Interoperability ESRS, IFRS and GRI for reporting on GHG emissions

Reporting on your GHG-emissions: ESRS, IFRS and GRI – similarities and differences

As of January 1st, 2024, the first organisations are obliged to report according to the European Sustainability Reporting Standards (ESRS). These 12 standards, including general, environmental, social and governance topics, are developed by the European Financial Reporting Advisory Group (EFRAG) to determine which sustainability information an organisation should report. 

However, two other key sustainability reporting's standards preceded this new framework - the Global Reporting Initiative (GRI) and the International Financial Reporting Standards (IFRS). Together they outline what and how organizations should report on, including their greenhouse gas (GHG) emissions. 

In this article we highlight similarities and differences between GRI, IFRS and ESRS to support you in identifying potential gaps in your GHG emissions accounting.

For the busy reader, we offer a quick summary, for the details keep reading below and download our whitepaper.

Key differences

Scope 1

Both GRI and IFRS leave the organisation a choice - for following the equity-share, operational control or financial control. ESRS, however, directs organisations to include entities over which it has operational control. 

Scope 2

Again, ESRS requires organisations to follow the operational control approach, rather than the equity-share- and/or financial control approach as prescribed by GRI and IFRS.

Scope 3

The differences lie on how to report on Biogenic CO2 emissions. According to the GRI, an organisation shall report their biogenic emissions of CO2 from combustion or biodegradation of biomass but exclude biogenic emissions of other types of GHG emissions. The ESRS, however, mandates organisations to include the latter. Additionally, IFRS asks for contextual information such as detailed insights into the measurement framework and financed emissions. Next to this, the comment on the preferred consolidation approach per standards counts her as well.

What are greenhouse gas emissions?

The Greenhouse Gas Protocol is among the world’s most used standards for greenhouse gas accounting. This “protocol establishes standardized frameworks to measure and manage greenhouse gas emissions from private and public sector operations, value chains and mitigation actions” (GHG Protocol).

GRI, IFRS and ESRS all refer to the GHG protocol as a basis for their reporting requirements on Scope 1-, Scope 2-, and Scope 3-GHG emissions. But what are these emissions exactly?

• Scope 1: Direct GHG emissions from own operations (facilities and vehicles).
• Scope 2: Indirect GHG emissions from purchased electricity, steam, heating & cooling for own use.
• Scope 3: Indirect GHG emissions in the upstream and downstream value chain.

Addressing the similarities and differences

Organisations in Europe, across different sectors and of various sizes might be overwhelmed by all that is asked of them regarding their sustainability reporting. Especially on their greenhouse gas emissions.

With regards to GHG emissions, it’s highly likely that climate change will be a material topic for your organization. The ESRS is asking for the disclosure of over 200 datapoints on climate mitigation (incl., GHG emissions) and -adaptation. But the good news is: if your organisation already reports according to GRI and/or IFRS, this burden can be more digestible and manageable.

Download our whitepaper to get into the details of the interoperability between ESRS, IFRS and GRI for reporting on your GHG emissions.

How can this help your organisation?

Although the reporting duties following the ESRS might be staggering, an organisation could gain insights other reporting standards it is already compliant with – the GRI and IFRS. Based on this knowledge, an organisation could gain further insights into what it already reports on, what it misses, and how it could achieve interoperability.

Becoming compliant with ESRS is not an easy task, if you need help, please contact us and we are happy to guide you along this journey.  

2Impact helps companies with:

• Double materiality assessments and stakeholder dialogue
• Gap analysis against regulatory requirements, standards and frameworks (B Corp, GRI, CSRD etc.)
• CSRD roadmap, implementation and report development
• GHG baseline and target-setting (including SBTi)
• Measuring circularity
• Human rights due diligence