GRI 1, 2 and 3: the universal standards

What are the GRI universal standards?

The GRI Standards have three series: universal standards, which apply to every reporter; sector standards for high-impact sectors; and topic standards for specific topics. The universal standards were revised in 2021, mainly to bring in human rights due diligence and a clearer impact-based materiality process, and the revised versions have applied to reports published from 1 January 2023. See the GRI Standards explained and GRI topic standards.

What does GRI 1 Foundation require?

GRI 1 explains key concepts, such as impact, material topics, due diligence and stakeholders, and sets eight reporting principles: accuracy, balance, clarity, comparability, completeness, sustainability context, timeliness and verifiability. To report in accordance with the GRI Standards, a company must meet all nine of its requirements. A company that cannot can report with reference to the GRI Standards, choosing which disclosures to use, but must still publish a content index and a statement of use and notify GRI. A report must not claim more than it does: a with reference report cannot be described as being in accordance.

What does GRI 2 General Disclosures cover?

GRI 2 contains 30 disclosures in five sections, giving context about the company that readers need to understand its impacts.

Many will be familiar to finance teams: the entities included in the report and how they match the financial statements, restatements, external assurance, governance structure and remuneration policies, the annual total compensation ratio, and compliance with laws and regulations. Others come from human rights practice, such as policy commitments, processes to remediate negative impacts, and mechanisms for raising concerns. See ESRS 2 general disclosures, which covers similar ground.

How does GRI 3 Material Topics work?

GRI 3 sets four steps: understand the organisation's context; identify its actual and potential impacts, negative and positive, including on human rights; assess their significance, using severity and likelihood; and prioritise the most significant impacts for reporting. The resulting material topics are reported with three disclosures: 3-1, the process used; 3-2, the list of material topics and changes from the previous period; and 3-3, for each topic, the impacts, policies, actions, effectiveness tracking and stakeholder engagement. Where a sector standard applies, the company must consider the topics it lists and explain any it finds not material. See impact materiality.

GRI universal standards in practice: a logistics company's first report

A logistics company publishing its first report in accordance with the GRI Standards checks each of the nine requirements.

Because it met all nine, the company can state that it reports in accordance with the GRI Standards. Its eight material topics include emissions, road safety, drivers' working conditions and subcontracted labour. From its 2027 report, emissions move to the new GRI 102 Climate Change standard, which it can meet using the same GHG Protocol data it reports under IFRS S2. See GRI and the ISSB.

When can a disclosure be omitted?

A company reporting in accordance can omit a required disclosure, or part of one, only for one of four reasons: it is not applicable, disclosure is legally prohibited, it is subject to specific confidentiality constraints, or the information is unavailable or incomplete. It must state the reason in the content index and, for unavailable information, explain how it will obtain it. Omissions should be the exception: too many weaken the claim to report in accordance, and readers can see them in the index.

How do the universal standards relate to the ESRS and ISSB?

GRI 3's impact materiality is the basis of the impact side of double materiality under the ESRS, and GRI 2 overlaps heavily with ESRS 2, so a company can reuse much of its work, using the GRI and EFRAG interoperability index. The ISSB standards focus on risks and opportunities for investors, so GRI 2 and GRI 3 complement rather than replace IFRS S1's general requirements. See IFRS S1 and double materiality explained.

This guide is general information. It is not tax or legal advice for your situation.