Explainer: The Global Reporting Initiative – what investors, board directors, accountants, auditors and regulators need to know

By Carol A Adams

Main points:

  • Highlights the benefits of the Global Reporting Initiative (GRI) Standards issued by the Global Sustainability Standards Board (GSSB) to board directors, investors, accountants and regulators.
  • 20+ year history and used by over 10,000 organisations world-wide.
  • Introduces governance structure and reasons for their popularity.

The Global Reporting Initiative’s (GRI) sustainability reporting Standards are used by most of the world’s largest companies and over 10,000 organisations world-wide (see KPMG, 2020 p25). They allow companies to demonstrate accountability for their impacts on economies, the environment and people. Their popularity stems from recognition that the success of companies depends on stakeholder support, being trusted and getting a heads up of likely problems down the track. The globalisation of business that occurred in the latter half of last century and the pollution and exploitation of lesser developed countries, labour rights and human rights that followed made this accountability a must have. This need is reinforced by almost daily press reports of corporate wrong doing.

The GRI has a track record spanning over twenty years. It was founded in the late 1990s and issued its first set of guidelines in 2000. In 2016 the fourth set of guidelines (G4) were transitioned into Standards. A substantial revision was undertaken in 2021. The 2021 update brought enhanced governance disclosures, stronger guidance on materiality to enhance consistency and comparability and an increased focus on human rights. 2021 also saw the announcement that GRI is co-constructing sustainability reporting standards for the European Corporate Sustainability Reporting Directive (CSRD) with the European Financial Reporting Advisory Group (EFRAG). The CSRD will apply to approximately 50,000 companies.

GRI’s governance structure

The transition to Standards in 2016 saw a revised governance structure modelled on financial reporting standard setters, but with multi-stakeholder input reflecting broad stakeholder interest in sustainability reporting. The Global Sustainability Standards Board (GSSB) replaced a technical working group. A Due Process Oversight Committee and Independent Appointments Committee were formed.

The GSSB has sole responsibility for setting the Standards – there’s a ‘firewall’ between it, the GRI Board, the 50 strong GRI Stakeholder Council and funding sources. The governance bodies and working groups are multi-stakeholder and have global representation. Together with GRI’s presence across the world, this facilitates the global relevance of the Standards.

Standards issued by the GSSB

There are three ‘Universal Standards’ that apply to all organisations.

GRI 1 sets out the reporting principles that must be followed. The principles of accuracy, balance, clarity, comparability, completeness, timeliness and verifiability will be familiar to accountants. The principle of ‘sustainability context’ requires that the organization reports “information about its impacts in the wider context of sustainable development”. This involves:  considering the ability of future generations to meet their needs; drawing on scientific consensus on the limitations of environmental resources; reporting in relation to the UN Sustainable Development Goals (SDGs); and, considering societal expectations.

GRI 2 sets out required disclosures about the entity, its activities, governance structure, strategy and policies with respect to sustainable development and approach to stakeholder engagement.

GRI 3 sets out the process for determining and managing material topics – those where it has the most significant impacts on the economy, environment and people.

The sector guidance that accompanied G4 are being replaced with 40 sector standards, the first one for the oil and gas sector. These sector standards help organisations identify their material topics and the 30+ topic standards tell organisations what to report on matters ranging from tax, economic performance, emissions, energy to diversity and equal opportunities.

There is flexibility in where information is disclosed – there is no requirement to develop a separate report for all the information. A content index records the location of each required disclosure for ease of reference.

Key points for stakeholders to note are set out below.

Board Directors

The requirement to disclose processes for engaging stakeholders and determining and managing material topics often enhances management’s due diligence. Engaging with stakeholders and identifying what matters to them builds trust. The requirement to provide a statement about the relevance of sustainable development to the organisation and its strategy facilitates the consideration of risks and opportunities in strategy development. External assurance (under the purview of audit and risk committees) can provide additional confidence and with appropriate governance oversight the organisation is well placed to thrive amidst the increasing complexity that sustainable development challenges bring.


The impacts of organisations on the economy, environment and people often have financial consequences, sometimes through reputational damage, operational risks, or strategic opportunities. In many cases it is almost impossible to know when, how or how much the financial consequences to a business will be. Consequently, investors are interested in the processes organisations use to identify stakeholder interests and material impacts, prevent, and mitigate them along with governance oversight thereof. GRI Standards provide credibility and context for additional financial disclosures for capital markets.

Accountants and auditors

Accountants have valuable knowledge and experience to guide their organisations in developing appropriate data protocols, internal controls, the scope for external assurance engagements and the selection of assurance providers (see GRI 1).

There is increasing demand for external assurance of sustainability reporting. As it is increasingly mandated in some jurisdictions for some organisations, demand will increase even where not mandated.


Voluntary reporting of the impacts of organisations on the economy, environment and people has been fraught with greenwash and researchers have long called for mandatory reporting. The governance structure of the GRI was designed to facilitate adoption of the GRI Standards by legislators. The Standards are aligned with authoritative intergovernmental instruments on the conduct of business and on human rights. Their use aids national governments in tracking their contribution to sustainable development and fulfilling their commitments to the UN SDGs. (See CIPFA, 2021 re the importance of reporting on impacts to the public sector.)

You might be interested in the ICAS hosted discussion on sustainability reporting with Sir David Tweedie and Professor Mervyn King.


CIPFA (2021) Evolving climate accountability: A global review of public sector environmental reporting

KPMG (2020) The time has come: The KPMG survey of sustainability reporting 2020

Carol Adams served as member of the GRI Stakeholder Council during 2013-2019 and Chair for the final two years. The views expressed are her own.

Share this article


  1. An excellent overview. Thank you

Speak Your Mind


Enter your email address to receive the latest posts