“Over the past 23 years the GRI Standards have become the world’s most widely used
(GRI Global Standards Fund, Partner with the Global Standards Fund to help businesses take responsibility for their impacts, 2021)
and internationally accepted tool for corporate transparency. More than 10,000 companies around the world communicate their impacts using the GRI Standards”.
GRI (Global Reporting Initiative) is an international organization headquarter in Amsterdam and with seven regional offices, which was established in 1997 in Boston as a consequence of the strong public pressure expressed through many outcry over the environmental damage of the Exxon Valdez oil spill. On March 24, 1989, Exxon Valdez, an oil tanker owned by the Exxon Shipping Company after leaving on day before the port of Valdez, Alaska, in its way to Long Beach, California, struck the Bligh Reef in Alaska’s Prince William Sound area. From the total of 53 million gallons of the crude oil onboard, 11 million gallons (more than 40 million liters) of crude oil were spilled into the water, producing one of the greatest ecological catastrophes caused by man. Immediately after the accident, the oil had covered 1,300 miles of coastline and killed hundreds of thousands of seabirds, otters, seals and whales. Today, after more than 30 years later, pockets of crude oil still are still present in some locations.
The investigation that was conducted afterwards concluded that the cause of the accident was a human error produced by the unlicensed third mate who was steering the ship at the moment of the accident. The investigation that was conducted afterwards concluded that the cause of the accident was a human error produced by the unlicensed third mate who was steering the ship at the moment of the accident. The investigators discovered that because captain Joseph Hazelwood had consumed alcohol, he allowed a subordinate who was not qualified to steer the oil tanker.
After many street protests that were demanding the accountability for the produced damages, the first version of the GRI Guidelines (G1) were published in 2000 – providing the first global framework for sustainability reporting, thus being the first accountability mechanism for companies. Initially, it was about respecting environmental principles, but later these were extended to cover social, economic and governance issues.
After, G2, G3 and G4 editions which allowed expanding and improving the reporting guidelines, in 2016, GRI decided to make a transition from providing guidelines to setting the first global standards for sustainability reporting – the GRI Standards. The Standards are periodically reviewed and supplemented: in 2019 the Standard on Tax (2019), in 2020 the Standard on Waste and a major update to the Universal Standards (2021) that will be applied starting with 2023.
Why was so important the work of GRI? Because through these guidelines that later became standards, this organization has succeeded to provide to all type of companies and organizations a common framework based on which they will communicate their environmental, social and economic impact. Even if the work of the GRI is far from perfect, without a doubt, if today we can talk about legislation that transforms sustainability reporting from voluntary to mandatory for many companies in Europe, it is largely owed to this organization, GRI.
Because none of the versions between G1 and G4 are currently applied, we will present in this article only how the GRI Standards are structured. The GRI Standards can be accessed and used freely by any interested organization and are structured in three series: the GRI Universal Standards, the GRI Sector Standards, and the GRI Topic Standards. In order to facilitate its usage, each Standard contain disclosures to support the reporting organization in providing the information about itself and its impacts. The disclosures can have requirements which contain the information that must be reported by the organization and also can contain recommendations. Respecting all the requirements within a disclosure allows the reporting organization to declare that its report is in accordance with the GRI Standards. Instead, respecting the recommendations is an important mechanism that enables the improvement of the sustainability reporting and encourages the creation best practices.
The GRI Universal Standards which is applying to all organizations, contain information about how to use the standards and the principles that must be respected (GRI 1: Foundation 2021 (GRI 1)), guidance regarding the type of information which must be provided for understating the organization’s profile and scale, including its governance, strategy, policies and stakeholder engagement practices (GRI 2: General Disclosures 2021 (GRI 2)). The third part of the GRI Universal Standards, GRI 3: Material Topics 2021 (GRI 3) presents details about the process an organization must follow to determine which sustainability topics are material based on its relevant impacts on the environment, people and economy. The latest revision of the GRI Universal Standards will apply starting with the reports which will be published in 2023.
The GRI Sector Standards which will be developed for 40 sectors, considered to have the highest impact on people and/or environment, support the sustainability reporting of different organizations from the same sectors by presenting a specific list of likely material topics and indicating relevant disclosures to report on these topics. A Sector Standard may contain additional disclosures that are not included in the Topic Standards. The Sector Standards are under development or revision, the latest one being for Oil and Gas (GRI 11), Coal (GRI 12), as well as Agriculture, Aquaculture and Fishing (GRI 13). For the Mining sector the standard is currently underway. So, when an organization wants to report its sustainability impacts using GRI Standards, should first verify if there are already available specific standards for the sector in which it operates under the Sector Standard section of the GRI website.
One of the strong points of these standards is the list of sustainability topics that are included in the third section of the GRI Standards, the GRI Topic Standards, such us: water, energy, waste, occupational health and safety, human rights and tax. Based on the result of its materiality assessment conducted by the reporting organization in line with the requirements from the GRI 3: Material Topics 2021 (GRI 3), the organization will select the applicable Topic Standards.
Certainly, the way in which the GRI Standards are structured, but also the way in which they are elaborated, with the involvement of the most relevant actors in the economic sectors, makes these standards most widely used tool for the realization of sustainability reports.
However, what will happen in the future with these now so popular standards and how they will be affected by the recent CSRD Directive and the new European Standards, ESRS, remains to be seen. In my opinion, having in view their worldwide recognition, the GRI Standards will continue to represent, for many years from now on, an important tool for the both reporting organizations and for the users of sustainability information, such us investors, credit institutions, communities and others.
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