Exhibiting transparency and accountability of the companies, and being integrated into different regulations, GRI standards are an important part of the corporate world. They provide a structured framework for organisations for Environmental, Social and Governance (ESG) performance
- measurement
- management
- reporting
Companies adopt the same to demonstrate their commitment to sustainable practices. They align operations with global standards. They also enhance stakeholder confidence. Let’s learn about GRI metrics that organisations should track and report to showcase their proactive approach to sustainability.
What is the Global Reporting Initiative?
GRI or the Global Reporting Initiative was founded in Boston in 1997 to ensure transparency and ease in understanding the impact organisations make on the world. It also indicates the measures that organisations take in handling their impact. While submitting the GRI report is voluntary for organisations, the disclosure helps earn investor, regulator, and stakeholders’ trust.
GRI reporting also helps communicate the business values and meet the rising stakeholder expectations. It is valid for private or public and every level of organisation, from small to enterprise level.
Components of the GRI Report
The GRI standards provide a globally recognised framework. This framework guides companies in their sustainability performance. These standards outline the GRI metrics that organisations must track to ensure accountability in their ESG practices.
GRI standards are divided into three categories:
- Universal Standards: These form the foundation of all GRI reporting and are applicable to every organisation. They establish the core principles, structure and requirements for sustainability disclosure. They include:
- GRI 1: Foundation 2021 states how to use the GRI Standards. It sets the requirements for reporting.
- GRI 2: General Disclosures 2021 covers aspects like organisational details, governance and structure, strategy and policies, stakeholder engagement and reporting practices.
- GRI 3: Material Topics 2021 helps companies to identify and manage significant sustainability issues
- Sector Standards: These provide sector-specific guidance. They highlight the sustainability issues most relevant to a particular industry. For instance, it will deal with energy use in manufacturing, biodiversity impact in agriculture, and other such issues in textiles, oil and gas and other industries.
- Topic Standards: These outline specific metrics and disclosures for individual sustainability topics and represent the core of sustainability performance reporting. The selection of topics here is based on their identified material topics. The different topics covered here include water, energy, waste and others.
Important GRI Metrics for Sustainability Report
The GRI Standards state the metrics that organisations must track in order to maintain transparent and well-structured sustainability reporting. These metrics span ESG aspects.
Environmental Topics
Environmental disclosures help organisations measure and exhibit their environmental impact while demonstrating commitment to global sustainability standards. The different GRI metrics to be considered in this include:
- GRI 302: Energy consumption and efficiency initiatives
- GRI 303: Water and effluents management
- GRI 305: Emissions (Scope 1, 2 and 3)
- GRI 306: Waste management and reduction strategies
- GRI 307: Environmental compliance and adherence to regulations
Social Topics
These GRI social metrics assess how organisations impact their workforce and communities. They emphasise human rights, equality and safe working conditions. The key GRI metrics in social topics include:
- GRI 401: Employment practices
- GRI 403: Occupational health and safety
- GRI 404: Training and education
- GRI 405: Diversity and equal opportunity
- GRI 408: Child labour prevention
- Additional areas: Human rights, community development and customer privacy
Governance Topics
Governance metrics ensure ethical conduct, regulatory compliance and accountability across business operations. The disclosures here deal with how organisations maintain integrity, transparency and fairness in their governance structure and stakeholder interactions. The important GRI metrics include:
- GRI 205: Anti-corruption measures
- GRI 206: Anti-competitive behaviour monitoring
- GRI 419: Socioeconomic compliance
Integrating GRI Metrics into Daily Operations
GRI reporting does not need to be a hectic process by being performed separately at a specific time period. Rather, incorporating into daily operations can do the needful. Here is how to achieve the same:
- Integrate technology infrastructure such as HR, ERP and supply chain with ESG KPIs. It eases and automates the data collection and monitoring process to ensure accurate performance measurement.
- Use sustainability data for decision making with respect to business planning, product development and risk assessments. It helps align operational actions with sustainability goals.
- Designate department heads or ESG-focused cross-functional teams to oversee and manage the material topic. It clarifies accountability. It also improves data quality. Further, it allows consistent management of sustainability issues.
- Incorporate GRI-based sustainability objectives into procurement practices, governance and employee engagement policies. It strengthens corporate culture as well as aligns internal processes with global sustainability standards.
Summarising
Tracking key GRI metrics and embedding them into daily business operations helps organisations ensure sustainability. It allows them to exhibit their values, earn stakeholders’ trust and contribute positively to the environment. The key GRI metrics for the sustainability report are part of the topic standards. These metrics can be collected and monitored in daily operations to ease the process during periodic review and report submission.
