In response to growing market demand, GRI and IFRS collaborate to enhance sustainability reporting
The Global Reporting Initiative (GRI) and the International Financial Reporting Standards (IFRS) Foundation have announced a significant partnership to deliver full interoperability in sustainability reporting.
This collaboration is designed to optimize how GRI and ISSB (International Sustainability Standards Board) Standards can be used together, meeting the diverse information needs of both investors and a broader range of stakeholders.
GRI and IFRS: Deepening the Relationship
The GRI and IFRS Foundation are enhancing their working relationship, which began with a Memorandum of Understanding signed in 2022. This strategic collaboration aims to create a seamless, global, and comprehensive sustainability reporting system.
Such a system will help companies effectively report on their impacts, risks, and opportunities, including those risks arising from the organizations’ impacts.
Key Components of the Collaboration
The ISSB and the Global Sustainability Standards Board (GSSB) have committed to jointly identifying and aligning common disclosures. These disclosures will address information needs under the distinct scopes and purposes of their respective standards.
This includes both thematic and sector-based standard-setting. One of the initial outcomes of this collaboration will be a methodology pilot, which will build on the newly published GRI 101 Biodiversity Standard and the ISSB’s upcoming project on Biodiversity, Ecosystems, and Ecosystem Services.
Separate Yet Aligned Decision-Making Processes
Despite their collaboration, the ISSB and GSSB will continue to make decisions independently, following their established standard-setting due processes. This includes public consultation regarding any proposed amendments to their standards to ensure alignment of common disclosures.
Statements from Key Leaders
Erkki Liikanen, Chair of the IFRS Foundation Trustees, emphasized the importance of this collaboration, stating,
“The IFRS Foundation Trustees believe today’s agreement solidifies and advances the MoU so that together we can reduce duplication, fragmentation, and complexity in the sustainability disclosure landscape.”
Eelco van der Enden, CEO of GRI, echoed this sentiment, highlighting the goal of increasing transparency through consistent and clear sustainability reporting.
“Our collaboration with the IFRS Foundation has been built on a desire to ensure that GRI and ISSB standards can be used seamlessly together so that sustainability reporting is streamlined and robust.”
Carol Adams, Chair of the GSSB, noted the commitment to enhancing disclosures on significant impacts and sustainability-related risks. She stated,
“This new agreement recognizes our commitment to enhancing disclosures on an organization’s most significant impacts, as well as their sustainability-related risks and opportunities.”
Emmanuel Faber, ISSB Chair, remarked on the future focus areas, including nature and human capital.
“Through this collaboration, companies that wish to apply both the ISSB and GRI Standards to facilitate reporting to a broader range of stakeholders will be able to do so in a seamless way.”
The Path Forward
The collaboration between GRI and IFRS Foundation marks a critical step towards achieving a fully aligned global standards system for sustainability reporting. As the ISSB continues to focus on meeting the information needs of investors regarding sustainability-related risks and opportunities, the GSSB will prioritize addressing the needs of a broad range of stakeholders concerning organizations’ most significant impacts.
This partnership not only aims to streamline sustainability reporting but also seeks to foster closer integration in standard-setting while maintaining distinct yet complementary positions within the global corporate reporting landscape. By building momentum through initial projects like the biodiversity pilot, GRI and IFRS are paving the way for a unified and effective approach to sustainability reporting that benefits all stakeholders.
Moving Towards a Unified Reporting Framework
The collaboration between GRI and the IFRS Foundation signifies a major advancement in the field of sustainability reporting. By working together to align their standards, they are addressing the growing market demand for comprehensive, transparent, and consistent sustainability disclosures. This partnership is a testament to their commitment to reducing complexity and fragmentation in the sustainability disclosure landscape, ultimately benefiting organizations, investors, and stakeholders worldwide.
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