GRI Standards
Supervised by the Global Sustainability Standards Board (GSSB), the Global Reporting Initiative (GRI) Standards provide the most widely used sustainability reporting structure in the world, helping organisations - both ‘large and small, private or public’ - monitor their contributions to sustainable development. The Standards assess organisations’ social, economic and environmental impacts in a ‘comparable and credible way,’ and, in so doing, help construct ‘a sustainable future enabled by transparency and open dialogues about impact’. The Standards themselves now disclose a cohesive three part ‘modular system,’ ( the GRI Universal, Sector, and Topic Standards framework), infused with recommendations, requirements, disclosures and guidance to further sustainability reporting methods. This structure effectively facilitates a far-reaching reporting structure guided by over 25 years of experience and learning within the GRI.
Effective from January 2023, the updated GRI Standards seek to reflect the evolution of ‘emerging regulatory disclosure needs’ and regulations (the EU’s Corporate Sustainability Reporting Directive, to name but one), as well as maintain the ‘quality and consistency of sustainability reporting’ for organisations using the GRI Standards. Accordingly, the GRI has undertaken a comprehensive revision of its Universal Standards structure, implementing a novel modular system through which organisations may establish three fundamental, indiscriminate frameworks upon which to base their sustainability reporting. GRI 1: Foundation now explicates the ‘requirements and principles’ for using the Standards generally, articulating key concepts, purpose, system, and reporting processes, materialising substantive application faculties for organisations seeking to evaluate their contributions to sustainable development. GRI 2: General Disclosures proceeds to outline and structure organisational transparency - a mainstay of effective environmental impact self-assessment - through reporting structures covering ‘the organisation and its reporting practices; activities and workers; governance; strategy, policies, organisational reporting practices and stakeholder engagement.’ Finally, GRI 3: Material Topics provides guidance on how to determine and disclose on material topics through further disclosures, establishing the ‘material’ recipients of organisational impact (positive or negative).
Several other major revisions to the Universal Standards elicit the importance of adequate preparation time, with major disclosure updates as well as novel compliance and due diligence stipulations encouraging sufficient anticipation and adjustment. The addition of Sector Standards present another major update, abridging sustainability impact analysis with several critical attributes. Specifically, by developing material guidelines for 40 sectors (including agriculture, fishing, oil, coal and gas), Sector Standards offer targeted stakeholder engagement processes, tailored sustainability contexts, impact metrics and appropriate disclosure configurations for specific industries. This structure amplifies the sectoral relevancy of the updated GRI Standards, equipping organisations with a more complete toolkit with which to identify and address sustainability issues.
Australian Ethical, an investment firm who offer products predicated on environmental stewardship, fiscal sustainability and social development, have used the GRI Standards since 2002, and hope to integrate the updated Standards alongside greater stakeholder assessment processes in FY23. Based on their FY22 Sustainability Report, Australian Ethical sustains their ‘Principal Investment Leadership’ precisely through the mechanisms offered by the GRI Standards. These mechanisms include but are not limited to market presence impact, emissions and carbon footprint monitoring, supplier social assessments, and local community development initiatives. They also appear well positioned to integrate Sector Standards within their ESG impact analysis, already implementing industry frameworks as a source of ‘sector-sustainable business [and investment] criteria’, demonstrating the targeted sustainability drives the Sector Standards now actively seek to proliferate. Championing ‘investors as ethical stewards’ Australian Ethical reflects a confirmation of the efficacy of the GRI Standards, as well as the standard of exceptional sustainability reporting. Recently generating substantial attention for divesting from Lendlease over local ecological concerns, Australian Ethical seeks to address both the 'trust deficit' incurred by current trends in Greenwashing, whilst applying the GRI Standards to institute social and environmental good where others have failed to do so. Simply put, the GRI Standards appear to have empowered Australian Ethical to act upon, rather than solely report the various sustainability issues inherent to fund management.
The GRI Standards sustain the structure, comparability and versatility inherent to efficacious sustainability reporting. Revisions and amendments effective from January 2023 hope to strengthen these attributes whilst addressing the discrepancies inherent to a sector as novel as sustainability reporting. Guided by the UN and OECD consensus on best business practice, environmental stewardship and employment rights, the GRI Standards remain a ‘gradually evolving’ framework for conscientious business practice, and one which appears well positioned to inform organisational sustainability impact assessments for the foreseeable future.