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What are the Global Reporting Initiative (GRI) Standards?

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What are the Global Reporting Initiative (GRI) Standards?

The Global Reporting Initiative (GRI) Standards have emerged as the gold standard in sustainability reporting, offering a robust framework for organizations to measure, manage, and communicate their economic, environmental, and social impacts. GRI Standards have gained a lot of importance in the past years, since they provide a universal language that allows companies to benchmark their efforts and progress in terms of sustainability, and to easily and clearly communicate it to internal and external stakeholders.

But what are the GRI Standards, and how do they work?

GRI Standards: a definition

Founded in Boston in 1997, the Global Reporting Initiative is an independent, international and non-profit organization created to pioneer sustainability reporting, and GRI Standards are the pillars the Initiative set in order to do so. To quote the definition provided by the Global Reporting Initiative itself “the GRI Standards are a modular system of interconnected standards which allow organizations to publicly report the impacts of their activities in a structured way that is transparent to stakeholders and other interested parties1” .

In short, GRI Standards are a comprehensive set of guidelines for organizations to report on their sustainability performance. These parameters enable organizations - large or small, public or private, from any sector - to more easily and effectively measure their impact on the environment and to report it in a transparent manner. And they work, since they appear to be the most widely used and trusted framework for reporting on sustainability practices worldwide.

 

1www.globalreporting.org

How do GRI Standards work?

The GRI standards are structured into three different sections:

  • GRI Universal Standards
  • GRI Sector Standards
  • GRI Topic Standards

 

GRI Universal Standards

GRI Universal Standards, which have just been updated in 2023, are the ones that apply to every organization, and consist of:

  • Foundation, which describes the purpose of the Standards and how to apply them;
  • General Disclosures, which contains information about an organization’s structure and reporting habits;
  • Material Topics, which explains the process through which an organization can identify the topics most relevant to its impacts.

 

GRI Sector Standards

Sector Standards are a set of supplementary standards that are specific to certain industry sectors. These standards have been created in order to allow the different sectors to address the unique sustainability issues and challenges they face, and to report on their sustainability performance in a more tailored and sector-specific way. By using GRI Sector Standards, organizations can thus ensure that their sustainability reporting is aligned with industry-specific expectations and best practices.

 

GRI Topic Standards

Finally, Topic Standards are a set of standards that focus on specific sustainability topics or issues. These standards allow organizations to focus and report on areas of sustainability that are particularly relevant to their operations and stakeholders. These standards cover a wide range of issues, from greenhouse gas emissions and biodiversity to human rights and labor practices, along with and many others. By using GRI Topic Standards, organizations can provide more detailed and specific information on the sustainability topics that are most significant to them, allowing for greater flexibility and customization in sustainability reporting.

The benefits of GRI Standards

The importance of GRI Standards appears quite obvious, at this point: the pivotal role they play in guiding organizations towards a transparent and responsible sustainability reporting is crucial in an era where sustainability has become a key driver of business success and societal well-being.

While the benefits for society and the environment are evident, GRI Standards also bring benefits to the organization: through transparent and standardized reporting, organizations are in fact better able to measure, manage and understand their impacts, and hence to identify strategic opportunities for their business and make informed decisions. Sustainability reporting can in fact help organizations to identify and mitigate risks related to environmental, social, and governance factors, reducing the potential for negative impacts on business operations. Moreover, transparency also helps build trust among stakeholders, including investors, employees and customers, and also to enhance the organization’s credibility and reputation.

Why are GRI Standards important?

GRI standards provide a structured framework that not only enhances transparency but also drives positive change within organizations. By adopting GRI Standards, businesses can improve their competitiveness, reduce risks, and make meaningful contributions to a more sustainable world. It is thus clear that GRI Standards are not just a reporting tool, but a catalyst for responsible and ethical business practices.

GRI and ESRS: the interoperability between the two standards

Officially adopted by the European Commission on July 31, 2023, the European Sustainability Reporting Standards (ESRS) represent an important step forward when it comes to sustainability reporting among companies.

By introducing these new standards on non-financial reporting, the European Union calls for businesses in member states to demonstrate greater commitment in assessing the risks and impacts of their operations, providing comparable and reliable information on sustainability.

On the 4th of September, 2023, the European Financial Reporting Advisory Group (EFRAG) and GRI signed a joined statement asserting the strong interoperability between the new ESRS Standards and GRI Standards, thus stating that companies that are currently reporting under the GRI standards will be now well prepared to report under the ESRS ones.

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