Global Reporting Initiative welcomes draft EU Sustainability Reporting Standards

SOURCE: GRI

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May 4, 2022 /3BL Media/ - The publication of the exposure drafts for the new European Sustainability Reporting Standards (ESRS) have been welcomed by GRI, the world’s leading provider of standards on sustainability impacts.

Since July 2021, GRI has worked with the European Financial Reporting Advisory Group (EFRAG) to provide technical input to the development of the ESRS, which are set to become mandatory for 50,000 EU companies from 2023. The draft ESRS enshrines the principle of ‘double-materiality’ – reporting on both the financial considerations of sustainability issues and external impacts of a reporting entity – of which GRI is a strong advocate. 

Eelco van der Enden, GRI CEO, said:

“From the outset, we have strongly backed the moves towards double-materiality disclosure requirements for companies in the EU. As previously recognized by the European Commission, it is crucial that the ESRS builds on the standards already widely used by companies. It is encouraging, therefore, that these drafts signal an important step towards aligning with the GRI Standards. We remain focused on working with EFRAG to strengthen the alignment and help the thousands of GRI reporters to meet the European requirements.   

GRI has also entered into a MoU with the IFRS Foundation, to ensure our respective sustainability-related standards are aligned. To effectively achieve corporate0020transparency, duplication and unnecessary reporting burden must be minimized. This is something that GRI, given our bridging role between the IFRS’ International Sustainability Standards Board and EFRAG, is uniquely placed to help achieve.

Going forward, GRI will continue to collaborate with both EFRAG and the ISSB. Harmonizing these new standards as much as possible with our standards is a prerequisite for building a comprehensive two-pillar corporate reporting system, for sustainability and financial reporting, with each pillar on an equal footing.”

Judy Kuszewski, Chair of the GRI Global Sustainability Standards Bord (GSSB) said:

“I welcome that these draft European standards include explicit recognition of GRI’s position as the global standard setter for addressing impact-materiality, as reflected by the alignment achieved so far on disclosures, guidance and definitions. While more effort is now needed to deepen compatibility, this is a reassuring sign for the many reporting companies and stakeholders in the EU that rely on the GRI Standards.

The consultation on the ESRS is an opportunity to ensure they are refined and further aligned. As a next stage, the GSSB will provide detailed input on the draft standards, and engage with EFRAG’s newly-formed Sustainability Reporting Board and Technical Expert Group.

An added contribution will be a detailed mapping of the GRI Standards against the proposed ESRS, which will help companies understand how they interconnect, and make it easier to determine additional reporting requirements.”

Under the EFRAG-GRI cooperation agreement, the two organizations have joined each other’s technical expert groups and committed to share information, with standard setting activities and timelines aligned as much as possible. This includes joint working on new standards for biodiversity.

In June 2020, EFRAG was mandated by the European Commission to prepare for new EU sustainability reporting standards. The EU Corporate Sustainability Reporting Directive is introducing legislation on sustainability disclosure that will expand and replace the current Non-Financial Reporting Directive.

Research by the Alliance for Corporate Transparency (2020) indicated that 54% of EU companies use the GRI Standards (the most commonly cited framework) to meet their non-financial reporting requirements. 

Global Reporting Initiative (GRI) is the independent, international organization that helps businesses and other organizations take responsibility for their impacts, by providing the global common language to report those impacts. The GRI Standards are developed through a multi-stakeholder process and provided as a free public good.

Tweet me: With exposure drafts of the new EU #SustainabilityReporting Standards now published, @GRi_Secretariat sets out why close alignment with the #GRIstandards is a prerequisite for achieving global corporate transparency https://bit.ly/3MOfR0h

KEYWORDS: EFRAG, CSRD, GRI Standards, global reporting initiative, esg, European Sustainability Reporting Standards, ESRS