Choosing the right sustainability reporting framework for your company is a critical decision. While there are many others to choose from, the most widely used sustainability reporting standards are those set by the Global Reporting Initiative (GRI).
Prevailing since 1997, GRI is an international, multi-stakeholder, independent non-profit organization which promotes environmental and social sustainability. GRI generates free sustainability reporting guidelines to allow companies to report their economic, social as well as environmental performance.
GRI reporting allows companies to identify and report the full business impact of their activities holistically on issues related to sustainability and climate change. GRI is the independent standards organisation that helps companies and governments organisations to objectively list and communicate these business impacts.
For long term business success, GRI standards assist businesses in improving their sustainability reports.
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Structure of GRI Standards
The structure of GRI sustainability reporting standards is basically divided into two modules which are interrelated and can be used together.
- One set is the universal standards.
- Second set is the topic-specific standards.
Both of these standards provide guidance for sustainability reporting. Universal standards include management approach as well as general disclosures. Codes of this module apply to every business preparing a sustainability report.
Topic-specific standards include economic, environmental and social disclosures to report on material topics. These topics analyze the social and economic impacts of the business and also influence the decisions of the stakeholders. Also, the GRI standards clearly state what a company has to do to satisfy a certain standard and what is just a recommendation to make things even better.
This ensures that all the companies are preparing dedicated and authentic reports.
GRI is the most widely used sustainability reporting framework because of its obvious benefits. GRI reporting sustainability finds a common language to communicate with the stakeholders and organizations about the significant impacts on the environment and society. These standards not only enable businesses to take accountability for their actions but also help in creating transparency.
Moreover, sustainable reporting of a company should be a balance of both positive as well as negative impact to achieve the goal of sustainable development. GRI standards enhance comparability as they promote the usage of common indicators. They also urge businesses to evaluate their operations and strategies.
From internal control to external comparison, GRI’s framework helps organisations in identifying, gathering and then reporting the appropriate information in a transparent manner. Since the process and topics are updated and relevant all the time, GRI’s structure proves to be an extremely useful tool for preparing a sustainability report.
Relevance and Approach
While using the GRI standards, companies can make use of the standards that are material (or specific) to their line of business. This materiality principle depends on two things: the impact on the stakeholders which is the external impact and the impact on the business also known as internal impact.
In preparing the sustainability report, the company has to take all the factors into account to evaluate the positive as well as negative impact of its business operations on the economy and society.
Additionally, the GRI standards summary requires the report’s management to lay out all the factors clearly in an accessible manner. Further details like targets, commitments and other material topics should also be presented concisely in the report. Since this modular structure is uniform along both the dimensions of materiality, it helps in keeping a single management approach to cover several topics.
Moreover, in order to improve the reporting, organizations have to answer questions about using the GRI standards and indicators. Businesses can also use the GRI framework to measure their own performance, goals and encourage the employees to accomplish better results.
GRI Standards To Prepare A Sustainability Report
A sustainability report is based on reporting principles and stresses on material topics. Composing an ESG report with GRI standards delivers the big picture of that particular organisation’s material topics, its impacts along with the steps taken for the impacts.
Furthermore, businesses can use specific GRI standards summary or even a part of them to report particular information by referencing those guidelines. The framework offers some flexibility depending on the company, whether it uses all the guidelines or some of them.
The existence of performance indicators and the indicator protocols for each of them, provide compilation guidance to the companies. Technical protocols assist the report writers in setting report boundary. All of these interrelated elements help in creating a sustainable report.
Companies can also incorporate the GRI content index in their Sustainability Report to increase the usability of their report. The content index, as the name suggests, is an index of the contents presented in a user-friendly manner. It helps companies to provide a snapshot of the main points in their Sustainability Report.
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GRI Guidelines Series
Starting with the 100 series, it contains three universal standards:
GRI 101, GRI 102 and GRI 103. GRI 101 lays reporting principles, includes requirements to prepare a sustainable report with GRI guidelines and also explains how guidelines can be referenced. Whereas GRI 102 and 103 are for the general disclosure and management approach respectively.
Furthermore, the 200,300 and 400 series include topic-specific standards. This includes impacts which are associated with economic, environmental and social topics. The latest guidelines under the 400 series includes employment, non-discrimination, human rights assessment, training and education and others.
GRI standards are created by keeping in mind the international labour practices along with environmental impacts. Also, GRI sustainability reporting framework sets these guidelines after conducting multiple surveys. While these standards provide a standardized approach, following the guidelines of GRI may be difficult for small businesses.
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Benefits of Using GRI standards
It is obvious that GRI standards offer disclosure of information that impacts the environment and other factors. Main benefits of following the GRI standards are:
- GRI standards are widely used standards that have evolved over the years.
- These have been extensively used by companies, government agencies and non-profit organizations across the world.
- The standards offer a universally accepted methodology to report a company’s sustainable business practices.
- The clear and modular approach allows comparability of the company’s performance against industry peers.
- The framework enables companies to set their goals along their unique materiality principle.
- It improves sustainability performance, risk management, investor communications and engagement with stakeholders.
- GRI sustainability reporting standards enable businesses to better engage all their stakeholders.
- They help companies to motivate the employees to improve your sustainability strategies along with your targets and goals.
Sustainable businesses are the need if the hour. Create a sustainable report to use greener business strategies for the greater good. If you are looking to create a Sustainability Report using the GRI sustainability reporting standards, get it touch with us here.
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