Sustainability reporting: GRI, SASB and ESRS indicators

The sustainability reporting, following the New CSRD Directive, is gradually becoming more and more a part of ordinary reporting. For accurate and transparent reporting, there is therefore a need for companies to rely on specific standards that offer detailed guidelines on content, organisation, goal setting, performance indicators, and methods of impact assessment. The company can choose the standard that best suits its needs and the expectations of stakeholders. Some organisations even adopt more than one standard to ensure greater coverage and transparency in reporting. But what are the most important international standards in use for non-financial reporting?

The Global Reporting Initiative is an international non-profit organisation founded in 1997 with the aim of promoting sustainability reporting. In 2016, GRI published guidelines and indicators to help organisations of all sizes, sectors and countries consistently and comprehensively report on their environmental, social and governance performance. The GRI Standards are divided into three categories: universal standards, sectoral standards and thematic standards. Universal standards apply to all organisations preparing a sustainability report; sectoral standards - currently 40 - enable specific and consistent reporting of the impacts of the sector in which the company operates; while thematic standards address economic impacts, environmental impacts on land, air, water and ecosystems, and impacts on society. GRI standards are the most widely used: among large companies, four out of five use them.

The SASB indicators are a set of standardised indicators that one can use to communicate one's sustainability performance according to the specific sector. Indeed, the SASB, i.e. The Sustainability Accounting Standards Board, is a non-profit organisation founded in 2011 with the aim of developing and disseminating industry-specific reporting standards that companies can use to communicate relevant information to investors. The SASBs published in 2022, are diverse and specific to 77 industry sectors and are designed to enable companies around the world to identify, manage and communicate financially relevant sustainability information to investors. All SASB Indicators are developed through a process of public consultation and stakeholder engagement and are updated periodically to reflect developments in sustainability.

Compared to the GRI and SASB indicators - which are decidedly more global in scope - the ESRS reporting standards, developed by the EFRAG, are specifically aimed at European companies and are aligned with the EU principles on sustainability. In itself, EFRAG is a technical body that is responsible for developing financial reporting standards and endorsing accounting standards at the international level. However, in 2021, EFRAG launched its own programme for the development of non-financial reporting standards, called EFRAG ESRS (European Sustainability Reporting Standards). The ESRS standards cover a wide range of topics, including climate change, biodiversity and more. These indicators set both requirements and rules for reporting by companies and organisations on sustainability impacts, opportunities and, above all, risks. These standards are currently in draft form.

But the existing standards are not only GRI, SASB and ESRS. In fact, there are also other reporting methods, for example the ISO standards. The International Organisation for Standardisation has in fact developed a class of standards, the ISO 14000, that relate to the environment. There are various declinations of these, including ISO 14001 on environmental management systems or even ISO 14040 on LCA studies and so on. So where does a company's decision on which standards to adopt come from? Certainly from an assessment of the reference sector, the geographical area and its own material issues. It is important to remember that ISO and GRI are two of the most established standards, but both do not consider the financial aspects of companies. In contrast, SASB standards help communicate financial risks and opportunities related to sustainability and encourage companies to integrate sustainability into their financial reporting.

GRI 304 defines reporting requirements on biodiversity. It provides a requirement and four specific disclosures on biodiversity impacts that help understand how the company is managing biodiversity and what measures it is taking to protect natural habitats. The disclosures cover the company's management approach towards biodiversity, the identification of protected or high biodiversity value areas involved in company activities, the direct and indirect impacts of company activities on biodiversity, the size and locations of protected or restored habitat areas, details on the effectiveness of measures taken and the number of threatened species involved in company activities. GRI 304 is currently being revised to align with the Global Biodiversity Framework and the mitigation hierarchy, to ensure greater transparency and accountability in managing impacts.

What are the most important standards in use for non-financial reporting? How can companies understand which standards are most suitable for them? What are the most important standards for biodiversity? To answer these questions, and more, we launched the project Pillole dall'Oasi: la Digital Academy by 3Bee for Sustainability Professionals, realised in collaboration with Neutralia and Italian Tech Academy. A course composed of 12 modules dedicated to training on topics related to business sustainability, with the involvement of 23 experts from the world of research, innovation, business and finance. An opportunity not only for training, but to join an exclusive community to receive monthly updates on news from the world of sustainability. Do you want to make your commitment to protecting the environment tangible and ensure the best training for your employees?