The European Financial Reporting Advisory Group (EFRAG) and the Global Reporting Initiative (GRI) announced today a new cooperation agreement to deepen cooperation on sustainability reporting, including plans to collaborate in areas including reporting standards development and training.
The announcement marks the second collaboration agreement between EFRAG and the GRI, following an initial agreement launched in 2021 for the development of EU sustainability reporting standards and supporting convergence with global standards.
The organizations, as part of the new collaboration agreement, also released a GRI-ESRS Interoperability Index, a new tool outlining how the disclosure requirements and data points in the European Sustainability Reporting Standards (ESRS) and the GRI standards relate to each other, preventing the need for “double reporting” for entities disclosing under both systems.
The ESRS, developed by EFRAG, and officially adopted by the European Commission in July, set out the rules and requirements for companies to report on sustainability-related impacts, opportunities and risks under the EU’s upcoming Corporate Sustainable Reporting Directive (CSRD). The CSRD, on track to begin applying from the beginning of 2024, will significantly expand the number of companies required to provide sustainability disclosures to over 50,000 from around 12,000 currently, and introduce more detailed reporting requirements on company impacts on the environment, human rights and social standards and sustainability-related risk.
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 GRI published a major update of the standards in 2021, and recently published new proposed climate change and energy reporting standards.
Patrick de Cambourg, Chair of EFRAG Sustainability Reporting Board, said:
“Interoperability is at the heart of the EU approach. From the beginning and going forward EFRAG strives to build on and contribute to the global progress of quality sustainability reporting as well as to minimise the reporting burden for companies. With the recently adopted ESRS, companies will be able to prepare their sustainability statement in an interoperable ecosystem and this is good news.”
Under the new agreement, EFRAG and the GRI will collaborate in areas including standards and guidance development for both existing and new sector standards, proportionate reporting for SMEs in the EU, and on standards for non-EU companies for which the CSRD will apply. The organizations will also work together on education and training for ESRS preparers and users – including steps to accredit GRI as an ESRS training organization – as well as on the interoperability of digital XBRL taxonomies, with a simplified tagging system and digital correspondence table between both standards.
Eelco van der Enden, CEO of GRI, said:
“The partnership between GRI and EFRAG has already borne fruit by ensuring that the new EU standards and the GRI Standards – which many companies in Europe and beyond are using to report their impacts — are closely aligned. Encompassing practical resources and training alongside deeper engagement on standards, this new MoU reassures companies and all stakeholders of our joint commitment to an aligned, efficient, and feasible EU and global ecosystem for impact reporting.”
The launch of the new interoperability index follows the organizations’ confirmation in September that they have achieved a high level of interoperability between the ESRS and the GRI Standards. With the publication of the index, the organizations said that entities reporting under ESRS will be deemed reporting ‘with reference’ to the GRI standards and existing GRI reporters will be able to leverage their current reporting efforts to prepare their ESRS ‘Sustainability statement.’
Carol Adams, Chair of the GRI Global Sustainability Standards Board (GSSB), said:
“The interoperability index is an important deliverable of our collaboration as it will enable GRI reporters to substantiate the high degree of alignment between GRI and ESRS standards in relation to impacts. Building on our technical collaboration over the past two years, we welcome this new agreement.”