gssbsecretariat@globalreporting.org

Item 06 – Development of guidance
to identify risks and opportunities
that arise from impacts
For GSSB discussion
Date31 August 2023

Meeting14 September 2023

Description

This exploratory paper aims to seek input from the GSSB on the need to develop
guidance for reporters on how to identify risks and opportunities that arise fromimpacts.

This document has been prepared by the GRI Standards Division and is made available to observers
at meetings of the Global Sustainability Standards Board (GSSB). It does not represent an official
position of the GSSB. Board positions are set out in the GRI Sustainability Reporting Standards. TheGSSB is the independent standard setting body of GRI. For more information visit
www.globalreporting.org.

© GRI 2023

1Contents

2Background ............................................................................................................................................. 3

3Development of the guidance ................................................................................................................. 44

Possible scope of the guidance ........................................................................................................... 4

5

Possible format of the guidance .......................................................................................................... 4

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6Background

7

The Global Sustainability Standards Board (GSSB) has discussed over the course of 2023 the8changing reporting landscape and developed its position on how the GRI Standards relate to other9

reporting standards.

10The GSSB’s view is that most, if not all, of the impacts of an organization will eventually translate into

11risks and opportunities. Furthermore, an organization’s impacts, and the cumulative impacts of

12organizations over time, can also have an effect on the resources and relationships that the13organization depends on. Understanding an organization’s impacts is a necessary first step in

14

identifying risks and opportunities that result from those impacts. The material topics and related

15impacts determined with the GRI Standards therefore provide crucial input for identifying the risks and16

opportunities that arise from an organization’s impacts.

17

These developments have given rise to a demand for practical guidance for reporters on how to use

18

the materiality process based on impacts in GRI 3: Material Topics 2021 to identify related risks and19

opportunities under a financial materiality lens. This is evidenced by the growing demand from20

reporters for such guidance as well as the proliferation of initiatives, from standards setters, non-profit

21

organizations, and commercial services firms to develop similar guidance.

22

The GSSB has made a reservation in the 2023-2025 Work Program for the development of guidance23

to address implementation issues identified by the users of the GRI Standards and it is committed to24

cooperating with global and jurisdictional standard-setting bodies to ensure complementarity and25

interoperability between standards.

26

An invitation has been extended to the International Sustainability Standards Board (ISSB) to develop

27

joint guidance on how reporters can use the GRI 3 materiality process based on impacts to identify

28

related risks and opportunities to report under the IFRS Sustainability Disclosure Standards. The

29

ISSB have advised that the development of such joint guidance is not possible under the IFRS due

30

process as it may extend or contradict the contents in IFRS S1 or S2, as the GRI Standards are not31

one of the specific sources of guidance for identifying sustainability-related risks and opportunities

32

listed in IFRS S1.

33

While joint guidance together with the colleagues of the ISSB continues to be the preferred outcome

34

in principle, the GSSB needs to now assess how guidance on this matter can be developed35unilaterally and/or with other partners. The Standards Division is seeking feedback from the GSSB on36

the development of such guidance, including on the possible scope and format of the guidance.

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37

Development of the guidance

38

Possible scope of the guidance

39

The aim of the guidance would be to explain how GRI reporters can use their existing impact-based

40

materiality process based on GRI 3 to identify related risks and opportunities under a financial

41

materiality lens.

42

The guidance could also consider how the impacts of an organization and the cumulative impacts of

43

organizations affect an organization’s dependencies. An organization’s dependencies on resources44

and relationships are also a source of risks and opportunities.

45

The guidance would be standard-agnostic and enable GRI reporters to identify risks and opportunities

46

related to their impacts for reporting together with any financial materiality or double materiality-based

47

standard.

48

Possible format of the guidance

49

This guidance could be developed as authoritative guidance or non-authoritative guidance.

50

Authoritative guidance is subject to the GSSB’s Due Process Protocol and can take the form of a GRI

51

Standard or a Standard Interpretation, for example by revising or expanding GRI 3.

52

Non-authoritative guidance is not subject to the GSSB Due Process Protocol. Non-authoritative53

guidance is therefore not part of the suite of GRI Standards and as such reporters are not required to54

consult it when reporting in accordance with the GRI Standards.

55

The Standards Division recommends that non-authoritative guidance be developed in a first instance.

56

Developing non-authoritative guidance would allow the GSSB to develop and test the guidance,

57

before deciding whether to integrate it into the GRI Standards.

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