GRI Standards: The Basics of the Global Reporting Initiative

In today's world, businesses are under increasing pressure to demonstrate their impact on the environment and society. To address this, sustainability reporting has become a powerful tool for organizations to transparently communicate their environmental, social, and governance (ESG) performance. This type of reporting allows companies to showcase their commitment to sustainability and accountability to stakeholders. The Global Reporting Initiative (GRI) has become a beacon for companies seeking responsible and sustainable practices as stakeholders demand greater accountability.

GRI envisions a world where every business decision is a step towards a more sustainable future. GRI has reshaped the corporate landscape by setting the bar for sustainability reporting. In this article, we look at the GRI and its central role in driving the future of corporate sustainability.

What is the Global Reporting Initiative (GRI)?

The Global Reporting Initiative (GRI) is an independent, non-profit organization that has developed a comprehensive framework for sustainability reporting.

This involves disclosing an organization's economic, environmental, social, and governance (ESG) performance and impacts. GRI's framework is widely used and recognized globally. The 'GRI Standards' and the GRI framework provide organisations with templates and guidelines for reporting sustainability-related data in an open and consistent way.

GRI was established in 1997 by CERES and UNEP with the goal of promoting sustainable development and encouraging businesses, governments, and other organizations to measure and report on their sustainability performance. The framework it developed provides a structured way for organizations to assess their impacts on a wide range of issues, such as greenhouse gas emissions, labor practices, human rights, product responsibility, and more.

The GRI Standards

The GRI framework consists of reporting guidelines and indicators that organizations can use to report their sustainability performance. It helps organizations identify material issues relevant to their operations and stakeholder concerns, set targets and objectives, and measure progress over time. The GRI guidelines have gone through several iterations. The latest adoption of the GRI 2021 Version came into force on January 1, 2023.

Who Needs to Report According to GRI?

Any organization, regardless of size, industry or location, can use the GRI Standards for its sustainability reporting. The GRI standards are the most widely used standards in the field, currently used by over 15,000 organizations across more than 100 countries. They are particularly relevant when tracking and reporting on an organization's efforts to achieve net-zero emissions targets on its path to low carbon.

Certain nations have implemented laws or policies mandating or promoting companies to disclose their sustainability performance through established frameworks like the GRI Standards.

With the introduction of CSRD as a replacement for NFRD, EU companies are now required to comply with ESRS reporting standards. In order to increase interoperability within the reporting landscape, GRI and EFRAG (European Financial Reporting Advisory Group) have started to work together by aligning their standards. Details on how to use GRI for your ESRS reporting can be found here: Navigating the Interplay of GRI Standards and ESRS

Benefits of Using GRI for Your Reporting

Organizations can demonstrate their commitment to ethical business practices, transparency, and accountability by using sustainability reporting that follows the GRI guidelines. It also provides useful data for stakeholders — investors, customers, employees and the general public — to evaluate an organization's sustainability initiatives and results.

The GRI framework is sector agnostic. The report can be used either internally to make decisions, reconsider strategies, and analyze policies, or externally for stakeholders outside the organization to detect financial difficulties and evaluate performance.

Many businesses, big and small, actively switch to GRI reporting in order to improve their reputation as socially and ecologically conscious organizations and to increase the comparability through standardization.

In the current era, the GRI Standards offer a globally recognized set of guidelines that reflect the economic significance of structured ESG reporting.

‍

The Structure of GRI Standards

The GRI Universal Standards, GRI Sector Standards, and GRI Topic Standards form the modular framework known as the GRI Standards. With about 120 disclosure points, the GRI framework promotes standardization, which is necessary for effective reporting and quantifiable progress in sustainable management.

All organizations employ the three universal standards, but they select the sector and topic standards according to their business area and the results of their materiality analysis.

GRI Universal Standards

The foundation for each GRI reporting is provided by the Universal Standards. They address subjects including strategy, managerial method, and governance. Also, they include issues such as defining report content, identifying material topics, and establishing report boundaries.

• GRI 1: Foundation 2021 (GRI 1) defines the purpose and usage of the GRI Standards, outlines compliance requirements for organizations, and specifies key reporting principles such as accuracy and verifiability.
• GRI 2: General Disclosures 2021 (GRI 2) includes information on an organization's structure, activities, governance, and stakeholder engagement, providing valuable insights into its profile, scale, and impacts.
• GRI 3: Material Topics 2021 (GRI 3) guides organizations in determining and disclosing their material topics, including the use of Sector Standards, and provides details on managing each identified topic.

GRI Sector Standards

The goal of the GRI Sector Standards is to improve reporting across organizations in terms of quality, completeness, and consistency. They define material subjects for each sector and provide necessary disclosures.

The Sector Standards are currently being developed for 40 sectors, starting with high impact industries. The Oil and Gas Sector Standard was the first Sector Standard to be developed (effective for reporting in January 2023). Sector Standards for coal and for agriculture, aquaculture, and fishing followed and are now effective for reporting in January 2024. Sector standards for mining, financial services, and textiles and apparel are currently under development.

When reporting according to GRI Standards, organizations are obligated (“required”) to use the relevant Sector Standards, if they are available.

‍

Every Sector Standard gives an overview of the characteristics of the sector, identifies potential material topics, explains the major impacts, and links to relevant disclosures in Topic Standards. These standards are in line with stakeholder expectations for impact management in the industry and are derived from sector-specific evidence, international instruments, and expert input.

The GRI Sector Standards specify the reporting requirements. They elaborate on the Topical Standards and provide additional requirements for specific sectors, for example, indicating that some topical standards apply only to certain sectors or by providing additional sector recommendations.

GRI Topic Standards

The GRI Topic Standards include disclosures on a number of topics including climate change, human rights, corruption, waste, and occupational health and safety. For the reporting, organizations select the Topic Standards that correspond to the material topics.

The Topic Standards are organized into:

• GRI 200s: economic topics
• GRI 300s: environmental topics
• GRI 400s: social topics

Every Topic Standard has particular requirements on the management approach and topic-specific disclosures. Topic management disclosures examine how an organization handles a significant topic, its related impacts, and the reasonable expectations and interests of stakeholders.

For example, GRI 306: Waste 2020, is a topic standard classified as an environmental topic. It includes disclosures for organizations to report on their waste-related impacts and management strategies. It allows organizations to share information on waste prevention, waste management in their activities, and throughout their value chain, both upstream and downstream. Within this standard are a number of disclosures:

Topic management disclosures

• Disclosure 306-1: Waste generation and significant waste-related impacts
• Disclosure 306-2: Management of significant waste-related impacts

Topic disclosures

• Disclosure 306-3: Waste generated
• Disclosure 306-4: Waste diverted from disposal
• Disclosure 306-5:Waste directed to disposal

👉 It's important to note that the GRI Standards are regularly updated and revised to align with emerging sustainability issues and best practices. Organizations that choose to adopt the GRI Standards can use them as a comprehensive framework to report their ESG performance and contribute to transparency, accountability, and responsible business practices.

For the most up-to-date information on the GRI Standards and any changes that may have occurred, visit the official GRI website.

Key Characteristics of GRI

• Developed through a multi-stakeholder process that includes input from a wide range of organizations, including businesses, civil society groups, labor unions, and academic institutions
• Comprehensive framework covering a wide range of economic, environmental, and social topics
• Transparent information disclosure about organization's sustainability performance
• Fostering continual improvement of sustainability performance through setting & tracking goals as well as regular performance reporting
• Materiality focus as GRI Standards emphasize the relevance of sustainability issues to an organization’s operations and stakeholders

How to Report to GRI

If your organization decides to use GRI for your sustainability reporting, you can use the Reporting Process provided by the GRI as well as a supporting software such as Sunhat to achieve an accurate and consistent report.

GRI Reporting Process

The GRI Reporting Process outlines a systematic method for organizations to disclose their sustainability performance through the utilization of the GRI Standards. The process involves the following steps:

1) Preparation

Before organizations can start creating the reporting, they need to compile a stakeholder list, evaluate their concerns and expectations, and define the boundaries for the sustainability report. GR1 serves as the foundation, providing key concepts, principles, and the necessary requirements for reporting in adherence to the GRI Standards.

2) Identify and assess impacts

Sector Standards assist organizations in identifying impacts by describing sector characteristics; GRI 2 specifies detailed disclosures for reporting practices and governance, and GRI 3 guides the step-by-step process of identifying and assessing impacts and their significance.

3) Determine material topics

​​Organizations prioritize and select material topics (materiality assessment), facilitated by GRI 3's step-by-step guidance. The Sector Standards aid in testing material topics against sector-specific standards, obligating their use when available, though organizations must still consider their unique circumstances in selection. GRI 3's disclosures assist in documenting the process for reporting in accordance with the GRI Standards.

4) Reporting disclosures

Organizations collect relevant data for reporting, utilizing disclosures from Sector and Topic Standards, along with GRI 2 and GRI 3. Omissions are permitted with valid reasons, and alongside mandatory disclosures, recommendations and guidance enhance report quality and transparency.

5) Reporting in accordance with the GRI Standards

GRI recommends reporting in line with its standards, covering all material topics and related impacts for a comprehensive overview. However, if an organization cannot meet all GRI Standards requirements or opts for targeted reporting, it can use selected standards or parts, referencing the GRI Standards accordingly.

6) Navigating a report

Reports using the GRI Standards can be published in various formats and locations, with a required GRI content index enhancing traceability, credibility, and transparency. For instance, a lot of businesses integrate the GRI indices into their yearly sustainability report and then structure it appropriately.

The GRI index offers an overview of reported information, aiding stakeholders in navigation and specifying the GRI Standards used. It also indicates the location of disclosures related to material topics. The content index additionally communicates what the organization has not reported, including reasons for omission and explanations for unmet requirements. For organizations under Sector Standards, reference numbers uniquely identify disclosures, facilitating user assessment of included disclosures.

Software Support for the GRI Report

Consolidating GRI reporting becomes challenging when information is scattered across various business departments, and managing version control in spreadsheets can be cumbersome. 

ESG reporting software eliminates the need for locally managed data, establishing a centralized information source.

‍

This software can then generate the necessary outputs for precise GRI reporting.

With Sunhat, reporting in line with the GRI standards can be a piece of cake. You simply use the Sunhat GRI Module, which

• has all GRI data points and templates integrated
• collects all your data in a standardized and automated way using GRI-related indicators
• provides you with practical, GRI-compliant checklists to include all relevant aspects in your disclosures
• enables you to collaborate with your team members for better process optimisation
• ensures you can use your GRI data for other frameworks, sustainability requests or certifications
• allows you to download the report in the format you want and need (e.g. for your annual sustainability report)

Incorporating Sunhat's software solution into your sustainability management can improve efficiency, accuracy, and collaboration, ensuring that you are well-prepared for your next sustainability reporting.

👉 If you’re interested in using our Sunhat GRI Module for your next sustainability reporting, request a demo or contact us.