With the European Union’s Corporate Sustainability Reporting Directive (CSRD) expanding disclosure obligations to tens of thousands of companies, businesses are seeking guidance on how to navigate these new requirements. For organizations already using GRI Standards for reporting their impacts, the recent developments between the Global Reporting Initiative (GRI) and the European Financial Reporting Advisory Group (EFRAG) offer a strategic pathway for compliance.
Unpacking the Interoperability of GRI and ESRS
A recent publication from GRI titled “GRI and Sustainability Reporting in the EU Q&A” delves into the significant alignment between the European Sustainability Reporting Standards (ESRS) and GRI Standards. The document outlines how the collaboration between GRI and EFRAG ensures that the ESRS effectively integrates the widely recognized GRI Standards, facilitating a smoother transition for companies accustomed to using GRI for impact reporting.
Key Highlights of the GRI and EFRAG Collaboration
Impact of Collaboration: GRI’s partnership with EFRAG will result in approximately 42,500 companies reporting their sustainability impacts through the ESRS framework, leveraging the foundational principles of GRI Standards. This integration is crucial for companies aiming to meet the CSRD’s comprehensive disclosure requirements while maintaining consistency in their sustainability reporting practices.
Support Resources for Companies: To assist organizations in aligning their reports with the new ESRS mandates, GRI provides an array of resources including an interoperability index, detailed mapping tables, targeted training courses, and dedicated reporting services. These tools are designed to help companies bridge the gap between GRI Standards and ESRS, ensuring compliance with the CSRD without overhauling existing reporting processes.
Enhanced Cooperation Through New MoU: A Memorandum of Understanding (MoU) signed between GRI and EFRAG in 2023 emphasizes the deepening collaboration on standard-setting and capacity-building initiatives. This MoU not only reinforces the global relevance of GRI Standards but also aligns them with regional reporting requirements, demonstrating GRI’s commitment to supporting international and jurisdiction-specific sustainability disclosures.
Understanding the Interconnectedness of Reporting Standards
The relationship between GRI Standards, ESRS, and the IFRS Sustainability Disclosure Standards is critical for companies to understand. Each framework addresses materiality and impact reporting differently, yet GRI’s ongoing collaboration with EFRAG and other standard-setting bodies, like the International Sustainability Standards Board, ensures that GRI Standards remain a cornerstone in global sustainability reporting.
Peter Paul van de Wijs, Chief Policy Officer at GRI, highlighted the rapidly evolving nature of the sustainability reporting landscape. He noted that GRI’s strategic collaboration with EFRAG during the development of the ESRS ensures that the standards are complementary, focusing strongly on impact reporting with well-defined metrics and disclosures.
Key Updates for Companies Using GRI Standards
Companies already using GRI Standards will find comfort in the fact that much of their current reporting efforts will align with the new ESRS requirements. The ongoing GRI-EFRAG collaboration not only reinforces GRI’s role in the EU market but also supports its global initiatives with the IFRS Foundation and other jurisdictions. Key updates include:
Launch of the GRI-ESRS Linkage Service: This new service provides feedback to organizations on how their GRI-based sustainability reports fulfill ESRS requirements, helping them achieve compliance more efficiently.
New Training Opportunities: GRI Academy will launch ESRS-focused training courses later this year, equipping organizations with the knowledge to effectively meet the CSRD’s complex requirements.
Simplified Resources: A concise top 10 summary version of the “GRI-ESRS Q&A” publication is available, providing quick insights for busy professionals.
Looking Ahead: CSRD and Beyond
Starting in January 2024, the CSRD will mandate disclosures from around 42,500 companies, including large EU entities, non-EU companies listed on European exchanges, and some large non-EU firms by 2028. European companies already versed in GRI Standards will benefit from the framework’s established practices, which cover material impacts, risks, and opportunities—areas also critical under the ESRS. Where ESRS lacks explicit guidance, such as on sector-specific topics or tax-related disclosures, GRI provides the necessary depth and assurance of comprehensive compliance.
In November 2023, a renewed cooperation agreement between GRI and EFRAG reiterated the high level of alignment and interoperability between the ESRS and GRI Standards. Moreover, a joint statement from September 2023 confirmed that GRI Standards continue to play a pivotal role in the EU’s sustainability reporting landscape.
Looking further ahead, GRI plans to release ‘CSRD Essentials in collaboration with Pascal Durand, MEP and CSRD Rapporteur, and the Lefebvre Sarrut Group. This document, expected in May 2024, will address the key themes of the new EU directive, offering companies additional guidance as they navigate this regulatory shift.
Conclusion
As the CSRD reshapes sustainability reporting across the EU, the ongoing synergy between GRI and EFRAG positions GRI Standards as a vital tool for companies aiming to meet new reporting obligations. By leveraging GRI’s resources, organizations can not only comply with the CSRD but also continue to lead in transparent and impactful sustainability reporting on a global scale.
