Latin America will be at the forefront of major global discussions on biodiversity this year. For the first time, my home country of Colombia will host the UN Conference of the Parties on Biodiversity (COP16), which starts on 21 October in the city of Cali.

COP16: local solutions for a global crisis

The COP is the governing body of the Convention on Biological Diversity (CBD), an international treaty launched here in Latin America at the Earth Summit in Rio de Janeiro, in 1992. With the aim of driving global commitments to protect nature and ensure the sustainable use of our planet’s resources, this sixteenth edition has the theme, ‘Peace with Nature’.

COP16 will gather diverse actors, such as governments, civil society, businesses, financial institutions and academia, to catalyze collective action to transform our relationship with the natural world. Following the adoption of the Kunming-Montreal Global Biodiversity Framework (GBF) at COP15, this next international conference is a key moment to assess if this roadmap for action is having an effect in halting and reversing biodiversity loss.

A multi-dimensional problem

According to WWF, between 1970 and 2018 the world saw a 69% decline in species populations, largely due to deforestation, agricultural practices, overuse of natural resources, climate change, and pollution. The UN has reported, meanwhile, that one million species are threatened with extinction.

Biodiversity is also closely linked to economic activities and the role of businesses. The World Economic Forum’s New Nature Economy Report II found that over half of total global GDP is at risk as a result of biodiversity loss. Thus, reversing these alarming trends is crucial across multiple dimensions, including environmental, economic and human aspects.

The most biodiverse yet unequal region in the world

Latin America is home to 50% of the world’s biodiversity, including key ecosystems such as the Amazon, the most biodiverse tropical rainforest in the world; the Andes, the longest mountain chain on Earth; and the Caribbean, one of the regions with most marine biodiversity. At the same time, it is the region that shows the greatest declines in wildlife population abundance.

Latin America is also the most unequal region in the world, which magnifies the economic consequences of nature loss, with indigenous communities particularly vulnerable. One in five jobs are closely connected to biodiversity, according to analysis by the Economic Commission for Latin America and the Caribbean.Therefore, a just transition must not only protect nature but also ensure that the most vulnerable populations are supported, bridging the gap between sustainability and social equity.

In this context, sustainable business models that consider the impacts on nature can make a huge difference to the region’s prospects, environmentally, socially and economically. This is why a transition to a nature-positive economy is especially critical for Latin America, and why hosting COP16 in Colombia is a key opportunity to put nature at the heart of the global environmental agenda.

The role of impact reporting

Understanding and addressing the impacts of companies on nature is essential to foster conservation and halt biodiversity loss. That’s why GRI’s presence at COP16 will be centered on how to drive business accountability for their impacts on nature.

At GRI, we are shaping the global debate on the importance of biodiversity in the sustainable development agenda. At the beginning of the year, a major revision to the GRI Biodiversity Standard — GRI 101 — was published, to represent internationally agreed best practice in corporate transparency and biodiversity. At COP16 we will be focusing on our efforts to sustain momentum for biodiversity reporting, built on GRI 101:

• Our pilot for the use of GRI 101 with early adopters within GRI Community members.We will share experiences from this program, which has been implemented at global and regional levels. In the GRI Latin America Network, we have been working with companies that span energy, services and civil society sectors, identifying opportunities and challenges on the use of GRI 101 to support their biodiversity disclosure efforts.
• To support reporters in their use of our Biodiversity Standard, the GRI Academy, the world’s leading education portal for sustainability reporting professionals, has launched Charting a greener path: reporting on biodiversity with GRI Standards. The online training provides the know-how on best applying GRI 101, and deep dives into biodiversity as a wider topic.
• In line with GRI’s commitment to make the Standards accessible to a diverse global audience, during COP16 we will introduce the Spanish and Portuguese translations of GRI 101. The Standard is also available in Arabic, French, German, Italian, Indonesian, Japanese, Simplified Chinese and Traditional Chinese.
• As part of our collaboration efforts to foster seamless reporting experiences, together with Taskforce on Nature-related Financial Disclosures (TNFD) a joint interoperability mapping resource has been published to help GRI’s 14,000 reporters globally align with the TNFD recommendations and assist TNFD adopters in their reporting according to GRI Standards.
• To bring business accountability on biodiversity impacts into the spotlight, during COP16 senior GRI representatives will be speaking at national, regional and international events and workshops. They will also engage with a wide range of stakeholders including policymakers, businesses, and government representatives.

Collective action and a shared responsibility

Protecting our natural heritage can only be done through a collective effort — including governments, the private sector, civil society, local communities, financial institutions and others. This multi-stakeholder ethos, as envisaged by GRI, needs to be a prerequisite for COP16 to stand any chance of succeeding in its aims.

If this shared responsibility can be realized, I believe COP16 can be the turning point for Latin America and beyond. It can deliver a lasting legacy that goes beyond supportive words from the global community about preserving biodiversity, and moves to the action needed to secure a sustainable future for the benefit of present and future generations.

ABOUT THE AUTHOR

Andrea Pradilla leads GRI’s regional network for Latin America, based in Bogota, with responsibility for promoting sustainability reporting throughout the region by engaging with companies, capital markets and other stakeholders. Prior to joining GRI in 2014, Andrea headed the Colombian National Contact Point for the OECD Guidelines for Multinational Enterprises, at the Ministry of Trade, Industry and Tourism.

Earlier in her career, Andrea worked in international development for organizations in Washington DC. She has a MSc in Foreign Service from Georgetown University (USA) and a Degree in Law from Pontificia Universidad Javeriana (Colombia). She serves on the boards of various non-profits and is an Adjunct Professor of Corporate Sustainability, CESA Business School (Colombia).

Set against the picturesque backdrop of Borgo Egnazia, Italy, the latest G7 summit was a stage for delicate decisions. In the final communiqué released on 14 June, the G7 leaders reaffirmed their commitment to tackling the triple crisis of climate change, biodiversity loss, and pollution. Acknowledging these aspects as inherently connected is vital, as is pushing for a ‘just transition’.

As the ILO puts it, a just transition is about “Greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind”. It’s significant therefore that the G7 has recognized the role of vulnerable communities, diverse social challenges, and need for wide involvement of businesses and civil society.

We might be tempted to salute these commitments with nothing but enthusiasm, but unfortunately not all that glitters is gold. Despite the positive overtones, the summit lacked the ambition to propose any new — and much-needed — actions against climate change.

Yet, how can the corporate world contribute where international policysetters fall short? Here, we can draw inspiration from the G7 communiqué: “Availability, comparability, and credibility of robust information in the financial sector and real economy”, which underscores the importance of effective sustainability reporting practices by the private sector.

Away from fossil fuels, but not just yet

Let’s start with the silver linings. The G7 leaders have pledged to achieve a substantial reduction in global greenhouse gas (GHG) emissions, aiming for a 43% fall by the end of this decade and a 60% reduction by 2035 from 2019 levels. This is welcome, as emissions continue to rise, posing challenges to achieving the goal of limiting global temperature rise to below 1.5°C.

Cutting emissions goes hand-in-hand with another important goal, to triple global renewable capacity and double energy efficiency by 2030. Accelerating renewables is essential for transitioning away from fossil fuels, enhancing energy security, boosting growth and job creation. Improving the resilience and flexibility of electricity systems is another key issue and can be attained through increased deployment of storage systems, digitization of grids and power plants, and investing in dedicated supply chains.

Although it’s an encouraging starting point, it is simply not enough. The G7 countries must rule out an urgent plan to phase out fossil fuel with a clear and ambitious timeline, ideally within the next decade. Only then can they genuinely lead the way in climate action which, as the G7 highlighted, must put people at its core, and it needs a tangible contribution from society and business actors alike.

Pollution’s toll on biodiversity

The G7 acknowledges pollution as a key driver of biodiversity loss. For instance, nitrogen deposition remains a significant threat, with damaging levels found in 75% of the total ecosystem of the 27 EU Member States in 202o. The final declaration remarks once again how concentrations of pollutants negatively affect ecosystem and species health. Our planet’s biodiversity, once robust and diverse, is now struggling to adapt to the rapidly changing climate.

This situation is not merely an environmental concern; it’s a pressing and holistic crisis, with harsh consequences on our food security and supply chains. As the communiqué states: “We recall our existing commitments…in halting and reversing biodiversity loss by 2030, in an integrated manner, while ensuring sustainable and inclusive economic growth and development, enhancing the resilience of our economies and accelerating energy transition”.

According to the European Environmental Agency, ground-level ozone continues to damage crops and reduce yields. From 2000 to 2020, there was a notable reduction in the proportion of agricultural land exposed to harmful ozone levels, falling to a low of 6% in 2020. However, the economic losses on wheat yields in 2019 still totaled €1.4 billion across 35 European countries.

What all of this points towards is a complex web of interconnected challenges.

Promises and pitfalls

Ambitious pledges require rock-solid foundations, yet the G7 communiqué falls short by lacking a bold and clear timeline, with defined milestones.

The summit should serve as the cornerstone for climate commitments, leveraging its influential position to set agendas and mobilize essential finances and resources. What we perceive, however, is a gap between the urgency of the situation and the incremental steps being taken to address it.

First and foremost, the focus must extend beyond a vague reference to “transitioning away” from fossil fuels. The world is waiting for ambitious commitments based on a direct transition to renewable energy systems, with people to be put at its very core. Yet, there are no clear steps and timeframe to phase out fossil fuel.

The aim to phase out unabated coal by the early 2030s is equally underwhelming: there is a deliberate vagueness around the target date while urgent action is required now.

Moreover, the G7 leaders gathered in Apulia missed the chance to set ambitious targets on the new collective quantified goal on climate finance. In the final communiqué, the G7 delegates this crucial task to the upcoming COP29, that will take place this fall in Baku.

The seriousness of the situation is echoed in the words of UN Secretary General, Antonio Guterres: “Unless we act now, the 2030 Agenda will become an epitaph for a world that might have been”.

It’s time for boldness and accountability

Forward-looking metrics are needed to outline credible transition pathways, both for the public and private sectors. This is not just a key part of the G7 stance, but also a milestone of GRI’s mission. The triple crisis of climate change, biodiversity loss and pollution are reflected in the GRI Standards:

• GRI 101: Biodiversity 2024. Launched in January 2024, it emphasizes the synergies and trade-offs between biodiversity and climate, urging companies to consider and disclose these in their reports. It also aligns with the G7’s objectives, helping organizations disclose significant impacts on their biodiversity impacts.
• GRI Climate Change Standard. Currently incorporating public feedback before publication early next year, it prioritizes GHG reductions as the primary mitigation action expected for companies, while linking them with impacts on society and the people, and includes multiple disclosures that are directly linked to biodiversity. It also covers the use of carbon credits, as well as transition and adaptation plans.
• A new revision of GRI Energy Standards will kick off soon, and focus on transparency in energy efficiency, renewable transitions and their social and environmental impacts, incorporating the broad concept of just transition.

In the grand tapestry of climate action, we must ensure commitments do not become relics of promises unfulfilled. A holistic approach towards climate change is surely the way to go, but it must feature true boldness and effective corporate accountability. In an era where the stakes are so high, we cannot afford anything less.

About the Author

Margherita Barbieri is a manager in the GRI Topic Standards Team, where she is leading the project to update of the GRI Climate Change & Energy Standards. Before joining GRI, Margherita worked in the food and beverage industry, specializing in marketing and sustainability. She also led the World Economic Forum circular economy initiative, Scale 360°, in Turin. She completed the Executive Programmes in Corporate Sustainability and Leadership from Saïd Business School (UK) and holds an MA in International Relations from the University of Turin (Italy).

At first glance, Dubai seemed like the least suitable city to host the UN COP28 climate change conference (held 30 November to 13 December 2023). As I experienced for myself, almost everything in the city is artificial; a paradoxical place to talk about protecting the natural world. In Dubai, you can ski inside a shopping mall when it’s 40 degrees Centigrade outside. Even the islands are artificial, and the Emirates are building a coral reef — 200 square kilometers capable of hosting more than a billion corals and 100 million mangrove trees, to be completed by 2040.

Yet the economy of the Emirates is not based on tourism nor on the existence of manmade reefs. On the contrary, it is powered by fossil fuels that cause immense damage to the very environment they are apparently committed to rebuilding.

From Glasgow onwards, nature has started to make an appearance in climate COPs, but it is in Dubai that the topic became most prominent. This has meant that, during COP28, there were daily high-level events and discussions about impacts on nature, with GRI regularly involved.

Ensuring the objectives in the Kunming-Montreal Global Biodiversity Framework — signed in Montreal just over a year ago — are integrated into the negotiating agenda of climate conferences is fundamental. In fact, it will not be possible to reach the Paris Agreement objectives and keep temperatures below the 1.5 degrees threshold without the absorption of CO2 that comes from the ecosystem services provided by nature. This is why it was encouraging that this issue was at the center of the COP28 negotiations, and ‘the importance of conserving, protecting and restoring nature’ positioned in the final text of the COP28 Global Stocktake.

Reaching planetary limits to withstand climate change

The COP 28 leaders’ event, Protecting Nature for Climate, Lives and Livelihoods, emphasized that the protection of nature is an important objective of this COP. For too long nature has been ignored in the debate on climate change and is considered only as a mere tool for mitigation. During the meeting, the Swedish ecologist and researcher Johan Rockström set out how scientific evidence reveals that we have exceeded six of the nine planetary boundaries (the limits to the impact of human activities on the planet) and we are losing the capacity to adapt to climate change.

The global temperature is racing towards an anomaly of +1.5 degrees too quickly and it is critical to rely on nature to slow down this dangerous escalation.

Oceans and forests can help absorb up to a third of the global emissions necessary to keep the Paris Agreement goal alive: if it weren’t for nature, we would have already lost all hope. Key themes on this topic were very evident at this climate COP.

Sustainable agriculture and food systems

The Declaration on Sustainable Agriculture, Resilient Food Systems and Climate Action[FM1] was launched at COP28, signed by over 130 countries, representing 5.7 billion people and consuming 70% of the world’s food resources. This is an important step forward because from now on countries will have to include agriculture and food systems when developing their Nationally Determined Contributions (NDCs) and National Adaptation Plans (NAPs).

Furthermore, over 2.5 billion US dollars was mobilized to support the food systems most vulnerable to climate change. As stated by the COP Presidency, addressing global emissions and protecting the lives and livelihoods of farmers on the front lines of climate change are key elements of this COP28 food systems agenda.

Consensus on safeguarding our seas

French President Emmanuel Macron recalled that the next UN Ocean Conference will be held in Nice next year. The French goal, therefore, is to bring together the scientific community on the topic of oceans and reach a scientific consensus, in the same way that climate science is brought together with the IPCC.

The hope is also to achieve ratification of the UN Agreement on the High Seas, signed last September. These are waters beyond 200 nautical miles from the coasts, and which do not fall under any national jurisdiction. Regulating their exploitation is particularly important because they are home to a huge variety of marine species and play an essential role in supporting biodiversity.

The other important areas of focus in this area are achieving universalization of agreements on illegal fishing, the negotiations on the binding agreement on plastics, as well as the work being carried out on the protection of the seabed. Achieving transparency on issues such as these is addressed within the GRI Agriculture, Aquaculture and Fishing Sector Standard (which as of this month is in effect for reporting organizations in these sectors).

Climate action has a mountain to climb

A new agenda item at COP28 was to highlight the need to protect vulnerable mountain ecosystems, while strengthening the resilience of mountain populations and economies to reduce loss and damage. The idea of ​​including this topic on the agenda was brought forward in a proposal from Andorra.

The reasons are that mountains cover a quarter of the earth’s surface, and are home to 15% of the world’s population, as well as hosting half of the world’s biodiversity hotspots. Furthermore, they are the main reserve of natural waters and play a crucial role in food security. However, mountains are one of the ecosystems most impacted by climate change, given that the increase in temperatures occurs at a higher rate in the mountains than in other areas, causing negative impacts for the populations who live there, but also for all those who benefit from the ecosystem services provided by mountain areas.

Taking stock of nature

At COP 28, the importance of bringing nature to the negotiating tables and including it in the Global Stock-take negotiations was prominent. In this regard an open letter (organized by Nature4Climate) was published with the aim of bringing nature and biodiversity to the center of COP Stocktake.

Key points included announcing and publishing plans for implementation of nature based solutions, with political, regulatory and budgetary commitments for the next five years. It also set out the need to protect the rights of Indigenous Peoples and local communities. It is worth remembering that indigenous populations represent only 5 percent of the world population yet have an important role given the lands they inhabit account for 80 percent of global biodiversity. Respecting the rights and leadership of Indigenous Peoples is a matter of social justice, but it is also the only possibility of making the Kunming-Montreal Agreement a success.

We need transparency to achieve climate goals

The climate and biodiversity challenges are two sides of the same coin. This is why we must accelerate and bring nature into the global discussion, ensuring that the objectives in the Kunming-Montreal Agreement are achieved.

Yet progress is contingent on accountability, both from governments but importantly from companies and other organizations. It’s is highly significant, therefore, that GRI is developing a new global reporting standard for climate change, which is out for public comment until the end of February, alongside a revised Energy Standard. Q&A webinars for all interested parties take place soon, on 18 January and 24 January.

The Climate Change draft incorporates the interrelation of climate change and biodiversity, something unique in the current reporting landscape. When final, this new standard will complement a revamped GRI Biodiversity Standard, set to launch in the coming weeks.

With the ink barely dry on the COP28 declaration, we need to remember that safeguarding nature, with transparency achieved for the impacts of organizations around the world, is absolutely non-optional if we are to stand any chance of turning the commitments signed last month in the concrete jungle of Dubai into reality.

· This text has been adapted from an article originally published by National Geographic Italia in December 2023.

Material sustainability issues associated with our food systems are multiple. How companies respond to these issues directly influences the long-term resilience of agriculture and food supply chains. In order to measure progress and identify gaps, more relevant and high-quality sustainability data is needed. Yet mainstreaming corporate disclosure in the agriculture and food sector does not come without challenges.

The food that we eat is produced every day, everywhere, and comes from multiple destinations. The food sector comprises both consumer-facing parts, such as retail, catering, and restaurants, and the upstream production sector, which includes companies operating farms, plantations, and fisheries. There are a lot of blind spots in this value chain: unlike retail food brands who are often well-known, most agricultural producers tend to remain in the shadows — consumers would not necessarily know who they are and where they are located. In addition, agricultural production is characterized by the presence of many small companies. In some countries, up to 80% of food is produced by smallholders.[1] To deliver the produce to the markets, food supply chains rely on aggregators and traders, often active across multiple sectors.

Agricultural produce from many different points of origin gets blended together, posing challenges to traceability. All these factors make the food sector highly fragmented and transparency about its impacts insufficient.

Furthermore, benchmarks of companies’ performance in the agriculture and food sector show that standardized data on emissions, human rights issues, living wages, food loss, pesticides use, and water is lacking.[2]

Sustainability reporting in the sector

Public sustainability reporting is a known catalyst for ESG data disclosure, making markets more transparent and allowing to understand companies’ sustainability and long-term viability. Large producers like Olam and Cargill publish sustainability reports, covering a wide range of topics and data points. Smaller companies often fall outside the scope of regulations mandating sustainability disclosure and they are not subject to ESG ranking organizations. But they also generate ESG data. If a small producer wants to be part of the global supply chains, they are encouraged by large retailers — and increasingly required — to adopt certification schemes, sign up to responsible sourcing criteria, and participate in sustainability audits. These schemes result in labels signalling fulfillment of certain and specific sustainability requirements for commodities or sites, but they also have their drawbacks. For example, the underlying data may not be publicly available, assessment criteria of such schemes may be narrowly focused on avoiding major risks and prioritizing quantifiable environmental impacts rather than social ones, thus limiting transparency.

Policy developments

Another limiting factor for transparency in the agriculture sector is lack of progress on policies mandating disclosure of agriculture-specific indicators. Many regulatory bodies have identified areas requiring action and measurement, including immediate priorities to secure harvests and ecosystems. These shared objectives encompass halting deforestation, reducing the use of highly hazardous pesticides, enhancing soil health, preserving biodiversity, and so on.

This collective recognition of priorities has extended its influence into the corporate landscape. At the international level, the Food and Agriculture Organization (FAO) has produced voluntary guidelines and codes of conduct for companies on specific issues. The OECD-FAO joint Guidance for Responsible Agricultural Supply Chains has set out broad expectations from business, including on human, labor and land rights, animal welfare, and several other topics. Regionally, the European Union has developed a Farm to Fork policy framework with detailed sustainability outcomes for the agriculture sector, comprising targets that will cascade down to business level. The authoritative EAT-Lancet commission has identified six main areas of concern for the sustainability of the agriculture sector and proposed indicators to measure these — GHG emissions, crop land use, freshwater use, nitrogen and phosphorus application, and extinction rate.

To track progress in all of these areas, there needs to be aligned measurement and a high uptake of a standardized reporting methodology.

Despite significant policy developments, there are still key issues in the food sector where regulatory pressure is lacking. For example, despite recognizing animal welfare’s relevance for both environment and nutrition, economic incentives to maintain low meat prices are being preserved. Available research concludes that a higher proportion of plant-based foods is beneficial for both the environment and human health.[3]

Nutrition

When it comes to nutrition, the prevailing consumption patterns often favor fast and inexpensive options over healthier alternatives. While shifting to healthier diets is a choice that individuals can make, this shift requires from them a comprehension of nutrients, the capacity to make informed choices, access to healthier food options and affordability of those.

When considering the agriculture and food sector’s effects on nutrition, both downstream and upstream segments of the value chain have a role. The downstream part, encompassing food processing, retail, and catering sectors, is crucial as it directly influences the food choices available to consumers. It is worth noting that there are growing regulatory attempts aimed at expanding the range of healthier food options, including more plant-based options, in retail and catering across various jurisdictions.

ESG data can serve as a tool in driving nutritional shifts in this regard. For instance, this can be facilitated through ESG targets related to the offering of healthy or healthier food options and the sales of such.

At the same time, the upstream sectors — agriculture, aquaculture and fishing — also have an influence on nutrition. These sectors shape the supply side of the equation, which in turn impacts demand: decisions regarding what to grow on the land — such as food crops or non-food crops, opting for commercially more advantageous crops over essential food crops, and allocating land for either crop cultivation or animal rearing — as well as the sustainability practices adopted in farming and fishing, all affect the availability and affordability of food.

Global momentum for transparency

The push for transparency is transversal. Investor interest in the risks facing the food system has also been growing over the last years. This is reflected in shareholder resolutions being filed at multinational food companies and the growth of investor-led engagement initiatives.[4]

Overall, integrating sustainability reporting standards in the agriculture and food sector has high potential for transformative effect. But we need to take proactive steps to get reliable and comparable data, especially in critical areas. Beyond relying on product certifications, producers should embrace broader sustainability strategies that align with overall sustainability goals.

To make real progress in agriculture and food, we must focus on two key goals: more relevant, globally consistent and high-quality sustainability data and getting that data from more and more companies.

In 2022, GRI published the Sector Standard for Agriculture, Aquaculture and Fishing (GRI 13) that features 26 topics, including emissions, biodiversity, climate adaptation and resilience, natural ecosystem conversion, food security, animal welfare, and living wages for farmers, among others. GRI 13 was developed by a multi-stakeholder project working group, featuring representatives from business, civil society, labor unions, investors and mediating institutions, including the UN agencies, benchmarking organizations and consultancies. With the Standard coming into effect on 1 January 2024, all companies in the sectors reporting in accordance with GRI Standards will be required to use GRI 13.

References

[1] International Fund for Agricultural Development, United Nations Environment Programme, Smallholders, food security, and the environment, 2014.

[2] See the findings of the World Benchmarking Alliance Food and Agriculture Benchmark 2023.

[3] The EAT-Lancet Commission, Summary Report of the EAT-Lancet Commission: Healthy Diets from Sustainable Food Systems, 2019.

[4] See Financial Times at ft.com, Big food’s unhealthy products leave bitter taste for ESG investors, 2022.

[5] See the KPMG Survey of Sustainability Reporting 2022.

About the author

Margarita Lysenkova joined GRI in 2019 and was the project manager who led the development of GRI 13. In her current role, she manages strategic relations, including with intergovernmental organizations and governmental bodies, and drives policy dialogue and advocacy for the private sector engagement.

Margarita’s professional background is in the corporate, UN and non-for-profit sectors across four countries. She has previously worked for the International Labour Organization in Geneva, and in a financial reporting role with a Belgian multinational. Margarita holds degrees in economics (Saint Petersburg University of Economics & Finance) and business management (ESC Rennes School of Business).

For more than 25 years, GRI has been guiding organizations in the best practice for how to communicate their impacts, responding to the needs of stakeholders. But have you ever considered how, as a relatively small organization with a global relevance and reach, GRI responds to the challenges of producing its own a sustainability report?

Since 2008, we have published an annual report, following the GRI Guidelines in the beginning, and later the GRI Standards. And for our 2022 report, published in June, for the first time we reported using the 2021 updated Universal Standards — the standards that provide the foundation for all GRI reports.

In effect since January of this year, under the new version of the Universal Standards, organizations need to report ‘in accordance’ with the Standards, which has replaced the former ‘core’ or ‘comprehensive’ options. For us, like any other reporter that used the ‘core’ option in the past, this required a new approach.

To manage our transition, late last year we established a dedicated Sustainability Reporting Team with cross-departmental representation. Once this seven-member group was created, we started by identifying the main tasks and producing a project plan:

Developing our reporting process

GRI 2: General Disclosures 2021 contains disclosures that are relevant to all organizations, regardless of size or sector and are therefore mandatory for ‘in accordance’ reports. This meant we undertook a thorough gap-analysis to identify information previously not reported.

In parallel, the team started collecting contact information for our stakeholder engagement outreach. As a global organization, we have stakeholders across multiple countries and regions and our colleagues around the world contributed to the development of a database that now consists of around 4,000 individuals.

We also identified what we considered to be the material topics for GRI to report on — i.e., our most significant impacts on the economy, environment, and people. After consulting with GRI’s Management Board, these topics were shared with stakeholders in the form of a survey. Once responses were in and analyzed, the outcome led to our identified material topics for 2022:

· GRI Standards development

· Standardized impact reporting

· Driving reporting uptake

· Increasing reporting robustness

· Impacts on people

· Economic impacts

The reporting team started engaging the various ‘data owners’ throughout the organization to gather the information. We set a timeline covering content development, copy writing, design, and the content index creation — all with the intent of having a final report ready for publication by the end of June. Below I share some practical insights from our reporting experience.

Creating a dedicated team

Having a project team responsible for the report is definitely something I would recommend, and was crucial for us in successfully publishing the report on time. By dividing tasks among the team, including appointing a coordinator role, all aspects could be run in parallel. What also helped was the fact that we ensured team members spanned the various departments and could therefore easily identify the data-owners and information sources. For the 2023 report, we intend to build on the reporting team by finding further ways to integrate more colleagues and utilize the insights and expertise they can bring.

Mind the gap

When transitioning from the 2016 Universal Standards to the 2021 version, a gap-analysis is absolutely crucial. However, this process may turn out to be more complicated and time-consuming than first anticipated. The main reason for us was the extensive disclosures required on governance related issues. Not all of disclosures are relevant to a not-for-profit organization like GRI yet they are rightly mandatory and still needed consideration.

An additional factor for us, as a foundation incorporated in the Netherlands, was due to recent change in Dutch legislation that meant GRI’s governance structure was changed to a two-tier board structure. This required all previous governance-related disclosures to be re-evaluated. The time investment was well spent and will mean GRI is in a good place to report on these issues in the future. Keeping all of this in mind, my recommendation would be to commit sufficient resources to the gap-analysis stage. It’s also worth taking time to consider your own legal and geographic context, and what this may mean for your report.

There’s always room for more engagement

The team had some great ideas when it came to stakeholder engagement, and all of these were explored. This included expanded interaction through in-depth interviews and focus groups. Unfortunately due to time constraints, not all options were able to be implemented for the 2022 report. We are, however, determined to increase our engagement for the 2023 report, with the opportunity to discuss the topics identified as material for the 2022 report and explore whether our stakeholders identify other relevant impacts.

The materiality challenge

It may sound surprising, but for the majority of our identified material topics, there is no GRI Topic Standard available. For instance, ‘GRI Standards development’ and ‘driving reporting uptake’ do not readily apply themselves to the range of GRI Standards. This might well be the case for other non-profit organizations similar to us — and makes the case for a future GRI Standard for the non-profit sector.

However, this situation is never a reason not to report on a material topic. For topics that cannot be linked to a specific Standard, the reporter should use Disclosure 3–3 from GRI 3: Material Topics 2021. This way you can explain what the impacts are — whether they are actual or potential, negative or positive — and how they are being managed.

Some top tips

To conclude, I want to summarize a few key learnings from our reporting experience:

1. Good planning with a clear division of work is essential. Once tasks have been identified, involve relevant colleagues and let them know what you need from them and when. This helps to ensure ownership and avoid delays.

2. Do not underestimate the time for review and sign-off. There is typically limited flexibility to achieve the publication deadline, so build in sufficient time through the planning process.

3. Help is at hand if you need it! The Transitioning to the GRI Standards 2021 update course is provided via the GRI Academy, while we also have a Content Index Service available.

4. Remember it’s not just about the final report — the reporting process is an opportunity to learn and improve. So, once the report is out, share and assign actions with colleagues. You will need their input in future, and it’s never too early to start planning for your next report!

We would love to know what you think of the GRI 2022 sustainability report. Please get in touch with your feedback.

A delicate balancing act has been playing out across the mining sector: while minerals are intrinsic to global development and can pave the way for a low-carbon economy, the impacts of their extraction are disproportionately felt by communities living in the vicinity of operations. Critical incidents at mine-sites and disputes with local stakeholders are examples of issues that can compromise an organization’s social license to operate. The term, which denotes the acceptance of organizations and their operations by local communities, is essential to sustainable mining — but takes time and effort to cultivate. After all, building trust is not just about making a promise, it is about following through.

Ensuring that mineral wealth brings real and long-term gains to communities is a multi-faceted challenge that requires persistence and excellence across all dimensions of sustainability, including transparency about the impacts mining operations have on the groups affected by mineral extraction.

The proposed GRI Sector Standard for Mining, which is out for public comment until 30 April, invites stakeholders to provide input on this critical issue — alongside wider environmental and economic topics — to develop a holistic sustainability reporting standard that will improve accountability on the sector’s impacts

The range of stakeholders who can potentially be affected by mining includes not only residents near or downstream from mining operations, but also the farmers, artisanal miners, employees, contractors or migrants, who live and work in the wider vicinity. The rights of Indigenous Peoples are of particular concern, especially given the prevalence of mining that occurs on protected land, and the history of conflict between mining firms and such communities. In many cases, these groups can gain financial benefits from mining activities, but also bear the brunt of its negative impacts.

Achieving a balance of impacts and opportunities

“Mining can provide employment, opportunities for local suppliers, taxes, community development, infrastructure and investment,” Judy Kuszewski, the outgoing chair of GRI’s Global Sustainability Standards Board, recently stated. “And yet, at the same time, mining activities can have an adverse effect on communities and their livelihoods through biodiversity loss, pollution, lack of access to freshwater, noise, displacement and health and safety threats.”

Yet if relations with local communities are managed with an eye towards transparency and shared benefits — with vigilance to avoid, mitigate and remediate negative impacts — mining operations can be a source of positive change. They can bring a much-needed inflow of capital and employment, providing prosperity and decent work. They can also support community development and infrastructure investments with lasting benefits, such as renewable energy, transportation networks or water infrastructure. Proactive and continuous consultation with local stakeholders throughout the mine life can also prepare communities for a diverse and resilient post-mining economy, helping mitigate the sometimes drastic impacts mine closure can have.

“Through the development of the GRI Standard, this juxtaposition has really been front and center,” explained Kuszewski. “Having that kind of balance in mind the whole time is a foundational principle to the work that’s been done here.”

Deeper engagement with impacted communities

In the process of drafting the Mining Standard, the importance of meaningful community engagement by mining organizations has been consistently raised by the expert working group and peer reviewers. Disclosing information in local languages is seen as essential, taking into consideration vulnerabilities and sufficient representation of the effected communities themselves. Being transparent about environmental and social monitoring on mine site-level impacts can signal an openness by organizations about their actual impact and their management on local communities.

Due to the salience of communities in this sector, GRI has organized consultation sessions aimed at community and civil society groups specifically. These engagements in Africa and Latin America made it abundantly clear: community is key. Stakeholders in the sector expect transparency from start to finish, and they increasingly demand information that the community can understand and engage with.

Stakeholder input received so far through in-person sessions during GRI’s public comment period has highlighted that the dialogue must occur on an equal footing.

Providing capacity-building for local groups on participation, ensuring consultations are democratic and inclusive, with transparency about who was consulted and at what stage, are ways mining companies can mitigate corruption risks while helping communities regain trust.

Equity in value creation brings multi-stakeholder benefits

Unlike reporting that focuses only on financially-material issues, the GRI Sector Standard for Mining will consider a wider range of concerns directly related to the challenges faced by communities. This includes whether they are consulted on post-mining land use, approaches to employment, procurement and training opportunities, as well as the framework for providing remediation to individuals subjected to involuntary resettlement. The draft Standard also gives attention to the programs to enhance positive impacts or mitigate negative impacts involving artisanal and small-scale mining (ASM).

Rather than looking at risks that communities or vulnerable groups might pose to the mining company as a potential trigger for conflict or operational delays, the proposed Standard focuses on to how organizations are creating value for the people whose lands they are using to extract resources from.

The mining sector is increasingly under a magnifying glass due to its essential role in enabling a low-carbon transition — to ensure that impacts of extracting minerals are well managed and benefits equitably distributed. Sustainable mining can be a boon for everyone: resource-rich economies can achieve long-term stability, while mining companies can develop positive relations and a social license to operate — with communities reaping benefits from their land and labor.

To that end, the GRI Mining Standard will be a crucial step toward accountability for a sector deeply involved both in the significant sustainability challenges facing the global society, as well as the potential solutions to overcome them.

Let us know if the GRI Mining Sector Standard exposure draft supports the reporting needed to address the sector’s impacts, help stakeholders make well-informed decisions and improve sustainability performance by companies. The public comment period closes at the end of April.

About the author

Noora Puro is a manager in the GRI Standards Sector Program, leading the project to develop a sustainability reporting standard for mining organizations. She has been with GRI since 2017, and previously worked on the Sector Standards for coal, and oil and gas.

Before entering the world of standard-setting, Noora specialized in corporate and sustainability communications, advising and preparing reports for multinational enterprises. She holds a master’s degree in humanities from the University of Helsinki.

The adoption of the Kunming-Montréal Global Biodiversity Framework, signed at the UN Biodiversity Conference (COP15) last month, is without doubt a major milestone, committing the world to halting and reversing biodiversity loss by 2030. This encouraging outcome is the result of a hard-won journey, after a two-year delay due to the Covid pandemic.

The stakes were (and remain) high, as the biodiversity collapse the world is experiencing is now clearly evidenced. The IPBES Global Assessment Report from 2019 highlighted unprecedented decline in biodiversity resulting from human activities: in just a few decades, over 85% of wetlands and about half of coral reefs have been lost; a third of fish stocks are overexploited; and 32 million hectares of forest in highly biodiverse regions — an area almost twice the size of France — has been destroyed. As UN Secretary-General António Guterres bluntly put it at the start of COP15, “humanity has become a weapon of mass extinction with a million species at risk of disappearing forever.”

Planting the seeds for restoration

The Framework, signed by 196 parties including the EU, sets ambitious goals and targets to start addressing the underlying political, economic and societal causes of biodiversity loss. If implemented successfully, it aims to achieve:

· 30% of the world’s land and sea protected, and 30% of degraded ecosystems restored, by 2030;

· $200 billion per year mobilized by 2030 (including $30 billion from developed to developing countries);

· Halting human-induced species extinctions, and sustainably managing biodiversity, including the harvest and trade of wild species;

· Action to address the drivers of biodiversity loss — such as invasive species, pollution and climate change;

· Indigenous People’s rights respected and protected.

Growing business accountability

Targets on ‘tools and solutions for implementation and mainstreaming’ of biodiversity focus on the role of governments, the private sector and consumers. Target 15 specifically calls out businesses and financial institutions to ‘regularly monitor, assess, and transparently disclose their risks, dependencies and impacts on biodiversity’.

Over half of global GDP has a moderate to high dependency on biodiversity. Yet while economic activities greatly impact biodiversity, corporate transparency is low.

The recent KPMG Survey of Sustainability Reporting revealed only 40% of 5,800 leading companies around the world currently report on biodiversity. Research from CDP and the World Benchmarking Alliance show similar trends.

The Global Biodiversity Framework makes it very clear that accountability and transparency by companies is crucial. The strong presence of business and finance institutions at COP15, and their willingness to be part of the solution, is a positive sign it can be achieved.

A developing ecosystem to support corporate disclosure

As was the case for many involved, participation in COP15 was a first for GRI. Joining the conference was a valuable opportunity to engage all relevant partners, including business associations, NGOs, regulators and standard setters. In Montréal, we collaborated extensively with other organizations to emphasize the importance of corporate accountability.

Biodiversity is one of the most pressing, yet most complex, challenges that the global society faces.

Several budding initiatives have emerged to set norms for determining and disclosing business impacts and dependencies. Behind an initial perception of complexity, given the number of approaches, it is important to understand their specificities and how they align with one another to avoid duplication.

Several frameworks and initiatives — in particular, the Taskforce for Nature Related Financial Disclosures, the Science-Based Target Network, the Partnership for Biodiversity Accounting Financials and Align — are defining the global practice for companies and institutions to assess and measure their impacts, set targets and identify information that should be publicly disclosed.

These approaches underpin the development of overarching reporting standards. GRI, which delivers the global baseline for impact reporting, is currently undertaking a major revision of GRI 304: Biodiversity, with the exposure draft for the proposed Standard published ahead of COP15. The IFRS Sustainability Disclosures Standards, which will incorporate nature into their climate disclosures, aim to set a global baseline for sustainability-related financial reporting. Together, these standards will offer a complete and robust suite of biodiversity disclosures to assess corporate performance. In the EU, the disclosure system will include the European Sustainability Reporting Standards (namely ‘E4: Biodiversity and Ecosystems’), under the incoming Corporate Sustainability Reporting Directive.

Information disclosed by companies can then be used to make informed decision on their performance. CDP’s questionnaire and the WBA’s Nature Benchmark assess companies’ efforts to manage their impacts on biodiversity.

GRI is working closely with all of these organizations, to align to the greatest extent possible and create that flow of biodiversity-related information — from gathering data to disclosing it publicly in a consistent way that can effectively enable performance assessment by companies, investors and civil society.

Collaboration to reach next-level biodiversity transparency

For 25 years, GRI has provided the world’s leading and most comprehensive sustainability reporting standards, driving transparency and accountability on impacts. Already back in 2000, the first GRI Guidelines included disclosure on land use and biodiversity, which evolved to become the GRI Biodiversity Standard, in 2016. The update to GRI 304 will reflect the new Global Biodiversity Framework and emerging best practice.

As with all GRI Standards, we are applying a robust multi-stakeholder approach, ensuring participation and expertise of diverse stakeholders and bringing together the perspectives of business, investors, civil society, academics other standard setters.

This revised Biodiversity Standard will pave the way for the next level of corporate sustainability.

The draft addresses:

· Impacts in the supply chain — given the most significant impacts on biodiversity for many organizations are found beyond their direct operations;

· Location-specific information, essential to understand the impacts on how to manage them;

· Reporting on the drivers of biodiversity loss and changes to ecosystems and species,

· Providing information on the impacts on people, as a result of the organizations’ biodiversity impacts;

· Information on how those impacts are managed and mitigated.

The draft Standard is now out for public comment, with webinars available to find out more about what the changes mean. We urge everyone with an interest in biodiversity to provide their feedback. This is the chance to shape global best practice on biodiversity impacts transparency for years to come.

Deepening action to achieve results

For those businesses not yet taking steps to disclose biodiversity related information, the Framework adopted at COP15 sends a strong signal that they need to respond to growing demands that they take action now. That process starts with reporting and transparency on their biodiversity impacts.

The ambitions set at COP15 will whither away without collective endeavor from all parties, and that includes business. The good news is that a thriving ecosystem of tools, frameworks and standards will guide companies in their journey to assess, measure, disclose and improve their biodiversity performance. Ultimately this is about this about helping business, society and the natural world to flourish.

ABOUT THE AUTHOR

Elodie Chêne is Standards Manager at GRI, where she has worked on the review of the GRI Universal Standards and is leading the revision of GRI’s Biodiversity Standard. Elodie’s expertise builds on her prior roles in natural resource management and sustainability strategy at organizational and community level.

Prior to joining GRI, Elodie held positions in state and local governments in Australia, at the International Union for Conservation of Nature, and the French department of agriculture and fisheries. She holds a MA in Sustainable Business and Innovation from Utrecht University (Netherlands) and a MSc in Agricultural Sciences from Agrocampus Rennes (France).

A well functioning agricultural sector is a crucial component for any successful and sustainable economy, given its core role in the production of food and raw materials. Supply chains of many sectors rely on crops, fibers and fuels, linking them to agriculture and its impacts.

Given the multiple sustainability themes associated with agriculture — nutrition and health, employment, soil or water contamination, competing demands for land use, and food prices — it’s no surprise that the sector is highly regulated.

As the global drive towards more sustainable agricultural production intensifies, scrutiny will only further increase.

European countries, in particular, have been actively adopting strategies for more sustainable food systems, such as Farm to Fork under the European Green Deal. Consequently, countries who export agriculture commodities to the EU will also need to adapt to these developments.

It can be a significant ask for companies with global supply chains to comply with developing sustainability requirements, as they affect almost every operational aspect — how production is managed; employment terms and conditions; use of natural resources, etc. There are a number of emerging developments, described below, that companies with agricultural products in their supply chain need to be ready to respond to.

Human rights due diligence

Over 2.5 billion people work in agriculture, which is the single biggest source of employment around the world. Agriculture value chains are frequently associated with human rights impacts, which often relate to informal contractual relations and a lack of protections for workers. Insufficient income is a persistent issue, while risk of child labor and forced labor are also high.

This is why due diligence laws, enacted and in the making, are now a major consideration for any business with agricultural supply chains. These include the EU Corporate Sustainability Due Diligence directive, the Modern Slavery Act in Australia, the Duty of Vigilance law in France, and the UK’s Modern Slavery Act — among others.

What these policies have in common is that they focus on ensuring organizations communicate how their human rights impacts are identified and addressed.

This requires companies to set-up qualitative and quantitative data collection and governance to enable compliance. In addition, products need to be traceable, given they can be aggregated from multiple sources with different production conditions.

Deforestation

In December 2022, the European Council and the European Parliament reached a provisional agreement on the regulation for deforestation-free products, proposed by the European Commission. The regulation outlines mandatory due diligence rules for deforestation, with an ambition to ‘reduce the EU’s contribution to greenhouse gas emissions and global biodiversity loss by minimizing the consumption of products coming from supply chains associated with deforestation or forest degradation’. It will cover products in or exported from the EU market, including palm oil, cattle, soy, coffee, cocoa, timber and rubber.

At the international policy level, OECD and FAO are currently developing a Handbook on deforestation, covering forestry degradation and due diligence in supply chains. This means that many businesses will face more disclosure requirements, on how they assess and monitor deforestation risks — in their own activities, supply chains, and even sourcing locations in general.

Pesticides use

The EC has set 2030 targets to reduce by 50% the use and risks of chemical pesticides, and cut by half the use of more hazardous pesticides. Meanwhile, a proposal for a regulation on the sustainable use of plant protection products was adopted by the EC in June 2022, which will make the targets legally binding. In line with the proposal, EU states can be expected to bring in their own national reduction targets, requiring reporting by companies.

This aligns with policy objectives at the international level. The FAO Guidelines on Highly Hazardous Pesticides set expectations on minimizing negative impacts from pesticides, while promoting integrated pest management. Assessing progress towards the reduction targets can’t be achieved without transparency at the corporate level.

Animal welfare

The UK Animal Welfare (Sentience) Act entered into law this year with a core purpose to scrutinize the definition of ‘sentient animals’, which now includes aquatic animals, such as octopus and squid. Recognizing animals as complex beings with the capacity to feel emotions has far-reaching consequences for the agriculture sector and raises the bar for animal welfare, both in the wild and farmed.

The precedent set by the UK can also be expected to lead to more protections for animals, in other jurisdictions. If not already doing so, the corporate sector and any business with agricultural supply chains needs to pay attention to this topic.

Growth in reporting

Increases in sustainability and due diligence policies are prompting companies to do more to disclose their outward impacts, including mechanisms to mitigate and reduce them. With this purpose in mind, EU legislation already requires certain large companies to report information on their socio-environmental impacts, including on human rights. This is being significantly strengthened and expanded through the Corporate Sustainability Reporting Directive, which received final approval on 28 November and from 2024 sets mandatory disclosure requirements for some 50,000 companies, with GRI contributing to the development of new European standards.

The push for transparency is transversal.

Capital markets actors, including banks, stock exchanges, rankers and raters, are also developing evaluation and reporting criteria that encompass agriculture — while retailers are moving towards more stringent sustainability requirements for the products they sell, asking for more information from producers.

Momentum for globally consistent disclosure

As new sustainability policies for crop and animal production continue to emerge, the corporate sector needs to be ready. Demonstrating sustainable agricultural production is becoming critical to preserve access to local and global markets.

GRI 13: Agriculture, Aquaculture and Fishing Sectors, released in June 2022, is a dedicated standard for agriculture companies. It is an extension of the GRI Standards, the most widely used sustainability reporting standards across global regions, which incorporate general due diligence requirements as well as key sectoral topics. While GRI’s standards are voluntary, they build on emerging policies and adopt requirements in line with international law, often exceeding jurisdictional regulations.

GRI 13 integrates sustainability expectations across 26 topics, including those highlighted above, making it all-encompassing.

With more and more imperative to report on sustainability issues, companies would do well to stay on top of emerging requirements and expectations for transparency — by proactively adopting credible reporting standards, and meeting or pre-empting information demands from their stakeholders in the process.

ABOUT THE AUTHOR

Margarita Lysenkova joined GRI in 2019 and was the project manager who led the development of GRI 13. In her current role, she manages strategic relations, including with intergovernmental organizations and governmental bodies, and drives policy dialogue and advocacy for the private sector engagement in the 2030 Agenda.

Margarita’s professional background is in the corporate, UN and non-for-profit sectors across four countries. She has previously worked for the International Labour Organization in Geneva, and in a financial reporting role with a Belgian multinational. Margarita holds degrees in economics (Saint Petersburg University of Economics & Finance) and business management (ESC Rennes School of Business).

In the heat of Sharm El Sheikh, discussions start on 6 November that will determine how, over the next years, we address the defining challenge of our time: climate change. The latest United Nations Climate Change Conference (COP27) brings together political and business leaders, activists, civil society groups, international organizations and others, to set commitments that can quicken the action and adaptation needed to mitigate the impacts of climate change.

The context for COP27 could not be more urgent, as the latest IPCC report sets out in stark terms. Human-induced climate change is causing dangerous and widespread disruption, to the environment and countless people around the world. Increased heatwaves, droughts and floods are already a reality.

These extremes are causing cascading affects that have exposed millions of people to health risks, and acute food and water insecurity, especially in developing and emerging economies.

These crises are inter-connected and those affected most are often the least to blame. For example, World Resources Institute analysis shows that, while many parts of Africa are at the forefront of climate change impacts, the continent accounts for only 3% of global CO2 emissions.

Prioritizing adaptation that protects the most vulnerable

How we address these challenges require holistic thinking, long-term strategies and clear accountability, to prevent and alleviate negative impacts. We cannot achieve that without widespread and comprehensive reporting by organizations on their climate impacts.

As UN Secretary-General António Guterres has set out, greater leadership is needed from governments and businesses, warning that efforts to keep the rise in global temperatures to 1.5 degrees above pre-industrial levels is “on life support”. And so, with good reason, the focus of reporting has been mostly on emissions, with widespread commitments by companies to reach ‘net-zero’ targets.

Yet focus on emissions reductions alone is not enough. If we are to avoid further escalation and consolidation of crises, we urgently need transparency and accountability on how a low-carbon transition, which supports the needs of workers and communities, is being prioritized.

Beyond this, organizations need to explain how their strategies and business practices alleviate the impacts of climate change on those around them. To this end, there are growing demands on companies to help the communities directly affected by their activities to become more resilient against the impacts of climate change.

Clarity on the climate data that matters most

At GRI, we urge all organizations to disclose their impacts on the planet, because transparency — through quality, comparable information — is an essential stage in identifying where responsibilities lie and contributing to global solutions to the climate crisis. Sustainability reporting can be a driver for better environmental performance. However, companies are not always reporting the data that matters most.

That is why, as the most widely adopted standard-setter for sustainability impacts, we convene stakeholders across the board in our standards development, to determine best practice. This is the approach we will again follow as we get ready for a major update of GRI climate-related standards.

A review will launch in 2023 and cover not only commitments and actions to mitigate greenhouse gas emissions, but also how to ensure a holistic view on adaptation and resilience to climate change. This will account for the physical impacts of climate change as well as the low-carbon transition on workers and communities. A key consideration here will be to connect the climate standards review to our current revision program for labor-related reporting.

Demands for more clarity and consistency on the most relevant climate-related impacts of organizations, from the local to the global levels, has been a key learning from our Sector Program.

This is particularly evident in the Sector Standards for oil and gas (GRI 11) and coal (GRI 12). Alongside steps to mitigate emissions, these standards have extensive focus on achieving a just transition. The new Agriculture, Aquaculture & Fishing Standard (GRI 13), meanwhile, gives attention to how organizations enable adaptation and protect critical sources of food.

Our revision of the Biodiversity Standard (GRI 304) has shone a light on the inter-relations between the climate and biodiversity crises. This process is at an advanced stage — and the exposure draft for the revised Biodiversity Standard is expected to be released for public comment early December (during the UN Biodiversity COP 15). This updated standard will closely intersect with our work on climate standards.

‘Double materiality’ in climate disclosure

As demonstrated by our multi-stakeholder engagement, we believe standard-setting should not happen in isolation. To that end, our review of climate standards will not only build on our wider program to develop the GRI Standards, it will also see collaboration and alignment with the climate standards under development by the International Sustainability Standards Board (ISSB) and the recommendations of the TCFD, as well as new EU standards under the Corporate Sustainability Reporting Directive.

GRI reporting is focussed on impact materiality — in terms of how the organization impacts on people and planet.

We will ensure our updated climate standard(s) complement the financial materiality disclosures in the proposed ISSB standards, reflecting our commitment to a global comprehensive reporting regime in which impact and financial disclosure are on an equal footing.

When it comes to climate reporting, the interrelationship between impact on the organization and impact on the outside world is clear to see. Taken together, this ‘double materiality’ perspective — with both the inside-out and outside-in viewpoints taken into account — will be crucial in driving accountability for climate impacts.

On the ground at COP27

Together with partners, GRI is co-hosting two events at COP27, under the theme Towards a Global Comprehensive Climate Reporting System. The first event (Green Zone, 9 November) explores a vision for regional businesses, while the second event (Blue Zone, 11 November) will see GRI and the IFRS Foundation discuss the challenge from the perspective of financial and business leaders.

We are keen to hear from a multitude of stakeholders on their climate reporting needs and expectations — including current gaps — so all voices are heard as we move the review process for our climate standards forward. To this end, we will both be in attendance and available for meetings with stakeholders in the second week of COP27, to gain early input on what impact-focused climate standards should look like. If you are traveling to Egypt, feel free to reach out to us and arrange a meeting to discuss the future of GRI climate reporting.

ABOUT THE AUTHORS

Margherita Barbieri is a manager in the GRI Topic Standards Team, where she is leading the project to create climate change standard(s). Before joining GRI, Margherita worked in the food and beverage industry, specializing in marketing and sustainability. She also led the World Economic Forum circular economy initiative, Scale 360°, in Turin. She completed the Executive Programme in Corporate Sustainability from Saïd Business School (UK), and holds an MA International Relations from the University of Turin (Italy).

Noora Puro is a manager for the GRI Sector Program, where she has overseen the developments of the GRI Oil and Gas and Coal Standards, and is currently managing the project for a Mining Standard. Prior to GRI, Noora specialized in corporate and sustainability communications, advising and preparing reports for multinational enterprises. She holds a MA Humanities from the University of Helsinki (Finland).

We are now at a tipping point of corporate sustainability. Over the past decade there has been an exponential increase in attention on all things ESG related — across jurisdictions, institutions, sectors and industries. The COVID-19 pandemic, in particular, has been an accelerant, not just in terms of growing awareness of sustainability issues but also increasing action.

Consumer interest is also on an upward trajectory, with concern about responsible business and the state of the environment growing during the pandemic, according to WEF analysis, while Google searches relating to sustainable purchasing rocketed 71% between 2016 and 2021.

Research from McKinsey, meanwhile, revealed four-in-five C-Suite executives recognize the growing significance of ESG programs in achieving shareholder value. This is backed up by the growth of so-called sustainable investing, which last year reached an all-time high, according to a Standard Chartered survey. Indeed, estimates from Bloomberg Intelligence for 2021 put the value of ESG and sustainability-related assets at US$41 trillion.

Yet concerns remain over ‘greenwashing’. As the Financial Times highlighted in July, some 42% of global private capital — or $4.73tn — is managed in funds that claim to be run according to sustainable investment principles. Yet major financial institutions — including Deutsche Bank, Blackrock, BNY Mellon and Goldman Sachs, to name a few — have faced accusations over the sustainability credentials of their ESG investing.

It is no surprise, therefore, that there are growing demands for companies to provide robust and verifiable information on their sustainability performance, with investor relations (IR) professionals fulfilling a crucial role in delivering feedback to management and taking action to address communication gaps.

The final installment of the GRI Expert Series on Sustainable Business Leadership offered insights from corporate leaders on how IR is moving to the forefront of sustainability communications, with financial markets and stakeholders, as well as ESG investment stewardship.

The evolving role of investor relations

Traditionally, IR was responsible for consistent messaging to the investment community, alongside monitoring and responding to the opinions of stakeholders regarding the company’s performance. As more and more investors are showing interest in how a business accounts for its impacts, the IR role has expanded to encapsulate communications about ESG as well as financial performance.

As SM Investment Corporation’s IR Consultant Timothy Daniels explained: “For us, integrating sustainability disclosures with IR communications was largely driven by investor expectations. Investor relations is a dialogue, and finding the people whose investment criteria and philosophies are aligned with that of the company means we can build secure, long-term partnerships.”

Belinda Lee, IR Head with City Development Limited (CDL), identified where IR plays a pivotal role in aligning the company’s ESG strategies, performance and reporting: “IR needs to be proactive in providing the necessary disclosures and data, aligning with internationally recognized reporting frameworks, such as the GRI Standards, to demonstrate how they identify risks and opportunities. IR serves as the conduit between investors and the company. IR is the best fit to distil the work of the sustainability reporting team and focus on the main concern for investors.”

From enterprise value to double materiality

The business community has recognized that integrating sustainability in their strategy can be a competitive advantage. As Jerry Goh, Investment Manager at Aberdeen Standard Investments, put it: “investors increasingly see ESG performance as having a material impact on corporate performance, which in turn affects financial performance and the company’s market valuation.”

But how should companies determine their material topics? At GRI, we are clear that a ‘double materiality’ approach is central to how an organization is able to demonstrate accountability for their impacts to a multi-stakeholder audience.

GRI recognizes that reporting on outward socio-environmental factors (impact materiality) need to be given equal position with enterprise value (financial materiality) considerations.

Prevailing assumptions that investor interest sits only with the financial are not being borne out by reality. As Mr Goh shared: “Take the example of a consulting organization whose biggest asset is its employee base. That means talent attraction and retention is a material ESG topic. So, they need to demonstrate that they have effective employee engagement and retention policies, as well as an inclusive corporate culture.”

Improving transparency and credibility

Through the GRI Sector Standards, companies can better address investor expectations by reporting on material ESG topics that may, in time, pose as financial risk to the company. According to Juferson Mangempis, IR VP with Indonesian energy provider Pertamina: “The GRI Standards helped Pertamina realize that sustainability performance has to be measured based on the nature of our operations and our impacts. In the oil and gas sector, disclosures on emissions targets, and progress towards net zero, are always priority areas for investors. How we apply materiality assessment, discussions with stakeholders and assurance are the crucial steps to justify the legitimacy of selecting material disclosures in our report.”

Paul Murphy, Investment Stewardship Director for Vanguard, recommends that companies disclose on the topics that pose a sustainability risk to their business operations. He said: “Sustainability risks, if not addressed, can create substantial financial risks to the company. For example, if a company has material exposure to climate risk, then a plausible and well-articulated story on how it is navigating government and regulatory net-zero targets, including energy transitions and tariffs, should be the focus of their ESG disclosures.”

Translating risk into opportunity

While sustainability reporting can often start out as a compliance exercise, there is growing recognition — from different sectors and jurisdictions — that managing sustainability performance is imperative for a company’s financial wellbeing over the long-term.

Integrating ESG considerations not only helps companies identify and mitigate their risks, but more importantly, it creates innovations that open up business opportunities.

Investors, and other stakeholders, recognize these benefits. And that’s one of the reasons why they are pressing for companies to report on their sustainability impacts. Transparency provides the pathway to accountability and sustainable ways of working — and ultimately, that’s good for the company, for society and the planet.

ABOUT THE AUTHOR

Daniele Coronacion manages implementation of GRI donor-funded programs to advance sustainability reporting in Southeast Asia. Prior to joining GRI in 2022, she was an Associate Director at EY Global Delivery Services — Climate Change and Sustainability. Daniele has completed the Executive Program in Circular Economy and Sustainability Strategies, University of Cambridge Judge Business School (UK). She also holds a BSc in Environmental Planning & Management, and MA in Educational Management, from Miriam College (Philippines).

ABOUT GRI

Global Reporting Initiative (GRI) is the independent, international organization that helps businesses and other organizations take responsibility for their impacts, by providing the global common language to report those impacts. The GRI Standards are developed through a multi-stakeholder process and provided as a free public good.