New GRI Universal Standards 2021: sector-specific standards aim to provide greater clarity and transparency
The Global Reporting Initiative’s (GRI) new sustainability reporting standards aim to improve the flow of information to investors on human rights, while improving the overall transparency and governance of companies’ impacts on the environment and society.
The basis of sustainability reporting is to enable organisations to identify and prioritise their influence on the economy, environment and people so that they can subsequently communicate them in a transparent manner.
What are the GRI standards?
The GRI (Global Reporting Initiative) Standards are a modular system of interrelated standards which form the framework for sustainability reporting that is most widely used globally as well as in Austria. They enable any organisation – large or small, private or public – to understand and communicate its impact on the economy, the environment and people in a comparable and credible way, increasing transparency about its contribution to sustainable development. In addition to reporting companies, the standards are also of great importance to many other stakeholders – including investors, policymakers, capital markets and civil society. As one of the most widely used reporting standards, the new adjustments are therefore very significant.
What is new about the GRI Standards?
On 5 October 2021, the highly anticipated revised GRI Universal Standards were published. This adjustment represents the most significant update since the GRI moved from providing guidance to setting standards in 2016.
The forward-looking approach provides organisations with the best prerequisites to respond to emerging regulatory disclosure requirements such as the EU Corporate Sustainability Reporting Directive (CSRD) and the IFRS plans for Enterprise Value Standards.
The updated GRI Standards system has now been designed as an easy-to-use and modular set of three series:
- The “Universal Standards” – now revised to include reporting on human rights and environmental due diligence in line with intergovernmental expectations – apply to all organisations;
- The new “Sector Standards” allow for more consistent reporting on sector-specific impacts;
- The “Topic Standards” – aligned with the Universal Standards – then list the disclosures relevant to a particular topic.
The revised Universal Standards now provide clearer requirements for organisations to address due diligence processes and material topics, and structure the content more coherently to enable transparent reporting.
The new Sector Standards offer companies from different sectors/industries the opportunity to understand their material topics in a more comprehensive and informative way. In addition, they serve to increase the transparency of the respective industry’s impact on people, the economy and the environment. A total of 40 Sector Standards will be published – previously there was only the Oil & Gas Standard.
The Topic Standards have also been updated and are now divided into a total of 31 standards instead of the 200 (Economic), 300 (Environmental) and 400 (Social) series. These serve as a basis for organisations to publish information on the respective material topics.
When do the new standards apply?
For organisations wishing to report according to GRI, the new standards will become effective on or after 1 January 2023. This means that their application will be mandatory from that date, although earlier adoption is recommended.
If you need any support with preparing your company for the implementation of the new criteria, we are gladly assisting you with our expertise.