Joint Statement on Sustainable Reporting Standards
Global Reporting Initiative (GRI) and International Financial Reporting Standards Foundation (IFRS) have issued a joint statement on sustainable reporting standards, aiming to improve the interoperability between GRI standards and ISSB standards and establish a global sustainable reporting system.
The GRI standards are developed by the Global Sustainability Standards Board (GSSB), while the ISSB standards are developed by the International Sustainability Standards Board (ISSB).
Related Post: Interoperability between ISSB Standards, ESRS, and GRI Standards
Background of Joint Statement on Sustainable Reporting Standards
In recent years, regulatory agencies and industry organizations in various jurisdictions have introduced a series of sustainability reporting standards, which pose significant compliance burdens on corporate sustainability disclosure and challenge investors in obtaining consistent sustainability information. Stakeholders such as enterprises and investors require a more efficient, coordinated, and globally applicable sustainability reporting standard.
In 2022, the Global Reporting Initiative signed a memorandum of understanding with the International Financial Reporting Standards Foundation to begin collaborating on the development of sustainable reporting standards. In May 2024, both parties issued a statement committing to improving consistency in information disclosure. The joint statement on sustainable reporting standards released this time summarizes the latest work of both parties.
Difference between GRI Standards and ISSB Standards
The GRI standard adopts the principle of double materiality, requiring companies to disclose their material impact on the economy and environment, as well as the impact of the economy and environment on the company itself. The audience of GRI standards includes a wide range of stakeholders such as investors, consumers, and communities, who can obtain comprehensive information on the sustainable impact of enterprises.
The ISSB standard adopts the principle of financial materiality, requiring companies to disclose sustainable risks and opportunities that may reasonably be expected to affect the company’s development prospects, as well as cash flows, financing channels, and funding costs in the short, medium, and long term. The target audience of ISSB standards is mainly investors and capital market participants, who can use this information to make investment decisions.
However, not all information needs of investors can be obtained through ISSB standards. For example, some influential investors who want to understand the impact of a company’s business activities on the economy and environment need to obtain information disclosed by the company based on GRI standards.
Collaboration between GRI Standards and ISSB Standards
The GRI and IFRS Foundation plan to strengthen joint disclosure. For example, when a company discloses greenhouse gas emissions information based on IFRS S2 and uses the GHG Protocol for measurement, it can be considered to meet the disclosure requirements of GRI102. In this case, the company does not need to establish two sets of greenhouse gas accounting systems.
The future cooperations between GRI standards and ISSB standards include:
- Nature Information Disclosure Standards: The ISSB is developing natural information disclosure standards, and in the future, both parties will draw on the interoperability work of the Taskforce on Nature-related Financial Disclosures (TNFD) and the Global Reporting Initiative to improve the consistency of natural information disclosures.
- Industry standards: GSSB is developing GRI industry standards, and the ISSB committee is revising Sustainability Accounting Standards Board (SASB) Standards. Both parties plan to cooperate to reduce industry disclosure redundancy.
Reference:
GRI and IFRS Foundation Reaffirm Commitment to Complementary Disclosures
