GRI,IIB, SASB GRI,IIRC and SASB Framework confusion. Is more synergy and clarification required?


GRI,IIB, SASB GRI,IIRC and SASB Framework confusion. Is more synergy and clarification required? Coralie Ponsinet discovers.

There is certainly a degree of confusion ‘on the ground’ about the Global Reporting Initiative (GRI), International, Integrated Reporting Council (IIRC) and Sustainability Accounting Standards Board (SASB) frameworks. This is our experience when supporting clients on non-financial reporting, it is so confusing  that it leads to some companies  simply retreating from them all.

That said, direct comparisons between IIRC, SASB and GRI are perhaps a little unfair as they are intended to provide guidelines for different purposes. IIRC and SASB are both aimed squarely at how companies communicate with their investors, providing guidance on how non-financial information should be incorporated in annual reports and US mandatory filings, respectively.

 The prospect of integrated reporting, as now formalised by IIRC  (IR) guidelines, has been held up as the ‘holy grail’ by many commentators. However, it is not yet clear if integrated reports serve the same function as, or will therefore replace, the dedicated CSR or sustainability reports that have become commonplace for many large companies. Since these are typically aimed at a much broader stakeholder audience, I can personally envisage a situation where companies produce an integrated report (in place of an annual report) for investors but continue to produce a separate CSR/sustainability report for other stakeholders.

This is where the GRI comes in. Taking into account the interests of all stakeholders (i.e. group or individual who can affect or is affected by a company’s operations, it provides guidelines for how companies can report non-financial information in a standard and, hence, comparable way. With G4, the requirement to establish material issues means that the GRI guidelines no longer simply cover the contents of a report itself, but also the way in which those contents are defined. This adds a new preliminary step to the reporting process, which requires organisations to engage with their stakeholders in order to understand which sustainability issues matter most.

Everybody seems to agree that this focus on materiality provides a robust approach, leading to more relevant reporting but again there is confusion around the different definitions of materiality by GRI, IIRC and SASB. Again, this stems from these frameworks’ different target audiences. IIRC and SASB use the more “traditional” meaning of materiality (evolved as it is from the financial accounting world), referring to the threshold above which an issue is determined to be sufficiently significant to be included in financial reporting. On the other hand, GRI encourages companies to identify and focus their reporting on those (non-financial) issues that matter most both to the company and to its stakeholders.

However, having different audiences does not mean that better harmonisation between the frameworks is not needed.  Each of them have aspects that might benefit the others. For instance, SASB believe that standard material issues can be established for different sectors. The identification of standard material issues on which all companies in a given sector should report – to be supplemented by additional and company-specific material issues as identified through a materiality assessment – might be seen as an improvement to the ‘blank canvas’ approach advocated by GRI, which can be interpreted as giving companies complete freedom to report on what they want.

With the European Commission recently adopting a new directive on the disclosure of non-financial information, impacting an estimated 6,000 ‘large’ companies across Europe, this would seem to be the ideal time for the three organisations to come together and agree areas of common ground and better explain reasons for differences. That way, the many companies who are having to approach non-financial reporting for the first time will have a much clearer idea of where to start.

Visit the IMS Consulting (Europe) website to download our guide to navigating GRI G4 guidelines


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