The Global Reporting Initiative (GRI) has released draft versions of two pivotal standards addressing climate change impacts for public comment.
Carol Adams, who chairs the GRI’s Global Sustainability Standards Board (GSSB), said: “The scientific evidence and international consensus is unequivocal that climate change threatens humanity’s well-being and the planet’s health.
“That is why there are growing demands for organisations 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,” she noted.
The consultation comes on the eve of the United Nations COP28 climate change summit and is focused on a new GRI topic standard for climate change and an updated GRI energy standard.
In a statement, the GRI said both expoxure drafts focus on how organisations can effectively reduce their greenhouse gas emissions (GHG) and energy consumption while upholding the principles of a just transition.
They require organisations to set out how their actions align with the Paris Agreement’s central aim of limiting global temperature rises to 1.5°C.
The proposed climate-change standard requires companies to account for the impact of climate change on workers, communities, and vulnerable groups.
Meanwhile, the exposure draft for the revised Energy Standard places a sharp focus on how businesses are actively reducing energy consumption, enhancing energy efficiency, sourcing renewable energy and reducing their carbon footprint.
The release of the two documents comes as the International Sustainability Standards Board (ISSB) and the European Union through the Corporate Sustainability Reporting Directive prepare for a gear-shift in ESG reporting.
A key issue to emerge from these developments has been the question of interoperability or how the various reporting frameworks will complement each other.
Interoperability is generally understood to mean the seamless exchange of data and information between various sustainability reporting frameworks and standards, facilitating better comparability and understanding of ESG performance.
The ISSB aims to enhance interoperability by aligning its standards with existing frameworks such as the Environmental, Social, and Governance Reporting Standard (ESRS), the Task Force on Climate-related Financial Disclosures (TCFD), and the Global Reporting Initiative (GRI).
As a result, organisations can more effectively integrate ESG data into their reports, promoting transparency and consistency in sustainability reporting practices.
Speaking during the ISSB’s 16 November meeting, the board’s chair Emmanuel Faber said more clarity was needed on the definition of interoperability as well as the separate concept of double materiality.
He said the publication of a jurisdictional adoption guide by the end of this year might help to give more clarity on the definition of interoperability.
He agreed, however, that the ISSB must consider providing more precise definitions of interoperability and double materiality in order to reduce “the noise” around these terms.
The public comment period for the two GRI exposure drafts is open until 29 February 2024.
The final standards are expected to be published before the end of 2024. The GRI is also to host two webinars on 28 November.
Separately, Adams told the 21 October meeting of the ISSB that the GRI is continuing to develop and revise its standards to promote sustainable development.
Over the course of the next two years, the GRI plans to focus on:
- developing and revising its standards;
- providing resources to help organisations implement the standards;
- developing a digital taxonomy for efficient and standardised reporting; and
- collaborating with other standard setters.
The GRI is also developing three finance-related standards dealing with banking, capital markets and insurance.
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