CSRD and GRI: how do these standards coexist?
Summary
The Corporate Sustainability Reporting Directive and Global Reporting Initiative standards are redefining sustainability reporting on a European and global scale. The CSRD, an EU directive, imposes legal ESG reporting obligations on European companies, while the GRI, a voluntary initiative, offers global standards for measuring the impact of companies on sustainability. Although they share transparency and quality objectives, the CSRD is legally binding and specific to the EU, whereas the GRI is universal and flexible.
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Introduction
The CSRD and GRI standards are two major standards that are redefining the landscape of sustainability reporting for companies at European and global level. While the CSRD imposes new legislative obligations on companies operating in the EU, the GRI provides a voluntary framework that is adopted globally.
In this article, learn how these standards coexist and what benefits organizations can derive from them.
CSRD and GRI standards
Overview of the CSRD Standard
The Corporate Sustainability Reporting Directive (CSRD) is a European Union standard that expands corporate sustainability reporting obligations beyond what was stipulated in the previous NFRD Directive. It aims to provide reliable and comparable sustainability information to stakeholders, while encouraging companies to consider their environmental and social impact as part of their overall strategy.
The CSRD aligns with the European Green Deal and the UN Sustainable Development Goals, aiming for a more sustainable and inclusive economy. It applies to large companies, including non-European companies operating significantly in the EU, and requires detailed reporting on ESG issues. The CSRD pushes European and international companies towards greater transparency and accountability in terms of sustainability.
Overview of the GRI Standard
The Global Reporting Initiative (GRI), established in 1997, provides comprehensive guidelines for companies and organizations of all sizes to measure their impact on key sustainability issues, such as climate, human rights and corruption. The goal of the GRI is to provide universal standards that make sustainability reporting transparent and comparable globally. GRI standards are based on the principles of relevance, comparability, accuracy, and consistency.
These standards use performance indicators covering economic, environmental and social aspects to help organizations accurately communicate their impact on sustainability. The GRI encourages companies to focus on the most significant issues, enabling reporting that reflects real sustainability challenges and responses to those challenges. The GRI is thus proving to be a fundamental tool for transparent and accountable disclosure of sustainability performance on an international scale.
What are the differences and similarities between these standards?
Similarities between CSRD and GRI:
The common goal of transparency and improving the quality of sustainability reporting:
Both the CSRD and the GRI aim to increase corporate transparency in terms of sustainability. They encourage the disclosure of environmental, social and governance (ESG) information that is crucial for stakeholders.
Both standards recognise the importance of providing investors, consumers and civil society with comparable and reliable data on companies' sustainability performance.
These standards emphasize the need to report material information, i.e., information that reflects the significant economic, environmental, and social impacts of the business.
Key Differences Between CSRD and GRI:
The CSRD is a European Union directive that requires legal compliance from the companies involved, while the GRI is a voluntary global initiative.
The GRI offers a comprehensive set of standards applicable to all organizations, regardless of where they operate, with a focus on creating universal standards. The CSRD, on the other hand, is specifically designed for companies operating within the EU, taking into account the EU's regulatory framework and specific sustainability objectives.
Reports developed according to GRI standards are often more detailed in that they cover a wide range of ESG metrics.
The CSRD takes a more formal approach, with specific requirements for the form and content of reports. GRI, on the other hand, offers greater flexibility, allowing companies to adapt to standards according to their context.
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The CSRD and GRI standards redefine sustainability reporting at European and global level.
How can companies navigate between the two standards?
Navigating between these standards may seem complex, but with a strategic approach, companies can effectively reconcile these different reporting frameworks.
As a first step, companies should assess where their current reporting practices stack up against CSRD and GRI requirements. This involves a comparative analysis to identify the gaps that need to be filled.
Since the CSRD is specific to the EU, companies that operate internationally must adapt their reporting according to regional nuances while remaining true to the universal principles of the GRI.
In addition, organizations can create a common framework that synthesizes the requirements of the two standards. This may involve the creation of correlation tables or internal guides that illustrate how each element of the GRI relates to or can be supplemented by the requirements of the CSRD.
Finally, the use of specialized software and tools, such as D-Carbonize, can automate the collection of ESG data, making it easier to manage information in accordance with both sets of standards.
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The benefits of the coexistence of CSRD and GRI
The coexistence of these two sustainability reporting standards offers a unique opportunity for companies to strengthen their sustainability communication:
By adhering to both the European CSRD Directive and the GRI Global Standards, companies demonstrate their commitment to full transparency, which can build stakeholder trust.
The use of two recognized frameworks makes it easier for sustainability data to be comparable to that of other organizations.
By integrating impact-oriented GRI standards with performance-based CSRD, companies can present a complete picture of their environmental, social, and governance impact and performance.
The CSRD takes into account the regulatory context and the specific expectations of the EU, while the GRI allows for a comprehensive approach. This duality allows companies to remain relevant both locally and internationally.
Stakeholder diversity: By combining standards, companies can address a wider range of stakeholders, each with different expectations in terms of sustainability reporting.
By complying with two sets of reporting standards, companies can position themselves as leaders in the field of sustainability.
Companies must adopt a strategy that adheres to the stringent regulatory requirements of the CSRD while embracing the universality of the GRI principles.
To help them meet these standards, they can use dedicated software such as the carbon footprint calculation software from D-Carbonize. The convergence of these standards leads to comprehensive reporting practices that benefit not only the companies themselves, but also all their stakeholders.
