporting should be accessible to any organization, regardless of size or sector. The modular structure of the Standards provides flexibility while ensuring consistent and comparable disclosures.
Organizations may choose to adopt GRI reporting for various reasons, including improving stakeholder communication, enhancing long-term strategy, and strengthening their reputation. The Standards help organizations understand and communicate their most significant sustainability impacts in a credible way.
GRI Universal Standards
Source: GRI
The GRI Universal Standards form the foundation of the GRI reporting framework and are applicable to all reporting organizations. These standards are identified by their green covers and single-digit numbering system. The Universal Standards consist of three key components:
GRI 1: Foundation 2021 (GRI 1) This standard introduces sustainability reporting using GRI Standards. It doesn't include specific reporting disclosures but instead defines critical concepts, clarifies basic reporting principles, and provides guidance on how to use the GRI Standards.
GRI 2: General Disclosures 2021 (GRI 2) This standard requires disclosures about the organization's reporting practices, governance, strategy, and policies. These disclosures provide context for understanding the organization's profile and sustainability impacts.
GRI 3: Material Topics 2021 (GRI 3) This standard guides organizations in determining their most significant impacts and related material topics. It also specifies disclosures about the processes used to determine and manage these material topics.
GRI Sector Standards
The GRI Sector Standards are distinguished by their two-digit numbering system and brown cover pages. These standards are designed for specific sectors, and organizations within sectors where a Sector Standard is available must use it to report in accordance with GRI Standards.
The primary goal of the Sector Standards is to enhance the quality and consistency of sustainability reporting across different industries. They assist organizations in identifying their most significant impacts and provide a list of likely material topics and relevant disclosures specific to their sector.
GRI plans to develop Sector Standards for 40 sectors, categorized into four priority groups. As of now, several Sector Standards have been released:
GRI 11: Oil and Gas Sector 2021
GRI 12: Coal Sector 2022
GRI 13: Agriculture, Aquaculture and Fishing Sectors 2022
GRI 14: Mining Sector 2024 (recently added)
GRI Topic Standards
The GRI Topic Standards are distinguished by their three-digit numbering system and purple cover pages. Each Topic Standard focuses on a specific sustainability topic, providing organizations with a framework to report on their material impacts in that area.
Organizations select relevant Topic Standards based on their identified material topics. These standards offer an overview of the topic and include a set of disclosures pertinent to that specific area, including information on how the organization manages the particular material topic.
Following the significant revision of the Universal Standards, the Topic Standards were adapted to ensure consistency across the GRI framework. This adaptation involved updating terminology, removing outdated references, and applying a new GRI Standards template.
Post-revision, there are now 31 Topic Standards, categorized into three main areas:
GRI 2xx Series: Covering Economic impacts
GRI 3xx Series: Addressing Environmental impacts
GRI 4xx Series: Focusing on Social impacts
Process to determine material topics
Organizations using the GRI Standards must identify their material topics, incorporating applicable GRI Sector Standards in the process. The recommended approach involves four steps:
Comprehend the context of the organization.
Identify both the actual and potential impacts.
Evaluate the significance of the impacts.
Prioritization of the most significant impacts for reporting, which determines the material topics.
This process should be reviewed each reporting period to account for changes in the organization's activities and relationships. The approach should be systematically documented, including decisions made, sources analyzed, and evidence gathered. This documentation aids in explaining the chosen approach and facilitates analysis and assurance.
The specific method for each step may vary based on the organization's circumstances, such as its business model, sectors, operating context, and nature of impacts. However, the process should be consistent, replicable, and documented across reporting periods.
Source: GRI 3
Step 1:
Organizations should create an overview of their activities, relationships, sustainability context, and stakeholders when identifying potential impacts. This process should consider:
Activities: Examine the organization's purpose, operations, products/services, sectors, employee demographics, and worker types.
Business relationships: Analyze types of partnerships, activities of business partners, nature of relationships, and their geographic locations.
Sustainability context: Consider economic, environmental, and social challenges related to the organization's sectors and locations, as well as relevant international instruments and regulations.
Stakeholder identification: Compile a comprehensive list of individuals and groups affected by the organization's activities, including those without direct relationships.
Stakeholder engagement: Involve stakeholders in the impact identification process.
This overview provides crucial information for identifying actual and potential impacts across the organization's controlled entities and interests. Relevant internal departments and sector-specific resources can assist in this process.
Step 2:
Assess the impacts on the economy, the environment, and people (including human rights), and consider both company activities and broader business relationships.
Categorize impacts as:
Actual vs. potential
Positive vs. negative
Short-term vs. long-term
Intended vs. unintended
Reversible vs. irreversible (for negative impacts)
Information gathering:
Use diverse sources: internal, third-party, and external
Reference industry standards and best practices
Engage stakeholders and consult experts
Assessment process:
Conduct ongoing assessments as contexts change
Prioritize significant negative impacts if resources are limited
Start with scoping exercises for complex operations
Step 3:
Prioritize identified impacts based on their significance:
Use both quantitative and qualitative analysis
Consider sector-specific factors
Consult stakeholders and experts
For negative impacts, assess:
Severity (scale, scope, and irremediable character)
Likelihood
Prioritize severe human rights impacts regardless of likelihood
For positive impacts, evaluate:
Scale
Scope
Likelihood
Step 4:
Prioritize impacts for reporting based on significance:
Set a threshold to determine material topics
Group impacts into related topics
Rank topics from most to least significant
Prioritize negative impacts separately from positive ones
Validation process:
Test material topics against industry standards
Consult potential information users and experts
Seek external assurance for the prioritization process
Obtain approval from highest governance body or senior executives
Key considerations:
Use significance as the sole criterion for materiality
Do not let reporting difficulty or lack of management influence selection
Provide transparency about the prioritization process
Recognize responsibility for addressing impacts even if not prioritized for reporting
Using the GRI Standards
The GRI Standards are designed as an interconnected system, comprising three main series. Within this framework, all disclosures contain specific requirements that organizations must adhere to when reporting in accordance with the Standards.
The structure of the Standards includes several key elements:
Requirements: These are mandatory elements presented in bold font and indicated by the word 'shall'. Organizations must comply with these to report in accordance with the GRI Standards.
Guidance: Often accompanying requirements, guidance provides additional context, explanations, and examples to help organizations understand and implement the requirements. However, compliance with guidance is not mandatory.
Recommendations: These are encouraged but not required actions, typically indicated by the word 'should'. The term 'can' is used to indicate possibilities or options.
Defined terms: Important terms are underlined in the text and their definitions can be found in the Glossary. Organizations are required to apply these definitions as provided.
This structure ensures that organizations have clear instructions on what is mandatory for compliance, while also providing flexibility and additional support through guidance and recommendations. The system is designed to be user-friendly, allowing organizations of various sizes and sectors to report on their sustainability impacts in a credible and comparable manner.
Reporting format
Organizations have flexibility in how they present their sustainability information when using the GRI Standards. The reported data can be made available through various formats, including electronic and paper-based mediums. Additionally, this information can be distributed across multiple locations or platforms.
Common formats and locations for sustainability reporting include:
Standalone sustainability reports
Dedicated web pages
Sections within annual reports
Integrated reports
It's important to note that in the context of the GRI Standards, the terms "report" and "reported information" are not limited to a single document or location. Instead, these terms encompass all sustainability-related information disclosed by the organization, regardless of where or how it is presented.
Reporting in accordance with the GRI Standards
The GRI Standards offer two primary approaches for organizations to utilize their framework: reporting "in accordance" with the Standards or reporting "with reference" to them. The recommended approach is to report "in accordance" with the GRI Standards.
To report in accordance with the GRI Standards, the company must comply with all nine requirements included in the section 3 of GRI 1: Foundation 2021.
There is no cost associated with notifying GRI of the use of the GRI Standards.
Reporting with reference to the GRI Standards
If the company cannot meet the requirements to report in accordance with the GRI Standards or only wants to report specific information it can use selected GRI Standards or parts of their content and report with reference to the GRI Standards. In this case, the company must comply with the following requirements which are specified at the end of section 3 in GRI 1: Foundation 2021.
Publish a GRI content index
Provide a statement of use
Notify GRI
It is expected that the company transitions to reporting in accordance with the GRI Standards in time.
Reasons for omissions
The GRI Standards allow for reasons of omission for most disclosures, with a few exceptions. When an organization cannot comply with a specific disclosure requirement, it can provide one of the permitted reasons for omission along with an explanation in the GRI content index.
Omissions are allowed for all disclosures from the GRI Standards, with the exception of the following disclosures which must always be provided.:
Disclosure 2-1 Organizational details
Disclosure 2-2 Entities included in the organization’s sustainability reporting
Disclosure 2-3 Reporting period, frequency and contact point
Disclosure 2-4 Restatements of information
Disclosure 2-5 External assurance
Disclosure 3-1 Process to determine material topics
Disclosure 3-2 List of material topics
Why should organizations report to the GRI?
Reporting using the GRI Standards offers numerous benefits for organizations, promoting sustainability and transparency. Key advantages include:
These benefits align with GRI's mission to increase corporate transparency and accountability regarding economic, environmental, and social impacts. By providing a comprehensive framework for sustainability reporting, GRI enables organizations to communicate their sustainability efforts effectively, meet stakeholder expectations, and contribute to sustainable development.
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