The GRI reporting initiative and the European ESG reporting
What is the GRI Reporting Initiative?
The GRI reporting initiative is a globally recognised sustainability reporting framework. The international non-profit, Global Reporting Initiative, developed it and updates it regularly to help organisations communicate their impacts on the environment, society, and governance (ESG).
The GRI provides standards that cover a wide range of sustainability topics, from biodiversity to human rights. These standards aim to enhance transparency and accountability in corporate reporting, much like the CSRD and ESRS standards in the EU. The GRI guides organisations to report their sustainability performance consistently and comparably.
What does the GRI Reporting Initiative have to do with ESG?
The GRI reporting initiative is essential in Environmental, Social, and Governance (ESG) reporting. GRI is the most widely used sustainability reporting framework on a global scale. By adopting GRI standards, organisations can systematically disclose their ESG impacts, which include environmental performance, social responsibility, and governance practices.
Transparency is valuable for stakeholders, including investors, policymakers, and civil society, who use this information to make better-informed decisions and drive sustainable development.
How are the GRI and CSRD related?
The Corporate Sustainability Reporting Directive (CSRD) directs ESG reporting in the European Union. The CSRD mandates that large and listed companies report their sustainability performance according to the European Sustainability Reporting Standards (ESRS). The introduction of mandatory CSRD and the ESRS standards in the EU could eventually challenge GRI’s prominence as the most widespread reporting framework companies use.
Luckily for the companies that have reported according to the GRI before the introduction of the CSRD, the GRI and ESRS standards are closely aligned. The European Financial Reporting Advisory Group (EFRAG) has closely collaborated with GRI while developing the ESRS standards. This collaboration ensures similarity between GRI and ESRS, making it easier for companies already using GRI standards to comply with CSRD requirements. EFRAG and GRI have also published a draft for a joint interoperability index to further support the transition from the GRI framework to the CSRD reporting.
What is the difference between the GRI Reporting Initiative and CSRD?
While GRI and CSRD aim to enhance sustainability reporting, they differ in scope and applicability. GRI is a voluntary framework used globally by organisations of all sizes. In contrast, CSRD is a mandatory directive for large or listed companies within the EU, emphasising transparency and accountability to investors and other stakeholders. CSRD requires compliance with ESRS, which has been built on the foundation set by the GRI.
A digital approach to CSRD reporting is a must!
Due to the complexity of the ESRS standards, it is optimal to apply electronic CSRD reporting from the beginning. Therefore, traditional reporting methods are no longer efficient or appropriate. The sustainability report must be submitted through national contact points to ESAP from January 2028 onwards, when the reporting data must meet the requirements of the electronic marking standard (ESEF).
The sustainability report must be prepared in XHTML format and the information it contains must be marked with an electronic XBRL tag. When implementing sustainability reporting under CSRD, the focus should be on the finish line. Starting reporting on a platform specifically designed for it is considerably more profitable in the long run.
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