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    GRI Raises ESG Reporting Requirements

    Stockholm (NordSIP) – The Global Reporting Initiative (GRI) announced a revision of the GRI Standards had taken place to strengthen requirements and deliver an enhanced level of transparency for ESG impacts. According to the initiative, the changes represent a “major update to the very foundation of the world’s most widely used sustainability reporting standards” and will affect the more than 10,000 companies that already use GRI for their reporting.

    “With the most significant change since the GRI Standards launched in 2016, the revised Universal Standards set a new global benchmark for corporate transparency. Fully addressing gaps between the available disclosure frameworks and intergovernmental expectations for responsible business, including human rights reporting, they will enable more effective and comprehensive reporting than ever before. Built around the concepts of impact, material topics, due diligence and stakeholder engagement, these updates make it clear how companies can provide transparency and accountability in what they report. We are providing them with the tools to demonstrate understanding of their impacts and respond to the information demands of their stakeholders, including investors, governments, and civil society,” said Judy Kuszewski, Chair of GRI’s independent Global Sustainability Standard’s Board.

    Reviewed Universal Standards

    The Universal Standards 2021 are in three parts and come into effect for reporting from 1 January 2023, with early adoption encouraged. GRI 1, “Foundation” replaces GRI 101: 2016 and introduces the purpose and system of GRI reporting, setting the key concepts, requirements and principles that all organizations must comply with to report in accordance with the GRI Standards. GRI 2, “General Disclosures”, replaces GRI 102: 2016, and update and consolidate disclosures on reporting practices, activities and workers, governance; strategy, policies and practices, and stakeholder engagement. GRI 3, “Material Topics” replaces GRI 103: 2016 and offers step-by-step guidance and revised disclosures on how an organisation should determine, list and manage each of its material topics.

    The standards update seeks to achieve three goals. It hopes to ensure the quality of reports and improve decision-making by highlighting material topics, reporting principles, requirements and structure. It also seeks to fully reflect due diligence expectations for organisations to manage their sustainability impacts, including on human rights, as set forth in intergovernmental instruments by the UN and OECD. Finally, the reviewed standards propose to allow companies to respond to emerging regulatory requirements, such as the EU’s Corporate Sustainability Reporting Directive and the enterprise value reporting plans by the IFRS Foundation, the UN Guiding Principles on Business and Human Rights, OECD Guidelines for Multinational Enterprises, OECD Due Diligence Guidance for Responsible Business Conduct, ILO International Labor standards and ICGN Global Governance Principles.

    The revisions to the Universal Standards were subject to a public comment period in 2020, providing stakeholders with an opportunity to input to the proposed changes. They complete phase one of the review of GRI’s human rights related disclosures, which is based on the recommendations of a multi-stakeholder technical committee.

    Sector Standards

    On the same occasion, the GRI also unveiled the first GRI Sector Standard, targeting oil and gas, as part of GRI’s integrated modular system of sustainability reporting. Organisations begin with the Universal Standards, before moving on to considering applicable Sector Standards alongside relevant Topic Standards.

    Following the oil and gas standards, similar sector standards are expected to be published  for coal, mining, agriculture, aquaculture and fishing as the first wave of such benchmarks for the 40 sectors GRI has identified. GRI hopes that companies will be better able to focus reporting on the issues that matter most within their sectors, with the addition of Sector Standards.

     

    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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