Our colleagues at BDO Australia provided an overview of sustainability reporting using the GRI Standards. We’ve revised the article to provide a Canadian perspective.
Sustainability reporting is quickly becoming a prevalent force for driving positive change in organizations. Through the adoption of sustainability reporting, organizations not only enhance their credibility and stakeholder appeal, but also showcase their commitment to sustainable development. The Global Reporting Initiative (GRI) Standards provide a robust and popular path to achieving this.
In Canada, the GRI Standards are one of the leading ESG frameworks that organizations are currently reporting against due to their wide range of topics, metrics that apply to a large stakeholder audience, and the credibility they have gained since their implementation in 2000.
We unpack the purpose and scope of the GRI Standards and how they can empower organizations to embrace sustainability in innovative ways tailored to their unique sectors.
The benefits of sustainability reporting for your organization
Sustainability reporting can bring a host of benefits to an organization, from enhancing reputation and attracting stakeholders to building credibility and creating value. Sustainability reporting supports organizations in managing risks adeptly and developing a systemic approach to addressing pressing environmental and social challenges. Ultimately, the transparency and accountability that arise as a by-product of sustainability reporting serve as strong foundations for trust, and can also be a means to proactively stay ahead of pending regulatory requirements.
GRI Standards: Purpose and scope
Governed by the Global Sustainability Standards Board (GSSB), the GRI Sustainability Reporting Standards were first published in 2000 and are regularly reviewed to ensure they continue to reflect global best practices.
These standards offer a universally accepted structure that assists organizations in effectively gauging, managing, and communicating their governance, economic, environmental, and social impacts. By adhering to the GRI Standards, companies can disclose pertinent information consistently and transparently, enhancing comparability among different organizations and industries.
The GRI Standards encompass a wide array of environmental, social, and governance (ESG) matters, such as human rights, labour practices, biodiversity, energy, and greenhouse gas (GHG) emissions. This comprehensive, all-encompassing approach ensures that businesses can evaluate and report on all significant facets of their sustainability and ESG performance.
The GRI Standards apply to organizations of varying sizes and industries. Whether an organization is a small local business or a multinational corporation, the GRI Standards offer a flexible framework that can be customized to fulfill specific reporting requirements. This inclusiveness enables companies across diverse sectors to participate in sustainability reporting and contribute to a more environmentally friendly and accountable future.
Getting started with the GRI Standards
To effectively implement the GRI Standards, businesses need to consider the following elements.
Materiality is assessed by engaging with stakeholders. Organizations should actively involve employees, customers, investors, and communities to understand their sustainability expectations, concerns, and priorities. This engagement ensures that reporting addresses stakeholders’ information needs and reflects their perspectives.
Application and structure of the GRI Standards
The modular structure provided by the GRI Standards has emerged as the gold standard for sustainability reporting, providing a robust framework that guides organizations towards comprehensive and relevant reporting. Under the structure, GRI Standards are categorized into three buckets:
Three areas of general disclosure that all organizations need to apply to their reporting. They include:
GRI I – Requirements and principles for using the GRI Standards.
GRI 2 – Disclosures about the reporting organization.
GRI 3 – Disclosures and guidance about the organization’s material topics.
Standards addressing issues identified by the broader industry. Organizations should use the Sector Standards that apply to their sectors.
Standards that support adequate reporting on the topics identified as material to the organization. Organizations should select Topic Standards to report specific information on their material topics.
Sustainability reporting varies across industries, considering each sector’s unique challenges and impacts. Based on these considerations, businesses should identify and prioritize relevant sustainability topics. For example, the energy industry may focus on carbon emissions, while the manufacturing industry may prioritize carbon emissions as well as labour practices, and the agricultural sector may emphasize water management.
The GRI Standards recognize the sector-specific nature of sustainability reporting. They provide guidance on sector-specific disclosures and indicators, ensuring comprehensive coverage of topics across industries. Companies can effectively address their sustainability impacts and contribute to industry-wide progress by tailoring their reporting to industry-specific challenges.
However, we know that not all organizations are identical, even within a sector. So, organizations must also address sustainability issues that are pertinent to them and their stakeholders. The Topic Standards enable the disclosure of non-industry-specific issues as identified through the materiality assessment.
Other considerations when implementing the GRI Standards
Once the relevant standards have been identified for reporting, organizations also should consider the specific disclosures and structure of the reporting, including:
- Core reporting—covering minimal reporting requirements to understand the nature of the organization, material topics, and related effects; or
- comprehensive reporting—including additional disclosures for more extensive reporting on areas such as strategy, ethics and integrity, or governance.
By offering organizations the flexibility to choose between the core and comprehensive options, the GRI Standards allow for the diverse reporting needs of different entities. This adaptability enables an organization to tailor its sustainability reporting based on its specific priorities and the expectations of its stakeholders. The structured nature of the GRI Standards, with its sections, components, topics, and sectors, ensures that no vital aspect of sustainability performance is overlooked, thus instilling confidence in the credibility and transparency of the reported information.
Notably, the GRI Standards also align with other frameworks and initiatives, for example, the United Nations’ Sustainable Development Goals, the Task Force on Climate-Related Financial Disclosures, the International Sustainability Standards Board, the Sustainability Accounting Standards Board, and others.
Guidance along your sustainability reporting journey
Ready to take steps toward addressing your carbon footprint in your sustainability reporting? Our ESG team is here to guide you through every stage of the journey, helping to ensure your sustainability goals are met effectively and transparently. With our in-depth knowledge of sustainability practices and ESG reporting requirements, we can assist your business in developing your sustainability reporting practices.
Contact us today to explore how we can help you navigate the complexities of sustainability reporting and ensuring that your efforts are impactful and aligned with industry best practices.