Why Were the GRI Standards Updated?
The Global Reporting Initiative (GRI) provides the most widely used sustainability reporting framework in the world. The Universal Standards revision published in 2021, mandatory for reports from January 1, 2023, aims to substantially improve reporting quality and comparability.
The core motivation behind the update is clear: sustainability reporting is evolving from a communications exercise into a strategic accountability mechanism. GRI 1: Foundation 2021 describes this shift as "the integration of human rights and environmental due diligence principles into reporting" (Global Reporting Initiative, "GRI 1: Foundation 2021," 2021, p. 3).
The Three Universal Standards: Structure and Content
The revised Universal Standards comprise three components designed to be used together:
GRI 1: Foundation
Establishes the purpose, key concepts, and reporting principles of the GRI Standards. This standard is the mandatory reference point for every organization reporting under GRI. Its eight reporting principles — accuracy, balance, clarity, comparability, completeness, sustainability context, timeliness, and verifiability — form the quality framework of the report (Global Reporting Initiative, "GRI 1: Foundation 2021," 2021, pp. 8-12).
The most significant innovation in GRI 1 is the placement of human rights due diligence at the center of the reporting process. This approach aligns with the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises.
GRI 2: General Disclosures
Contains disclosures that provide contextual information about the organization itself. GRI 2 defines 30 disclosure requirements across five categories:
- The organization and its reporting practices (GRI 2-1 to 2-5): Organization profile, reporting scope, and external assurance.
- Activities and workers (GRI 2-6 to 2-8): Sector, supply chain, and workforce composition.
- Governance (GRI 2-9 to 2-21): Board structure, remuneration policies, sustainability governance.
- Strategy, policies, and practices (GRI 2-22 to 2-28): Sustainability commitments, policies, and stakeholder engagement approaches.
- Stakeholder engagement (GRI 2-29 to 2-30): Stakeholder identification and collective bargaining coverage.
GRI 2 disclosures create the context necessary for understanding an organization's sustainability performance (Global Reporting Initiative, "GRI 2: General Disclosures 2021," 2021).
GRI 3: Material Topics
GRI 3 defines how the materiality determination process should be conducted and reported. This standard contains one of the most notable innovations of the revised Universal Standards: an impact-focused materiality perspective that approaches the concept of "double materiality."
Under GRI 3, material topics are "topics that represent the organization's most significant impacts on the economy, environment, and people" (Global Reporting Initiative, "GRI 3: Material Topics 2021," 2021, p. 5). Unlike purely financial materiality, this definition foregrounds outward-facing impacts.
Key Differences from the Previous Version
The 2021 revision represents a structural — not cosmetic — change. The principal differences that enterprise reporters need to understand are:
Integration of Human Rights Due Diligence
In the previous standards, human rights were addressed as a standalone topic. In the 2021 version, they have become a foundational component of the entire reporting process. Organizations must now consider the human rights dimension when evaluating every material topic.
Linkage with Sector Standards
GRI has begun publishing Sector Standards. Initially released for oil and gas (GRI 11), coal (GRI 12), and agriculture, aquaculture, and fishing (GRI 13), these standards should be used as starting points in the materiality determination process. Sector Standards present a list of impacts that organizations in the relevant sector are likely to encounter.
Strengthened Governance Disclosures
GRI 2 requires significantly more detailed disclosures on the board's competency in sustainability topics, the link between remuneration and sustainability performance, and impact management processes.
"In Accordance" vs. "With Reference" Reporting
Terminology and requirements have been clarified. The "Core" and "Comprehensive" options have been removed and replaced by two more clearly defined reporting levels.
The Materiality Determination Process: Step by Step
GRI 3 defines the materiality determination process in four stages:
Stage 1: Understand the Organization's Context
Analyze the organization's sectoral position, business relationships, stakeholder landscape, and operating regions. Where available, the relevant GRI Sector Standard should be used as a reference at this stage.
Stage 2: Identify Actual and Potential Impacts
Comprehensively map the organization's actual and potential impacts — both negative and positive — on the economy, environment, and people. Indirect impacts through the supply chain and business relationships are also included in this assessment.
Stage 3: Assess the Significance of Impacts
Rank identified impacts by their severity (scale, scope, irremediable character) and likelihood. For actual negative impacts, only severity is assessed; for potential impacts, severity and likelihood are assessed together.
Stage 4: Prioritize the Most Significant Impacts for Reporting
Based on the assessment results, determine the material topics for reporting and map them to relevant GRI Topic Standards.
Stakeholder engagement is mandatory in this process; however, the final responsibility for materiality decisions rests with the organization itself.
Reporting Options: In Accordance or With Reference?
The current GRI Standards offer two reporting approaches:
Reporting in Accordance
This option represents comprehensive reporting that meets the full requirements of the GRI Standards. Requirements include:
- Compliance with all reporting principles in GRI 1
- Presenting all GRI 2 disclosures (or justifying why any were omitted)
- Conducting a materiality determination process in accordance with GRI 3
- Reporting all disclosures from the relevant GRI Topic Standard for each material topic
- Publishing a GRI Content Index
This is GRI's "gold standard" approach and provides stakeholders with the most comprehensive information.
Reporting with Reference
Organizations can report selected disclosures from the GRI Standards without achieving full compliance. In this case, the report states it has been "prepared with reference to the GRI Standards." This option provides more flexibility but does not permit the claim of being "in accordance" with GRI.
It is common and accepted for organizations reporting under GRI for the first time to begin "with reference" and transition to "in accordance" as their capabilities develop.
Integration with Other Frameworks
The GRI Standards are designed not as an isolated system but for use alongside other reporting frameworks and standards:
Alignment with ESRS
There is a high degree of compatibility between the EU European Sustainability Reporting Standards (ESRS) and GRI. GRI and EFRAG have established cross-referencing between the standards. Organizations already reporting in accordance with GRI will find that they meet a substantial portion of ESRS requirements under the CSRD.
Complementarity with ISSB Standards
While the IFRS Sustainability Disclosures Standards Board (ISSB) focuses on financial materiality, GRI provides impact-focused reporting. Used together, they address both dimensions of double materiality.
Data Sharing with CDP
Significant data overlaps exist between the CDP questionnaire and GRI disclosures. Emissions data, energy consumption, and governance information are requested on both platforms. A coordinated data collection process makes both reporting efforts more efficient.
Practical Considerations for the Transition
Several practical recommendations for enterprise reporters transitioning to the 2021 standards:
- Conduct a gap analysis: Compare your current report against GRI 2021 requirements to identify where additional data or disclosures are needed.
- Revisit your materiality process: Conduct a materiality assessment aligned with the new impact-focused approach.
- Integrate the human rights dimension: Assess human rights impacts for each material topic.
- Monitor Sector Standards: If a GRI Sector Standard has been published for your sector, use it as the starting point for your materiality process.
- Update your Content Index: Prepare a GRI Content Index that reflects the new numbering and structure.
According to the GRI Standards FAQ, the most common challenge organizations face during the transition is redesigning their materiality determination process (Global Reporting Initiative, "GRI Standards FAQ," 2022).
What Comes Next
The GRI Universal Standards 2021 aim to elevate sustainability reporting quality to the next level. For enterprise reporters, this update is more than a technical requirement — it is a strategic opportunity to strengthen accountability to stakeholders.
Action Item: Conduct a gap analysis comparing your current report against GRI 2021 requirements. Prioritize the new requirements in GRI 3's materiality determination process and GRI 2's governance disclosures.