The revision of the Global Reporting Initiative (GRI) system of Standards will support companies on their transparency journey and put them in a good position to meet the emerging regulatory disclosure requirements such as the EU Corporate Sustainability Reporting Directive (CSRD) and the IFRS plans for Enterprise Value Standards.
It might also help to comply with the new Swiss rules deriving from the indirect counterproposal.
What will you need to consider?
The revision of the GRI Universal Standards 2021 will be effective for information published on or after 1 January 2023.
Companies currently reporting in accordance with GRI Standards 2016 which determine their material topics based on the significance of their economic, environmental and social impacts are in general well prepared for the upcoming reporting requirements.
However, it is still important to review current reporting practices, to ensure compliance with the updated GRI Standards 2021:
- As the updated Standards include a revised approach to materiality and material topics, it will be important for companies to ensure that they have understood and applied the minimum reporting requirements regarding e.g. the concept of due diligence processes and responsible business conduct.
- With the introduction of the Sector Standards, companies operating within an industry which are described in one of the Sector Standards are required to review each material topic described in their applicable standard, and determine whether it is relevant to report on the material topic or not.
- It will be important for companies to ensure that they have captured the revised general reporting requirements regarding provision of information for their reporting practices, activities and workers, governance, strategy, policies and stakeholder engagement.
- Companies that think about how to report about their due diligence duties as per the newly amended Swiss Code of Obligations (indirect counterproposal) might want to look into GRI to do so.
What are the key revisions?
The revision of the system of standards has been made to address gaps between current disclosure frameworks and intergovernmental expectations for responsible business practice, including human rights reporting.
It also aims at improving the overall transparency on companies’ impact on the environment and society.
Presented below are the key updates introduced in the revision:
The updated GRI Standards 2021 consist of a modular system set of three series:
- The "Universal Standards" – apply to all organisations.
- The new "Sector Standards" – allowing for reporting on sector-specific impacts.
- The "Topic Standards" – list the disclosures relevant to a particular topic.
Revised Universal Standards
The updated GRI Universal Standards reflect the expectations for responsible business conduct in authoritative intergovernmental instruments such as the United Nations (UN) Guiding Principles on Business and Human Rights, the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises, the OECD Due Diligence Guidance for Responsible Business Conduct, the International Labour Standards, and the International Corporate Governance Network (ICGN) Global Governance Principles.
With this, revisions to the minimum reporting requirements have been made. According to GRI, companies applying the GRI Standards must report on the following information:
- The company’s policy commitments for responsible business conduct, including the policy commitment to respect human rights, and how the commitments are embedded throughout the company’s activities and business relationships.
- Grievance mechanisms and other remediation processes.
- Engagement with (affected and potentially affected) stakeholders.
- Due diligence processes for identifying actual and potential negative impacts on the economy, environment and people, including impacts on their human rights, across the company’s activities and business relationships.
- Prioritization of impacts based on their significance, or severity in the case of negative human rights impacts, to determine material topics for reporting.
- Management of material topics, including information on specific policies, goals and targets, actions to prevent, mitigate and remediate negative impacts, and the effectiveness of actions taken.