New GRI standards: a step forward for sustainability reporting

Sustainability reporting is a non-financial reporting process in which a company explains its preventative strategies to mitigate mid-to-long-term risks and provides transparency on its environmental, economical, and socio-ethical actions.

A sustainability report discusses how the business will meet the expectations of its internal and external stakeholders.

Businesses address sustainability issues in their product portfolios, business strategies, and targets to lower or eliminate the negative effects and environmental footprints of their products and business activities for their external stakeholders. Through this reporting procedure, an organisation may move toward a prosperous and sustainable future.

A sustainability report is a document that details the economic, environmental, and social effects of a business or organisation's regular operations. The organisation's principles and governance structure are also presented in the report. It also shows how the organisation's strategy and commitment to a sustainable global economy are related.

Revamped Global Reporting Initiative (GRI) standards are intended to enable better and more reliable sustainability reporting. GRI is the most widely accepted technique for creating sustainability reports and these new standards will be effective from January 2023 for all organisations.

The most important issues dealing with the new standards are how human rights are included, how materiality is recognised, and deepening regulatory duties.

The major objectives of the revisions include implanting compulsory human rights-related disclosures, simplifying approaches for using GRI standards, demonstrating compliance, improving the usability f the GRI standards, encouraging more relevant and comprehensive reporting, providing better clarity on GRI key concepts, reporting principles, driving consistent application, and integrating reporting process with all due diligence.

The Global Reporting Initiative (GRI) has published its first industry-specific standard for the oil and gas sector. In the future, the GRI intends to create roughly 40 sector standards. The following industries will be given priority: forestry, banking, insurance, asset management, utilities, textiles, and clothing.

The new standards, in the view of the experts, are simpler to comprehend and give enterprises that now report in accordance with GRI criteria better instructions.

Some companies are giving top priority during the preparation of sustainability reports by practising these new standards through comprehensive gap analysis.

These new standards are to be practised with all due diligence after the collection of all relevant information as per revised mandatory disclosure requirements.

Given the importance, in the G20 Summit, held on November 15-16 at Bali in the Leaders' declaration, it has been mentioned, "We look forward to the finalisation of standards by the International Sustainability Standards Board in support of globally consistent, comparable and reliable climate-related financial disclosures, and its work beyond climate, and we welcome the efforts to achieve interoperability across disclosure frameworks."

Therefore, a thorough and structured set of sustainability-related reporting standards will support any organisation's progress in preventing a climate catastrophe and addressing other social and political issues, which will help it achieve the agenda of the Sustainable Development Goals.

The author is a banker and the first certified sustainability reporting assurer in Bangladesh.