GRI sees clear alignment with EU’s sustainability standard setting efforts – and is ready to assist
Recommendations for the creation of European sustainability
reporting standards would require large companies in the EU to disclose
their external impacts in a way that meets the needs of multiple
stakeholders while building on the standard setting of global bodies,
such as GRI.
A report published on Monday
by the European Financial Reporting Advisory Group (EFRAG) provides the
European Commission with recommendations on establishing an EU
sustainability reporting framework. A second report proposes reforms to
EFRAG’s governance structure in order to take on a sustainability
standard setting role.
The EFRAG recommendations, many of which closely align with the GRI
Standards, includes that the new sustainability standards should:
- Build on and contribute to the global convergence of public and private sustainability reporting initiatives
- Position sustainability reporting on an equal footing with financial
reporting, introducing connectivity between these two pillars to
improve corporate reporting as a whole
- Adhere to ‘double materiality’, requiring both ‘impact materiality’
(external impacts of the company and its value chain) and ‘financial
materiality’ (sustainability matters that financially affect the
reporting entity)
- Meet the needs of an inclusive range of stakeholders, with standard
setting that is conducted in the public interest and aligns with global
goals, such as the SDGs and Paris Agreement
The recommendations put forward for EU sustainability standards,
if realized, would significantly advance sustainability reporting in
Europe, by requiring the double materiality and multi-stakeholder focus
that is necessary to ensure companies are accountable for their impacts.
We welcome the intent to work with existing sustainability reporting
initiatives and the recognition that sustainability and financial
reporting are of equal importance. GRI looks forward to working with the
Commission and EFRAG, contributing our expertise and unique perspective
from more than 20 years as the global pioneer of sustainability
reporting.”
Eric Hespenheide, Chairman of GRI
The GRI Standards are developed through a multi-stakeholder
process, founded in the public interest and enable companies to provide a
full and balanced picture of their sustainability impacts. As such
there is close alignment between the proposed EU sustainability
standards and those provided by GRI. The GSSB is prepared to have
dialogue with EFRAG on how we can support them in developing an EU
sustainability standard setting framework that improves the consistency
and comparability of disclosed information, while raising the bar for
corporate transparency in Europe and beyond."
Judy Kuszewski, Chair of the Global Sustainability Standards
Board (GSSB), the independent body responsible for setting the GRI
Standards
The European Commission has tasked EFRAG to conduct preparatory work for EU non-financial reporting standards. In January, GRI responded to EFRAG’s consultation on governance changes, setting out how GRI and the GSSB could provide support.
The Commission’s focus on sustainability standards setting is connected to the ongoing review of the EU Non-Financial Reporting Directive.
GRI is also engaging with the IFRS Foundation’s process, which is considering an expanded IFRS role to provide investor-focused sustainability reporting standards.
GRI
© GRI - Global Reporting Initiative
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