How to Strengthen ESG Reporting with the Updated GRI Standards

In the corporate world, sustainability reporting requirements are continuously increasing through national and international directives. In the EU, the upcoming Corporate Sustainability Reporting Directive (CSRD) will impact the reporting guidelines of a large number of European companies. Beyond legal requirements, the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) have been identified as the most comprehensive and internationally recognized sustainability standards setters for corporate reporting. At the end of 2020, GRI counted more than 38,000 GRI reports from organizations, including 73% of the world's 250 largest companies.

Leveraging Double Materiality to Identify Emerging ESG Risks

If there is one thing that the COVID-19 pandemic has demonstrated, it is that society can face major challenges, virtually overnight. Companies need to have a sharp view on both short-term impacts and risks further on the horizon in order to steer their business and build resilience to deal with change. Capturing emerging risks in the ESG approach is therefore essential. Additionally, as of 2023, the EU Commission requires companies to apply the concept of “Double Materiality” as part of its new Corporate Sustainability Reporting Directive (CSRD). One of the main questions that therefore arises is: how do you ensure your materiality assessment covers these new perspectives on materiality?

A New Way of Sustainability Reporting: CSRD

With the aim of improving the widespread availability and use of sustainability information across different stakeholder groups, the EU Commission announced its proposal for a Corporate Sustainability Reporting Directive (CSRD). The proposed Directive for the coming years will enhance the rules laid down within the Non-Financial Reporting Disclosure (NFRD), as it will extensively widen the scope of companies applicable to these new reporting legislations; from roughly 11,700 to approximately 49,000. Above the increase in the level of detail being required, companies will also have to verify the information being reported through an external assurer, amongst other decrees. As companies are expected to adopt the first set of new standards by 2024, it is crucial to fully understand the implications and their readiness ahead of the implementation date.

Impact of Sharpened ESG Reporting Requirements

Non-financial reporting regulations are evolving at a high pace – especially in Europe. Spurred by the need to redirect finance towards achieving the EU Green Deal and the Paris Agreement, companies will have to become more transparent on their environmental and social impacts, and their strategy to mitigate ESG risks. But before you can ‘talk the walk’, you’ll need to figure out how to walk, and where towards. This article gives a brief overview of the implications of the most important European non-financial reporting requirements for companies operating in Europe, and how to get ready for them.

ESG & Benchmarking

Sustainability Strategy