The Global Reporting Initiative (GRI) was founded in 1997, with a long track record of success. Originally, it was envisioned as the first ‘universal environmental reporting framework,’ in response to the lack of accountability in the Exxon Valdez oil spill eight years prior. It was soon broadened to also include social, economic and governance issues, providing the world’s first, and most widely used, global framework for sustainability reporting.
GRI is an independent, international standards organisation, equipping companies with a comprehensive framework and guidance to better understand and communicate their impacts on environmental, social and governance (ESG) issues. Since its conception, GRI has prided itself on adopting a multi-stakeholder approach. Its governance bodies include representatives from the private and public sectors, labour organisations and other experts, thus ensuring that the Standards are refined with universal adoption in mind. This has been met with success, as it is currently used by more than 10,000 organisations in over 100 countries, including 78% of the world’s biggest 200 companies (by revenue).
In 2021, a significant revision of the Universal Standards took place, strengthening the framework and making the organisation the only reporting standard to reflect due diligence expectations for sustainability impacts, aligned with intergovernmental ESG instruments.
Consisting of three Standards, the framework is designed to be comprehensive yet flexible, usable by all sectors of any size:
Universal Standards: Apply to all organisations which adopt GRI, covering items such as organisation's governance, strategy, and material topics.
Topic Standards: Provide specific, comprehensive guidance for reporting on single sustainability topics, including Occupational Health and Safety, Waste and Anti-corruption.
Sector Standards: Gives sector-specific guidance for reporting on sustainability topics (currently under development).
The GRI reporting process includes:
Identifying material topics: These topics most significantly impact the organisation's sustainability performance. Various methods can be used to identify their material topics, such as stakeholder engagement and materiality assessments.
Collecting and disclosing information: After identifying their material topics, organisations must share data (both positive and negative) on their performance in those topics.
Compiling the GRI Content Index: The index is a tool that helps organisations demonstrate that all required information has been reported in accordance with the Standards.
It is also recommended that companies report “in accordance with” GRI Standards. This requires the firm to provide an in-depth report on all its material topics and related impacts, as well as its management of the topics. However, a more accessible choice is to report “with reference to” GRI, which allows firms to choose specific GRI Standards to disclose. This is often used when the organisation only wants to disclose select information for specific purposes, such as when complying with regulatory requirements.
In contrast with GRI, other reporting standards may be too focused on specific sustainability issues, or their indexes may suffer from lack of detail. For example, the Sustainability Accounting Standards Board (SASB) Standards helps investors understand industry-specific risks and opportunities, while the United Nations Sustainable Development Goals (SDGs)’s framework-based approach lacks specific reporting guidance.
The GRI Standards provide organisations with consistent guidance on identifying and reporting on their most critical ESG impacts, making it simpler to compare between the efforts of different organisations, or assess changes in a firm’s performance over time. Moreover, GRI has a wide range of resources and tools to help educate more people about sustainability reporting methods.
Due to its broad scope, however, adopting GRI Standards can be complex and time-consuming, particularly for small firms. It is also difficult to verify the reliability and accuracy of data provided by companies. Organisations may also have different interpretations and implementation of the guidelines, hence GRI has also been criticised for lack of standardisation.
Despite GRI’s comprehensiveness and global adoption, no one reporting framework can offer an all-inclusive overview of sustainability metrics, which is why firms often adopt more than one framework in their sustainability report. Nevertheless, organisations should adopt the multi-stakeholder approach to assess their needs and identify their sustainability goals.
Author: Sarah Lim
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