GRI 1: Foundation 2021 – Sustainability Reporting Standard

Introduction

GRI 1: Foundation 2021 is the starting point for organizations using the GRI Sustainability Reporting Standards. Issued by the Global Sustainability Standards Board, it explains the purpose and overall system of the GRI Standards and establishes the concepts, requirements, and reporting principles organizations need to understand when preparing sustainability information in accordance with GRI.

The GRI Standards are designed to help organizations publicly report their most significant impacts on the economy, environment and people, including impacts on human rights. This impact-focused approach is central to GRI sustainability reporting and is intended to improve transparency and accountability around an organisation’s contribution to sustainable development.

GRI 1 introduces four important concepts that underpin this approach: impact, material topics, due diligence and stakeholders. Material topics are those that represent an organisation’s most significant impacts on the economy, environment and people. Identifying these topics determines which sustainability issues should receive priority in GRI reporting.

GRI 1 also clarifies that the GRI Standards do not establish targets, thresholds or benchmarks for determining whether an organization’s sustainability performance is good or bad. Instead, they establish a system for identifying significant impacts and reporting information about them consistently and credibly.

Structure or Components

The GRI Standards operate as a system of interrelated standards divided into three groups: Universal Standards, Sector Standards and Topic Standards.

The Universal Standards form the foundation of GRI reporting. GRI 1: Foundation 2021 explains how the overall system works and sets the requirements and principles for reporting. GRI 2: General Disclosures 2021 covers information about the reporting organization, including its activities, governance, policies, and reporting practices. GRI 3: Material Topics 2021 provides guidance and disclosures for identifying material topics and reporting how they are managed.

Sector Standards help organizations identify sustainability topics likely to be material within particular industries. Organizations use the Sector Standards relevant to the sectors in which they operate when determining their material topics.

Topic Standards contain disclosures relating to specific sustainability issues. Organizations select the relevant Topic Standards according to the material topics they have identified. These can cover environmental, social, economic and governance-related issues.

GRI 1 also specifies nine requirements that organizations must meet to report in accordance with the GRI Standards. These include applying the reporting principles, reporting the required disclosures from GRI 2 and GRI 3, determining material topics, reporting relevant Topic Standard disclosures, addressing permitted omissions, publishing a GRI content index, providing a statement of use and notifying GRI.

Eight reporting principles support the quality and presentation of reported information: accuracy, balance, clarity, comparability, completeness, sustainability context, timeliness and verifiability. Together, these principles are intended to make sustainability information more reliable, understandable and useful for stakeholders and other information users.

Applicability/Usage

Any organization can use the GRI Standards, regardless of its size, type, geographic location, or previous sustainability reporting experience. This makes the framework applicable across companies, public bodies and other organizations seeking to communicate their impacts on sustainable development.

In practice, organizations begin by identifying and assessing the impacts associated with their activities and business relationships. They then determine which impacts are most significant and group these into material topics. The applicable Universal, Sector and Topic Standards are subsequently used to determine what information should be reported.

Stakeholder engagement and due diligence play an important role in this process. Stakeholders can include employees, customers, suppliers, investors, communities, governments, civil society organizations, and other groups affected or potentially affected by an organization’s activities.

GRI reporting is intended for a broad range of information users. Stakeholders can use the disclosures to understand how an organization affects them, while investors can use the information to assess sustainability impacts and their possible relationship with financial risks, opportunities and long-term business performance. Analysts, researchers and policymakers can also use GRI information for benchmarking and analysis.

GRI distinguishes between reporting “in accordance with” the Standards and reporting “with reference to” the Standards. An organization can state that it has reported in accordance with the GRI Standards only when it meets all nine requirements specified in GRI 1. Organizations that use selected Standards or cannot meet all requirements may instead report with reference to GRI, subject to a separate set of requirements.

GRI does not require sustainability information to appear in a single standalone report. Information can be published across sustainability reports, annual reports, websites or other locations. The GRI content index provides a central reference showing which Standards and disclosures have been used and where the reported information can be found.

Updates or Status

GRI 1: Foundation 2021 forms part of the revised GRI Universal Standards published in 2021. It became effective for reports and other materials published on or after 1 January 2023.

The 2021 Universal Standards consist of GRI 1: Foundation 2021, GRI 2: General Disclosures 2021 and GRI 3: Material Topics 2021. The 2021 Standards replaced the 2016 Universal Standards.

GRI 1 remains the foundational Standard within this system, while the wider GRI Standards continue to evolve through new and revised Sector and Topic Standards. Each GRI Standard includes its publication year and an effective date so organizations can identify the specific version that applies to their reporting.

Because individual GRI Sector and Topic Standards can be revised separately, organizations preparing sustainability reports should check the latest applicable standards rather than relying solely on the publication year of GRI 1.

Conclusion

GRI 1: Foundation 2021 provides the foundation for understanding and applying the wider GRI Standards. Rather than functioning as a standalone list of ESG metrics, it establishes how organizations should approach sustainability reporting, identify significant impacts, determine material topics and apply the wider GRI reporting system.

A defining feature of GRI is its focus on an organisation’s impacts on the economy, environment and people, including human rights. This gives GRI a broader stakeholder and impact perspective than sustainability disclosure approaches focused primarily on financially material risks and opportunities for investors.

For organizations beginning with GRI, GRI 1 is therefore the logical first step before applying GRI 2, GRI 3, relevant Sector Standards and the Topic Standards associated with their material sustainability issues. It also establishes the reporting principles and procedural requirements that determine whether an organization can state that it has reported in accordance with the GRI Standards.

Access the original full framework here: click here.