How to report in compliance with both GRI and ESRS?
What do the Global Reporting Initiative (GRI) and the European Sustainability Reporting Standards (ESRS) have in common? Quite a lot. However, there are also some important differences. For example, if you report in compliance with ESRS, you can state that you also report ‘with reference to’ GRI (which means reporting on specific topics, chosen by the organization itself). However, this statement does not hold the other way around.
Let's say you want to report according to both GRI and CSRD. How can you do this in the most efficient way? We will tell you all about it in this blog. To learn more about the basic concepts of CSRD / ESRS first, please refer to our previous blogs.
GRI vs. CSRD/ESRS
GRI was founded in 1997 with the aim to ensure organizations adhere to responsible environmental conduct principles, which was later broadened to include social, economic and governance issues. The first version of GRI guidelines was published in 2000, providing the first global framework for sustainability reporting. More than 20 years later, the European Union's Corporate Sustainability Reporting Directive (CSRD) was finalized (in 2022), accompanied by the ESRS in which the reporting standards are outlined. The DNA of the ESRS is very close to the GRI, and the expected sectoral standards of the ESRS are aimed to be very close to the GRI's as well.
Organizations can choose to report to GRI (voluntarily), whereas the CSRD will be mandatory for certain organizations (large companies that meet two of the following three criteria: turnover exceeding €50 million per year, more than €25 million assets, and/or more than 250 employees). Another important difference is that the CSRD applies to the European Union, whereas GRI is a global framework. The last general difference is that the CSRD applies a double materiality perspective (both financial and impact), where the GRI only covers the impact materiality.
Now, let's dive into the interoperability of the GRI and ESRS to see how you can report on both standards in an efficient way.
Interoperability GRI and CSRD/ESRS
The GRI and ESRS have a high level of interoperability. The standards have a similar structure (cross-cutting standards, topical and sector standards) and a similar coverage of sustainability topics and sectors. Furthermore, the concept of impact materiality is aligned. Although CSRD/ESRS adopts double materiality, which means that reporting is required on subjects that are material from both an impact and a financial perspective, the starting point is impact materiality. The process proposed by the ESRS is based on the impact materiality perspective of GRI. Lastly, most disclosures are aligned as well. Thus, GRI reporters are already well prepared to start reporting under the ESRS.
To assist organizations in reporting with the GRI standards through their ESRS sustainability statement, GRI and EFRAG have published a (draft) joint interoperability index. This index maps the GRI standards to overlapping ESRS disclosure requirements and explains the differences where relevant. Differences could be in:
- Granularity or data type: e.g., the GRI requires more granularity or the GRI requires quantitative data where the ESRS requires qualitative data,
- Scope: the GRI could have additional metrics compared to ESRS, and
- Definition: this is only the case for workers who are not employees, for which GRI has a broader definition than ESRS.
The starting point of this mapping is GRI, hence not all ESRS requirements are covered (e.g., when there is no similar GRI disclosure). It could also be that the ESRS ask for more granularity or have a greater scope. This becomes visible in the second index, which will map ESRS datapoints to GRI disclosures. We have incorporated all of this information in our CSRD-tool. Send us an email on info@2impact.nl if you would like to learn more.
Figure 1: (draft) joint interoperability index GRI – ESRS. Source: GRI & EFRAG, 2023.
Reporting ‘with reference to’ or ‘in accordance with’ GRI Standards for ESRS reporters
Organizations can choose to report with ‘reference to’ or ‘in accordance with’ GRI Standards. With reference to GRI Standards entails reporting on specific topics, to be decided by the organization, such as climate change. Yet, reporting in accordance with GRI Standards requires organizations to report on all material topics and related impacts.
ESRS reporters can be considered as reporting with reference to the GRI Standards. The interoperability index shows which GRI disclosures are reported by virtue of applying the ESRS and the organization does not need to report additional GRI disclosures. However, if a material impact is not covered in the ESRS, organizations can choose to include relevant GRI disclosures in the sustainability statement as entity specific.
It is important to note that even though reporting in compliance with ESRS counts as reporting with reference to GRI, reporting with reference to GRI does not guarantee reporting in compliance with ESRS, as the ESRS has more (mandatory) datapoints than what is needed for reporting with reference to the GRI Standards.
The interoperability index also supports ESRS reporters that want to report in accordance with the GRI Standards. The index shows which GRI disclosures are already reported by virtue of applying the ESRS. Additionally, applicable GRI disclosures not covered by ESRS should be reported in the sustainability statement as either entity specific disclosures for material matters covered by ESRS, or as additional disclosures when the material matter is not covered by ESRS. As stated above, for reporting in reference to GRI, this is voluntary, whereas it is mandatory for reporting in accordance with GRI.
As you can see, there is no need for two reports. Both GRI Standards and ESRS can be included in the same sustainability report.
To conclude
The GRI Standards and ESRS have a high level of interoperability, but they are not the same. ESRS reporters can use the interoperability index to assist the process of reporting with reference to or in accordance with the GRI Standards. This first index maps ESRS to GRI disclosures. The second index maps ESRS data points to GRI Standards. Both indices will be useful when leveraging both GRI and ESRS and to achieve efficiency in reporting on both frameworks.
Do you have additional questions on how to become GRI- and/or CSRD-compliant? Feel free to visit our website or send an email to info@2impact.nl.
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