The Global Reporting Initiative (GRI), one of the leading organizations promoting standardized Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More reporting, announced today the publication today of new draft Climate Change and Energy Standards, aimed at enabling companies to disclose their climate change transition plans and actions, and on their climate-related energy transition initiatives.
GRI Sustainability Reporting Standards are one of the most commonly accepted global standards for sustainability reporting by companies, developed to enable consistent reporting across companies and industries, providing clearer communication to stakeholders regarding sustainability matters. The standards are available for reporting across a wide range of ESG-related topics, ranging from anti-corruption practices to biodiversity and emissions. The GRI published a major update of the standards in 2021, and has announced agreements to align its standards with the European Sustainability Reporting Standards (ESRS) and the IFRS Foundation’s new sustainability reporting standards.
According to the GRI, the new proposed standards are being launched in response to emerging disclosure expectations on climate change, with the exposure drafts focusing on how organizations can cut their greenhouse gas emissions and reduce energy consumption, in ways that support just transition principles. The GRI added that the new standards explicitly ask organizations to explain how their actions relate to the Paris Agreement’s ambition to limit global temperature rises to 1.5°C.
The proposed climate change standard includes a series of new disclosures, including reporting on reporting on transition plans for climate change mitigation, climate change adaptation, emission reduction targets and progress, as well as disclosures on GHG removal within organizations’ value chains and on the use of carbon credits.
The climate change standard also includes new disclosures on the Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. More aspect of climate change, with a section dedicated to just transition metrics, with an emphasis on accountability for impacts on workers, communities and vulnerable groups, with reporting metrics including the number of jobs created, eliminated, and redeployed due to the transition plan, the number of employees that received training for up- and reskilling and the locations where the organization’s transition plan has impacts on local communities and Indigenous Peoples.
The new Energy Standard focuses on ways in which organizations are reducing their energy consumption, achieving energy efficiency and sourcing renewable energy, and incudes a new breakdown of significant energy consumption in the value chain by both upstream and downstream Scope 3 categories, as well as disclosure on energy target setting, with reporting on the role of energy policy and commitments in the transition to a decarbonized economy.
In order to achieve alignment with other sustainability reporting initiatives, the GRI said that cooperation and review of the drafts have taken place with EFRAG, responsible for the development of the ESRS, the IFRS Foundation’s International Sustainability Standards Board (ISSB) and some national standard setters.
Carol Adams, Chair of the Global Sustainability Standards Board (GSSB), the independent body that sets the GRI Standards, said:
“The scientific evidence and international consensus is unequivocal: climate change threatens humanity’s well-being and the planet’s health. That is why there are growing demands for organizations to provide in-depth information about how they are reducing GHG emissions, taking concrete steps to mitigate and adapt to climate change – and how their actions impact on people and the environment.”
The GRI has launched a consultation on the new drafts, running through February 2024. Click here to access the consultation and to the new climate change and energy standards.