Consolidation of ESG standards continues with the development of GRI, ISSB and ESRS

June 30, 2023
The ESG App
With the arrival of the final standards of ISSB on June 26, the leading global sustainability standards-setting organizations have published the latest standards for sustainability disclosure by large companies and SMEs worldwide.

With the release of the final standards of ISSB on June 26, the leading global sustainability standards-setting organizations have published the latest standards for sustainability disclosure to be adopted by large companies and SMEs worldwide. Widely consulted across various stakeholder groups, these three publications - the Global Reporting Initiative (GRI), the International Sustainability Standards Board (ISSB) standards, and ESRS issued by EFRAG outline the current sustainability reporting expectations. This is an important milestone in the process to incorporate non-financial information in corporate reporting.

Global Reporting Initiative (GRI) is the most frequently cited global standard in sustainability reporting. The organization was founded in 1997 following the public outcry of the damages caused by the Exxon Valdez oil spill. It issued its first set of guidelines in 2000 and the first standards in 2016. A major update to the standards, published in 2021, came into effect in January 2023. The reporting based on GRI standards is voluntary and it is currently the leading ESG disclosure guidance provider. According to the Sustainable Stock Exchanges Initiative (SSE), 96% of the stock exchanges with written ESG guidances cite the GRI standards.

The GRI standards include Universal standards, Sector-specific standards, and Topical standards. Universal standards are most frequently used by companies today and they provide guidance on disclosure scope, requirements, and the determination of materiality. A set of Topical standards, including tax, waste, emission, anti-corruption, occupational health & safety, supplement the Universal standards and organizations may choose one or more Topics to report following the standards. GRI plans to develop Sector-specific standards for 40 sectors and at the moment, they are available for Oil & Gas, Coal, and Agriculture, Aquaculture & Fishing. The next tier of sector standards for Mining, Financial Services, and Textiles & Apparel are in development. 

Organizations may choose to disclosure either "in accordance" or "in reference" to the GRI standards, each comes with different requirements depending on the scope of disclosure. Disclosure following all three Universal standards is mandatory for organizations to claim that they have sufficiently followed the GRI standards. Increasingly, Sector standards provide disclosure requirements and guidance more specific for each industry sector. 

The International Sustainability Standards Board (ISSB) was created by IFRS Foundation in November 2021. Its formation signals a major step in the consolidation of the fragmented standard-setting bodies in sustainability and ESG.

Formed under the same umbrella organization as the International Accounting Standards Board (IASB), the ISSB wants to provide investors and capital market participants with disclosure standards to support financial decision-making. It stresses coherence and interoperability with accounting standards issued by IASB and focuses on information that is relevant for financial decision-making. The formation of ISSB embodies a number of organizations that previously developed certain guidances and standards, including Integrated Reporting (IR) and the Sustainability Accounting Standards Board (SASB). At the time of its creation, the ISSB announced its intention to integrate the Carbon Disclosure Standards Board (CDSB) and the Value Reporting Foundation (VRF). These integration efforts were completed in January and August of 2022. After the publication of the S1 and S2 standards, ISSB announced that it will take over the monitoring responsibilities of TCFD starting 2024.

Figure: Consolidation of sustainability standards organizations (updated July 2023)


The EU Sustainability Reporting Standards (ESRS) is drafted by the European Financial Reporting Group (EFRAG) as a set of supplementary tools for disclosure regulations in the corporate and financial services sectors developed to support the overarching European Green Deal. The Corporate Sustainability Reporting Initiative (CSRD), adopted by the European Parliament in November 2022, envisions the implementation of sustainability reporting standards that will guide corporations on required sustainability disclosure. The CSRD also makes it mandatory for companies to have an audit of the sustainability information that they report and it provides for the digitalization of sustainability information.

EU law requires all large and listed companies (estimated to be about 50,000 companies) operating in the EU to disclose information on the risks and opportunities arising from social and environmental issues and the impact of their activities. The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025. It is expected that the final ESRS will be finalized as delegated acts and submitted to the European Parliament in Q2 or Q3 of 2023.

Updated on July 12, 2023.

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