April 4, 2024
The Global Reporting Initiative (GRI) is a system of reporting standards that works with entities around the world to enable them to report on sustainability. It’s a not-for-profit organization and is based on a network. The GRI standards can apply to large and small firms, policymakers, investors, financial institutions, etc., and include reporting on their impact on people, the environment, and the economy across the globe. It’s a voluntary framework for reporting that we’ll explore more of in this article.
There are more than 14,000 reporters in over 100 countries that use GRI standards for their sustainability reporting system. The GRI standards are set by the Global Sustainability Standards Board (GSSB). They are the most widely used internationally according to KPMG. GRI was created with anyone in mind being able to report on their sustainability.
In this article, we’ll cover the history of how the GRI was formed, why companies should be using a sustainability reporting framework, and some facts about the GRI reporting standards.
The GRI has its origins in the late 1990s, emerging from a growing recognition of the need for a standardized framework to guide sustainability reporting for organizations. Here's a brief overview of its history:
In 1997 the GRI was founded with the support of the Coalition for Environmentally Responsible Economies (CERES) and Tellus, in partnership with the United Nations Environment Programme (UNEP). The initial goal was to enhance global comparability and quality of sustainability reporting. This followed the Exxon Valdez oil spill in 1989 that dumped 11 million gallons of crude oil into the Alaskan Gulf. A group of socially responsible investors, environmentalists, and non-profit organizations decided to form the coalition to keep companies accountable for their actions and prevent a disaster like this from happening again.
In 1999 the release of the GRI’s first sustainability reporting guidelines marked a significant step forward in providing a framework for voluntary reporting on environmental, social, and governance (ESG) performance.
Between 2000-2006, the GRI evolved from a project within CERES to an independent institution, establishing its Secretariat in Amsterdam, the Netherlands. During this period, the GRI developed and refined its guidelines, with the G2 Guidelines released in 2002 and the G3 Guidelines in 2006, each iteration expanding and improving upon the last.
The G3 Guidelines introduced the application levels, which allowed organizations to gradually approach full compliance, enhancing flexibility and encouraging wider adoption.
The G3.1 Guidelines of 2011 provided additional guidance and clarified reporting on gender, community, human rights, and other critical areas.
Recognizing the need for a more robust and updatable framework in 2013, the GRI began transitioning from guidelines to standards.
In 2016, the GRI Standards were launched, replacing the G4 Guidelines. These standards are modular and interrelated, designed for use by organizations of any size, sector, or location. They marked a significant shift towards a global best practice for sustainability reporting.
Since 2016 the GRI has continued to update and expand the Standards to respond to evolving global sustainability challenges and stakeholder expectations. This includes sector-specific standards and updates to address emerging issues such as climate change, human rights, and waste management.
As a result of these events, the GRI's development reflects broader trends in corporate sustainability, including increasing stakeholder demand for transparency, the integration of sustainability into core business strategies, and the growing recognition of the importance of sustainability issues to long-term business success and societal well-being.
For more recommended reading check out our articles:
• Article: How to Calculate Your Carbon Footprint with Net0
• Article: Activity, Production, and Spend Based Emission Factors: A Comprehensive Comparison for Effective Carbon Accounting
• Article: 10 Ways to Put Carbon Accounting on Auto-Pilot
Data collection for the GRI can be done using internal and external sources depending on the sector and topic. All information reported should be reviewed before submission.
Net0 is beneficial for all GHG emissions management because the platform is fully aligned with all governmental standards. As you calculate, measure, and track emissions data, you’re able to create a benchmark and set climate-related goals. This enables organizations to see the full picture of their climate-related impact and transmit that information accurately to stakeholders and in real time.
Reporting to the GRI offers several benefits for organizations, reflecting its role in promoting sustainability and transparent reporting. Here are some key reasons why an organization should consider reporting to the GRI:
Transparency - GRI reporting helps organizations communicate their impacts on critical sustainability issues such as climate change, human rights, and corruption transparently. This openness builds trust with stakeholders, including investors, customers, employees, and the community.
Stakeholder engagement - It facilitates dialogue with stakeholders by providing a standardized set of indicators against which organizations can measure and report their economic, environmental, and social performance. Engaging stakeholders in this way can help identify and address concerns and expectations, fostering stronger relationships.
Benchmarking and target setting - The GRI framework allows organizations to measure their sustainability performance over time, helping them identify areas of improvement and track progress. It also enables benchmarking against industry peers, encouraging a competitive approach to sustainability.
Risk management - By identifying and communicating sustainability risks and opportunities, GRI reporting helps organizations address potential issues before they escalate.
Compliance and access to capital - Sustainable investments are no longer optional. Investors and financial institutions are paying more attention to sustainability issues, using such reports to make informed decisions. Reporting to the GRI improves an organization's access to capital by demonstrating a commitment to sustainability.
Reputation and competitive advantage - Organizations that report to the GRI can enhance their reputation by demonstrating corporate social responsibility. This can lead to a competitive advantage by differentiating the organization in the marketplace, attracting customers and employees who prioritize sustainability.
Supporting the UN Sustainable Development Goals (SDGs) - GRI reporting empowers organizations to align their sustainability efforts with the SDGs, contributing to global priorities and showcasing their commitment to broader societal goals.
Long-term value creation - Focusing on sustainability issues and reporting to the GRI drives innovation and efficiency improvements, reduces costs, and creates value for the organization and its stakeholders over the long term.
It’s important to collect accurate data from as many sources as possible. This could mean qualitative or quantitative data because the GRI covers a wide range of material standards. Taking a materiality assessment will assist with the process to see where the organization stands amongst its peers and how it can set targets in different areas to improve performance. Starting with reporting data through ESG software minimizes risks of non-compliance and builds trust among stakeholders. It also makes it easier to calculate the metrics that were impossible a few years ago without going through expensive reporting agencies. ESG software utilizing AI now adds simplicity and precision in seconds to what was previously a lengthy and difficult process.
GRI standards include three categories to report on universal, sector, and topics.
All three categories go into extensive detail, mostly based on the 40 sectors and can be downloaded from the GRI website. They range anywhere from human rights, to protection of the environment, to reporting on GHG emissions, to responsible waste management, etc., and cover a broad set of topics within the sustainable scope. ESG investors have been looking towards these standards for years before the enforcement of ESG and climate-related disclosures of this decade such as:
• The SEC Climate Disclosure
• The Corporate Sustainability Reporting Directive (CSRD)
• The Streamlined Energy and Carbon Reporting Regulation (SECR).
Although the GRI is not mandatory as are these recent disclosure directives, it opens up access to sustainable finance as well as puts companies ahead of competitors in the green economy.
The GRI is a full-scale ESG reporting development. They offer internal and external resources to submit your sustainability report. For managing climate-related data and reporting on greenhouse gas emissions, schedule a demo with Net0. An expert will guide you through the platform, demonstrating its advantages for calculating, measuring, and tracking emissions data for submitting a thorough and compliant GRI report.
