GRI Standards - A closer look!
Updated: Sep 25, 2022
Standing out within the"Alphabet soup of ESG reporting", GRI Standards is the world's most used standards for sustainability or ESG reports.
This article will primarily focus on what is GRI Standards and How to report with GRI Standards.
Global Reporting Initiatives Organization
GRI (Global Reporting Initiative) is an independent, international organization with the mission to help businesses and other organizations take account of their impacts. GRI organization has headquarters in the Netherlands and a wide network all over the world, plays a significant role in providing the universal language to communicate or compare the impacts of businesses and organizations, which is known as GRI Standards.
What are the GRI Standards?
GRI Standards are a set of interconnected standards and principles that enables organizations to understand and report publicly on their most significant impacts on the economic, environmental and social aspects, laying the foundation for sustainable development.
There is no restriction on which kinds of organizations can use GRI Standards. Any organization, regardless of large or small scale, private or public, is encouraged to apply GRI Standards to produce a relevant, comparable, and transparent report to their stakeholders - including investors, policymakers, capital markets, and civil society.
What is the GRI Standards system?
GRI Standards were designed as a system consisting of 3 levels: The Universal standards, The Sector standards, and the Topic standards.
The Universal standards include GRI 1 - requirement and principles; GRI 2 - Organizations' information disclosures and GRI 3 - Material topics disclosures. All these three typical green color-cover standards are applied to all organizations.
The Sector standards include a brief description and material topics for a specific sector. Sector standards are in the gray color cover. Currently, GRI has released 3 Sector standards: Oil & Gas sector 2021, Coal sector 2022, Agriculture Aquaculture and Fishing sector 2022.
The Topic standards include 32 topics covering all the material matters in the economic, environmental, social, and human rights. These standards are on the purple color cover.
The GRI Standards principles
What are the options to report with GRI Standards?
Organizations that want to use GRI standards to report their ESG performance can either report in accordance or in reference to the standards.
Requirement when reporting in accordance with GRI Standards
Requirement 1: Apply the reporting principles
Requirement 2: Report the disclosures in GRI 2: General Disclosure 2021
Requirement 3: Determine the material topic
Requirement 4: Report the disclosure in GRI 3: Material topic 2021
Requirement 5: Report disclosures from the GRI Topic Standards for each material topic
Requirement 6: Provide reasons for omission of disclosures and requirements that the organization can not comply with
Requirement 7: Publish a GRI content index
Requirement 8: Provide a statement of use
Requirement 9: Notify GRI
In case the organization can not fulfill all the above requirements or prefer to report on only some specific topic standards, the organization can report in reference to GRI Standards. However, the following requirements are a must.
Publish a GRI context index
Provide a statement of use
So what does it mean to say "reasons for omissions" when reporting in accordance with GRI Standards?
It means when the organization can not abide by the disclosure requirement, the organization is expected to provide a reason and a brief explanation. The reasons could be either of the following ones.
Reason for omission
Explain why it is not applicable
Describe the specific legal term
Describe the specific constraints
Information unavailable or incomplete
Describe specific information that is unavailable or incomplete. Explain the reason why and describe the action being taken and the expected time that the specified information will be available or complete.
However, in any case, the organization report in accordance with GRI Standards is not allowed to omit:
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.
So to sum up, hereunder is the step-by-step guide on how to report with GRI Standards.