Sustainability reporting: comparing ESRS and GRI standards

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In a context of increasing focus on sustainability, companies are increasingly called upon to report their environmental and social impacts. Two of the most relevant European standards for biodiversity reporting are the ESRS E4 and GRI 101. Both provide guidelines for companies, but differ substantially in terms of applicability, time orientation, and focus on materiality. While GRI 101 focuses on the operational methodology for companies, ESRS E4, part of the Corporate Sustainability Reporting Directive (CSRD), is a regulatory requirement that aims for greater transparency towards external stakeholders. This article explores the main differences between these two standards, focusing on disclosure requirements, future or retrospective orientation of information and the concept of materiality.

One of the main differences between the GRI 101 standard and ESRS E4 concerns their application character. The GRI 101 is voluntary, which means that companies can choose to adopt it to improve transparency on sustainability. In contrast, the ESRS E4 is mandatory for companies that fall under the criteria set by the European Union's Corporate Sustainability Reporting Directive (CSRD), making it a regulatory requirement for many companies operating in Europe. Another distinctive aspect is the target audience. The ESRS E4 is designed for the so-called users, i.e. external stakeholders who read and analyse sustainability statements, such as investors, institutions, non-governmental organisations and civil society.

The ESRS Standard E4 - Biodiversity and Ecosystems therefore requires companies to provide a detailed set of qualitative and quantitative disclosures to ensure greater transparency on the impacts of their activities on biodiversity and ecosystems. In contrast, the GRI Standard 101: Biodiversity 2024 is geared towards the preparers, i.e. the companies themselves, and provides them with guidelines on how to structure sustainability reporting, with a more operational and methodological focus.

This distinction leads to another fundamental difference: the temporal orientation of information. The ESRS E4 takes a forward-looking approach, i.e. it looks ahead, asking companies to report their transition plans for integrating biodiversity into business strategies, describing the actions, resources allocated and targets to be achieved. GRI 101, while including some forward-looking elements, focuses more on a backward-looking analysis, documenting the past and present impacts of society on biodiversity and ecosystems, and the measures taken to mitigate or offset them.

Finally, a crucial aspect concerns the concept of materiality. The GRI 101 adopts the principle of impact materiality, obliging companies to report all effects of their activities on the environment and biodiversity, regardless of the financial consequences. ESRS E4, on the other hand, introduces double materiality, which combines both financial materiality (i.e. the effects of biodiversity on the company, such as operational risks from ecosystem degradation) and impact materiality (the company's effects on biodiversity). If a company determines that biodiversity is material for even one of these two aspects, it is obliged to report it in accordance with the standard ESRS E4.

This article has been realised within the project "Biodiversity services EU expansion" (CUP: E43D22000480009) in the framework of the Lombardy Region's call for tenders "PR FESR 2021-2027 - LINEA INTERNAZIONALIZZAZIONE 21-27", aimed at supporting the internationalisation of Italian companies. 3Bee is the naturetech company that develops innovative technologies for monitoring, protecting and regenerating biodiversity, supporting companies in defining customised climate strategies based on the analysis of their impacts and dependencies on nature. With an established portfolio in Italy, Germany and France and prominent partnerships, 3Bee continues its expansion into international markets to create real impact through technology.