Barbara Strozzilaan 336
1083 HN Amsterdam
The Netherlands
gssbsecretariat@globalreporting.org

Item 01 – Draft summary of the GSSB
meeting held on 5 November 2020
For GSSB approval
Date

20 November 2020

Meeting

3 December 2020

Description

This document presents the summary of the GSSB virtual meeting held on 5
November 2020.

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 2020

1

ContentsParticipants.............................................................................................................................................. 3
List of abbreviations ................................................................................................................................ 3
Action items ............................................................................................................................................. 4
Session 1: Welcome ............................................................................................................................... 4
Session 2: GRI Universal Standards Project update: Key concepts ...................................................... 4
Session 3: Any other business and close of meeting ............................................................................. 8

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2Participants

3

Present:456

Name

Constituency

Judy Kuszewski

Chair

Robyn Leeson

Vice-ChairLoredana Carta

LaborPeter Colley

Labor

Kirsten Margrethe Hovi

Business enterprise

Vincent Kong

Business enterpriseRama Krishnan Venkateswaran

Investment institution

Joseph Martin

Business enterprise

Tung-Li (Tony) Mo

Civil society organization

Jennifer Princing

Business enterprise

Corli le RouxMediating institution

Gustavo SinnerMediating institution

Kenton Swift

Civil society organization

Michel Washer

Business enterprise

Apologies:
Name

Constituency

Evan Harvey

Investment institution

In attendance from GRI:
Name

Position

Bastian Buck

Chief of Standards

Laura Espinach

Head of Technical Development

List of abbreviations
IFRS
GSSBSDInternational Financial Reporting Standards
Global Sustainability Standards BoardStandards Division

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7Action items
GSSB
Session 2•

GSSB to communicate to the SD any further issues
from the public comment feedback on the key
concepts section of the Universal Standards exposure
draft that it would like discussed at future meetings.

•GSSB to communicate any issues arising from thepublic comment feedback relevant to the meeting on
19 November 2020 by close of business on 17
November.

•SD to pursue Scenario 2 (see Session 2 summary) asa strategy, and to explore how this can be elaboratedin the Universal Standards.

•SD to liaise with the Chair and other colleagues toproduce an article elaborating some of the issues
arising from the public comment feedback, and GRI’s
activities in this regard.

Standards Division
Session 2

8Session 1: Welcome

9GSSB Chair Judy Kuszewski (henceforth the Chair) welcomed the GSSB and presented an overview

10of the meeting agenda.

11

Session 2: GRI Universal Standards

12

Project update: Key concepts

13

The GSSB was presented with Item 01– Public comments on key concepts in the Universal

14Standards exposure draft for information.

15

The Standards Division (SD) presented the GSSB with an overview of the public comment feedback16

on key concepts in the Universal Standards exposure draft and identified three issues for further

17

discussion: double materiality, stakeholder engagement, and greenwashing.

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18

Double materiality

19

The SD presented the perspective of the EU Non-Financial Reporting Directive on double materiality

20

and the perspective of the International Financial Reporting Standards (IFRS) on the relationship21

between sustainability reporting and financial reporting. The SD gave its assessment on this22relationship and suggested viewing the relationship taking the overall future of reporting into account.

23

Financial reporting is made up of financial statements and other financial reporting. Other financial

24

reporting is information outside the financial statements that assists in the interpretation of the25

financial statements or improves users' ability to make better economic decisions. Information from26

sustainability reporting provides one form of input for identifying the financial risks and opportunities

27

discussed in other financial reporting.

28

Several GSSB members expressed that the double materiality approach was not an appropriate way

29

forward for GRI. GSSB members mentioned that all outward impacts of a company have inward

30

financial consequences for the company, and suggested that the focus of GRI should not be to31

disassociate sustainability reporting from financial reporting but, as recommended by the SD, to32emphasize how sustainability reporting can feed information into the financial materiality process and33

financial reporting.

34

A GSSB member raised a concern that disregarding the company’s economic sustainability in the35sustainability reporting process would leave GRI open to criticism that it is unconcerned about the36

inward financial impacts resulting from a company’s outward impacts. The member also noted that37

GRI appears to be ceding substantial territory to others. Another GSSB member commented that38

sustainability reporting in itself is not enough for an organization to take long-term strategic decisions;39

information covered in other financial reporting is essential. GRI needs to decide how it wants to align40

itself with other standard setters in this area, to contribute to building a bridge between an41organization’s outward impacts and internal strategic needs.

42

The SD explained that it did not intend to suggest that there is no connection between an43

organization’s contribution to sustainable development and the longevity of its business model. While44

financial reporting is not currently part of the Standards, the SD is becoming increasingly aware of the45

need to explain the relevance and financial implications of an organization’s outward impacts for the46organization’s financial health.

47

A GSSB member suggested that given that most outward impacts have an inward financial impact on

48

a company, a collaborative approach is needed to reach a common understanding of the relationship49

between the different types of reporting. The Chair also highlighted the opportunity for GRI not only to50

strengthen its own Standards, but to contribute to ongoing public debate on the relationship between

51

sustainability reporting and financial reporting.

52

A GSSB member commented that explanations of the relevance of sustainability reporting to business

53

would be welcome given the present public debate on the matter, and that the GRI is well-placed to54

do this. Another member suggested that when defining impact in the Universal Standards, it isPage 5 of 8

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beneficial to be mindful of how it translates into the financial language around risk and opportunities,

56

and that there is also an opportunity to experiment with this in early work on the Sector Standards.

57

The member also pointed to the public comment feedback in favor of greater use of graphics in

58

explaining concepts such as materiality.

59

Proposed scenarios

60

The SD proposed two scenarios for the GSSB’s consideration regarding GRI’s task and role within61

the overall future of reporting:62•

organizations’ outward impacts

63
64
65

Scenario 1: GRI Standards incorporate disclosure of financial risk resulting from

•Scenario 2: Information reported through GRI Standards feeds into organizations’ otherfinancial reporting

66

The SD emphasized that a core assumption of Scenario 2 is that GRI will play a more active role in67

explaining the importance of sustainability reporting as a key input for financial risk assessment, and68

in collaborating more actively with counterparts in developing ways to feed sustainability reporting into69

other financial reporting.

70

A number of GSSB members spoke in support of Scenario 2, but stressed the importance of GRI’s

71

undertaking to make the value of sustainability reporting clearer to the financial community, and to72

more actively collaborate with counterparts. One GSSB member commented that while it was easy to73

identify that aspects of sustainability can have an inward financial impact on a company, this is74

extremely difficult to quantify. Scenario 2 offers a better option, because financial quantification of risk

75

is often purely speculative, and to enter into that field would result in endless debate.

76

A GSSB member requested clarification as to whether Scenario 2 means maintaining what has been77

proposed in the Universal Standards exposure draft. The SD confirmed that while the current direction

78

will be maintained, GRI acknowledges the feedback and will strengthen its efforts in explaining how

79

the information derived from sustainability reporting is a key input for financial risk assessment and for80

other financial reporting. The SD will also examine options for how this can be elaborated in the81

Universal Standards.

82

The Chair pointed to GRI’s ongoing dialogue with standard setters involved in other financial

83

reporting, and its keen interest in exploring practical aspects of joint standard-setting activities as part84

of its strategy.

85

The GSSB’s support for scenario 2 was inferred by consensus.

86

Stakeholder engagement

87

The SD gave its assessment of the public comment feedback pertaining to stakeholder engagement.

88

The SD recommended maintaining what has been proposed in the Universal Standards exposure

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draft, but clarifying the importance and role of stakeholder engagement in the process to identify an90

organization’s most significant impacts more prominently within GRI 101.

91

A number of GSSB members expressed agreement with the SD’s assessment and recommendations.

92

One GSSB member commented that the SD’s assessment of feedback and revisions addresses an93

earlier concern that reporting organizations might cherry-pick stakeholders to determine what is94

material. The member further raised the issue of distinguishing between stakeholders that have rights

95

and those that have interests, and questioned whether the Universal Standards conflated rights with

96

interests. The member suggested further discussion with the SD to examine if and how the two need97

to be separated.

98

The SD confirmed that the issue of rights and interests was scheduled for discussion by the Human99

Rights Technical Committee in December, and that the SD would subsequently propose a solution to100

the GSSB.

101

Greenwashing102

The SD gave its assessment of the public comment feedback regarding the risk of greenwashing,103

pointing out that the changes proposed in the exposure draft added rigor to both Universal Standards104and Sector Standards to reduce greenwashing. The SD suggested that the GSSB may consider

105

adopting a comply or explain approach to Sector Standards (this is scheduled for discussion in106

December).

107

A GSSB member acknowledged that greenwashing is always a risk, but commented that it wasn’t a108

particularly significant risk in this context, and awaited more detailed discussion at a later meeting.

109

Next steps

110

The SD invited the GSSB to communicate any further issues from the public comment feedback that it111

would like presented at future meetings.

112

The Chair recommended producing an article or other public communication to elaborate some of113

GRI’s activities that address the issues arising from the public comment feedback regarding the114

relationship between sustainability reporting and financial reporting.

115

The SD presented a schedule of theme-related discussions to be held with the GSSB through116

November and December.

117

Actions

118•

GSSB to communicate to the SD any further issues from the public comment feedback on the119

key concepts section of the Universal Standards exposure draft that it would like discussed at120future meetings.

121122•GSSB to communicate any issues arising from the public comment feedback relevant to themeeting on 19 November 2020 by close of business on 17 November.

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•124
125

SD to pursue Scenario 2 as a strategy, and to explore how this can be elaborated in theUniversal Standards.

•SD to liaise with the Chair and other colleagues to produce an article elaborating some of the126

issues arising from the public comment feedback, and GRI’s activities in this regard.

127

Session 3: Any other business and128

close of meeting129

No other business was raised and the Chair close the meeting at 14.35 CET (Central European130Time).

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