ESG evaluation framework series: A guide to Global Reporting Initiative (GRI)
At Artemis Impact, we are committed to solving your queries around impact investment, creation, management and evaluation. In our effort to do the same, we come up with detailed and extensive explainers on wide-ranging topics.
Our latest series of blogs is around ESG evaluation criteria. We started by explaining the ESG evaluation framework, its significance, benefits and pitfalls as well as what organizations and investors must keep in mind before working with it. We also listed some of the top evaluation frameworks for companies and investors.
For those of you who remember our listicle on the top ESG evaluation frameworks and felt like knowing more about each of the frameworks in detail, look no further. In the upcoming blogs, we shall talk about a select few ESG evaluation frameworks. This blog is dedicated to The Global Reporting Initiative (GRI).
Understanding GRI standards
The GRI is known to lead sustainability reporting for about 25 years now and is known to provide one of the most widely used ESG frameworks. Initially, the GRI standards catered to environmental practices but later expanded to include governance, human rights, among others. The framework is suited to small to large firms across sectors and industries around the world.
The GRI describes itself as an “independent, international organization that helps businesses and other organizations take responsibility for their impacts, by providing them with the global common language to communicate those impacts. We provide the world’s most widely used standards for sustainability reporting – the GRI Standards”.
Specialization and relevance
GRI works with businesses, investors, policymakers, civil society, labor organizations and other experts to develop the GRI standards and “promote their use by organizations” across the globe.
The standards, per se, deal with all three aspects of ESG criteria – environmental, social and governance. “The Standards are advancing the practice of sustainability reporting and enabling organizations and their stakeholders to take action and make better decisions that create economic, environmental and social benefits for everyone,” states the website.
- GRI standards can help boost sustainability performance and measure the same periodically while also facilitating risk mitigation and management.
- These standards are aimed at identifying areas in a given sector with maximum sustainable impact and accordingly, help a firm figure out the most relevant and material aspects for them to cover and report to meet stakeholders’ expectations.
- They are tailormade, like a collection of universal standards. The GRI 100 series can be applied to any company, large or small, that is preparing a sustainability report. The series is divided into 3 segments – foundation, general disclosures, management approach.
Pitfalls and challenges
- Some of the critics argue on the lack of comprehensiveness in GRI standards, claiming that the same are not always properly implemented by businesses.
- As far as the challenges in the face of the implementation of GRI standards go, sustainability entrepreneur and ESG specialist Daniel Botterill, in one of his publications, says, “the implementation of the framework is sometimes misaligned with its aim of legitimizing the sustainability actions of an organization. However, with reports being accessible to anyone and with large endorsements from the UN Global Compact and others, the value of the information is ultimately in the eye of the beholder”.
- In addition to this, sometimes there is a lot of information available and if you are just beginning, then you would need to go over a lot of documents to be able to implement them
GRI offers a range of tools, including software support, for sustainability reporting.
“Reliable software and tools can make sustainability reporting easier and more manageable. GRI offers a certification service for software and tools that make use of content from the GRI Standards. Our team assesses this content for its accuracy before authorizing its use so that reporting organizations know which software and tools they can trust and use in their reporting process,” as stated on the GRI website.
The website has listed a step-by-step process to get your software or tool certified by the GRI and also features a comprehensive list of its certified software partners across different global markets.
GRI standards, in a way, have enabled and facilitated comparability for organizations and investors across sectors and industries around the globe, leading to more accountability, transparency and effective sustainability reporting. They offer some sort of universality in a domain that otherwise lacks structure and tightness. For many firms, they serve as a good starting point and there is a lot to explore, therefore, as stated previously, they can be a good starting point – a valuable guide to effective and streamlined sustainability reporting.
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