gssbsecretariat@globalreporting.org

Item 03 – GRI Topic Standard Project
for Economic Impact – Draft project
proposal
For GSSB discussion and approval
Date

1 June 2023

Meeting

15 June 2023

Project

GRI Topic Standard Project for Economic Impact

Description

This document sets out the draft project proposal to review the GRI Topic
Standards portfolio on Economic Impact. For GSSB discussion and approval tosend to the GRI Board and Stakeholder Council for feedback.
After feedback from the GRI Board and Stakeholder Council has been received
and incorporated, the Standards Division will present the proposal to the GSSB for
final approval in accordance with the Due Process Protocol.
Please note: this project proposal will be discussed during the GSSB meeting on
15 June 2023. Pending potential amendments based on the GSSB discussions,the project proposal will be submitted for approval through a documented
electronic process as per the GSSB Terms of Reference after the GSSB meetingon 15 June 2023.

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. The GSSB is the independent standard setting body of GRI. For more information visit
www.globalreporting.org.

© GRI 2023

Contents
Project background ................................................................................................................................. 3
Project objectives .................................................................................................................................... 4
Project approach ..................................................................................................................................... 6
Division of responsibilities ....................................................................................................................... 7
Timeline ................................................................................................................................................... 8
Assumption and risks .............................................................................................................................. 8

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Project backgroundAs part of the draft GSSB Work Program 2023-2025, the Global Sustainability Standards Board(GSSB) has identified the review of GRI disclosures on economic impact, including, but not limited to,
the revision of GRI 201: Economic Performance 2016, GRI 202: Market Presence 2016, and GRI 203:
Indirect Economic Impacts 2016 for commencement in 2023. The revision of these standards wasprioritized by the GSSB in the previous work program based on the feedback of reporters and otherusers. Feedback indicated that the current disclosures are unclear and inconsistently interpreted andwould benefit from a thorough content review.
Since the disclosures in GRI 201, GRI 202, and GRI 203 were last updated in 2006 (with the
publication of the GRI G3 Guidelines), there have been a number of international developments
related to how organizations should identify, manage, and report on their impacts on the economy.
Economic growth and resilience are key themes in the UN’s 2030 Agenda for Sustainable
Development. Both governments and private sector organizations are being called upon to realize
SDG 8 and SDG 9. SDG 8 focuses specifically on decent work and economic growth, and it aims topromote sustained, inclusive, and sustainable economic growth, full and productive employment, anddecent work for all.1 While SDG 9 seeks to build resilient infrastructure, promote sustainableindustrialization, and foster innovation.2
In addition, the UN Guiding Principles on Business and Human Rights 3 and the OECD Guidelines forMultinational Enterprises4 set clear expectations for businesses to take responsibility for the impacts
they cause and those they contribute to or are linked to their business relationships. In the context of
GRI’s economic disclosures, organizations are expected to report their direct impacts on the economy
and those they are linked to, for example, their supplier relationships.
Together, these developments suggest that the content in GRI’s economic standards would benefit
from a comprehensive review to ensure they align with key international instruments and reflectleading practices in disclosure.

1 https://www.un.org/sustainabledevelopment/economic-growth/
2 https://www.un.org/sustainabledevelopment/infrastructure-industrialization/
3 https://www.ohchr.org/sites/default/files/documents/publications/guidingprinciplesbusinesshr_en.pdf
4 https://www.oecd.org/daf/inv/mne/48004323.pdf

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Project objectives

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The primary objective of this project is to review the existing portfolio of GRI economic impact
disclosures and develop a set of new disclosures and standards that represent internationally agreed
best practices. The revision must also align with the recent developments and relevant authoritativeintergovernmental instruments in the field of economic impact.

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It is also the right moment to start the revision of the economic impact-related disclosures to ensurealignment and consistency with the ongoing revision of the labor and climate change-related
disclosures.

The content and structure of the revised economic impact-related GRI Standards will be guided by thetechnical framework proposed by the GRI Standards Division (see Table 1). This overarchingframework has been designed as an organizing tool for accommodating current and future
disclosures related to economic impact.
In line with the stated objectives, the proposed project will consider the following GRI Standards forrevision:
•
•
•
•
•
•
•

GRI 201: Economic Performance 2016
GRI 202: Market Presence 2016
GRI 203: Indirect Economic Impacts 2016
GRI 204: Procurement 2016
GRI 205: Anti-Competitive Behavior 2016
GRI 206: Anti-Corruption 2016
GRI 415: Public Policy 2016

The following disclosures and standards within GRI’s current economic disclosures series will not be
considered for review or revision as part of this project:•••

GRI 202: Market Presence 2016 (Disclosure 202-1: Ratios of standard entry-level wage by
gender compared to local minimum wage). This will be addressed as part of the ongoing
revision of the labor-related GRI Topic Standards.
GRI 201: Economic Performance 2016 (Disclosure 201-2: Financial implications and otherrisks and opportunities due to climate change). This will be addressed as part of the ongoing
revision of the climate-related GRI Topic Standards.
GRI 207: Tax 2019. This Standard was recently developed and published in 2019 and will
only form part of additional project phases.

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Table 1: Technical Framework for Economic Impact Disclosures

Impact driver

Description

ImpactLink to GRIStandards

Distributedvalue

The economic impact ofmonetary and nonmonetary flows of value
involving an organization

The value created, received, and distributed by anorganization can affect the public fiscus as well as
the ability of shareholders, workers, suppliers, andlocal communities to operate sustainably.

Impacts on
institutions

The impacts anorganization has on themechanisms that rulemarket relations andeconomic exchanges

Individual organizations operate under rules andregulations but can also influence them. Larger
organizations are more likely to find these types ofimpacts material. These can be through market
mechanisms (anti-competitive behavior) or throughrules and regulations (public policy, anti-corruption).

Economic
multiplier

The secondary effects ofa company's activities thatripple through theeconomyJob creation

The economic impact ofan organization's
operations on the creationof sustainable economic
opportunities andlivelihoods

Goods andservices

Economic Impacts directly
attributed to consumptionof, or the inability toaccess and use, theorganization's goods andservices.

Indirect and long-term effects that an organizationor an activity has on the broader economy beyond
its direct impact.

This is a key component for sustaining economic
growth and creating opportunities for individuals tofind work and can provide greater insight into
medium and longer-term impacts on the economy.

Goods and services produced by organizations can
add value to an economy by improving people´soverall well-being and productive capacity, while theopposite can be true where people may be unable
to access or use certain goods and services orwhere the use of such goods and services may
have negative impacts on society.

GRI 201,
GRI 207

GRI 205,
GRI 206,
GRI 415

GRI 203,
GRI 204

GRI 202,
GRI 401,
GRI 404

Not
currently
covered in
GRI
Standards

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Project approach

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Due to the project's large scope and complexity, the Standards Division proposes adopting a
programmatic approach. A programmatic approach allows grouping the related topics and content
areas into several projects. This portfolio of discreet projects will be run sequentially, although at
certain points, more than one project will be simultaneously active. The configuration of the project
sequencing will be based on the content area, resource capacity, and strategic importance. In thisway, the Standards Division will use a programmatic approach to deliver an aligned set of standards
and disclosures as the outcome.

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As part of this approach, the Standards Division proposes reviewing and revising the current
Standards and disclosures across three distinct project phases. Each project phase will represent a
standalone project with its focus area(s), timelines, and deliverables in accordance with GRI’s due
process. The prioritization of technical content to be revised across phases has been informed by
inputs from the GSSB, usage trends among practitioners of GRI Standards, and research insightsfrom authoritative intergovernmental instruments and initiatives.

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The following provides an overview of each project phase.

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Phase 1: Distributed value

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The first phase of the project will encompass the theme of Distributed value. The Standards Division
will review and, where appropriate, revise GRI 201: Economic Performance. This theme will beprioritized due to the Standard being one of the most widely reported GRI Standards, particularly
Disclosure 201-1 (Direct economic value generated and distributed), which suggests there is external
demand and usage by reporting organizations. This content area also has the advantage of theconcepts already being well-developed and self-contained, meaning revision to the disclosures canoccur without affecting other standards.

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Furthermore, revision of this Standard as part of the project's first phase will enable alignment with theongoing revision of the climate-related standard, which will substitute Disclosure 201-2 (Financial
implications and other risks and opportunities due to climate change).

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The Standards Division also envisions the GRI 201: Economic Performance Standard playing acentral role in linking financial information reported by organizations with material impacts reported inother standards, creating a comprehensive and holistic set of information on an organization’ssustainability impacts.

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Phase 2: Impacts on institutions

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The second phase of the project will explore the theme of Impacts on institutions. The need for therevision of GRI 205: Anti-corruption 2016 and GRI 415: Public Policy 2016 has been raised by several
stakeholders, suggesting a growing interest in revised disclosures focusing on an organization’s
operations and activities which impact the institutions that govern economic exchanges.

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As part of this theme, the Standards Division will review and, where appropriate, revise GRI 205: Anticorruption, GRI 206: Anti-competitive behavior, and GRI 415: Public policy. The Standards Division
proposes to maintain these three standards, and others that could potentially be developed in thisspace, as separate standards as they are likely to be identified as distinct issues in the materiality
process of organizations.

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Phase 3: Economic multiplier, Job creation and Goods and Services

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The project's third phase will explore the Economic multiplier, Job creation, and Goods and Services
themes.

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The configuration and timing of Phase 3 remains tentative at this stage as further research is required
to clearly define new concepts, such as the economic impacts associated with innovation, the creationof livelihoods, and the access and usage of goods and services. Further detail will be presented to the
GSSB nearer to the proposed project kick-off.

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Stakeholder feedback points to a rise in interest by both organizations and report users related tosustainability impacts beyond organizations' boundaries, in particular, impacts on local communities
and along the organization’s value chain.

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As part of the Economic multiplier theme, the Standards Division will review and, where appropriate,
revise the existing GRI 203: Indirect Economic Impacts and GRI 204: Procurement standards. The
Standards Division will also consider, as part of the Economic multiplier theme, the addition of newtechnical content covering the sustainability impacts of an organization’s innovation and research anddevelopment activities on the economy. This is viewed as an important issue and will address the gap
in the GRI Standards.

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The Job creation theme is included in Phase 3 as it complements the Economic multiplier theme. The
impact of an organization’s operations and activities on local labor markets through the creation ofsustainable economic opportunities and livelihoods - both through its own operations and its direct
suppliers - is noted as key for helping organizations to understand their direct and indirect impacts on
the economy. Furthermore, including the Job creation theme as part of the project's second phase will
enable alignment with the ongoing revision of the labor-related standards, incorporating Disclosure202-1 (Ratios of standard entry-level wage by gender compared to local minimum wage).

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The Goods and Services theme requires further conceptual development by the Standards Division
as it currently does not feature in any GRI Standards. The Standards Division will undertake further
research before finalizing the inclusion of this theme.

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Division of responsibilities

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The GSSB will appoint two working groups (WG) to review the economic impact-related Topic
Standards.
The working groups will be formed in accordance with the GSSB Due Process Protocol to provide
technical advice across the project's three phases and inform the development of the new disclosuresand standards as stated in the project objectives.
The Standards Division proposes the formation of two working groups that will contribute to particularphases of the project as follows:••

WG 1 will be convened ahead of Phase 1 to support Phase 1 and Phase 2 of the project.
WG 2 will be convened ahead of Phase 3 to support Phase 3 of the project.

The Standards Division proposes this working group configuration for the following reasons:•

The project scope would require extended time investment and engagement by WG members
if a single group was maintained across the entire project lifecycle. Two working groups withalternating members will ensure that the level of engagement by WG members is preserved
across each phase of the project.
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•

The nature of the content covered in Phase 1 and Phase 2 means that WG members'
technical expertise in similar areas can be effectively utilized. This approach will also allow forcontinuity across the project's first two phases.

The two working groups will provide recommendations in the following areas:
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Informing the scope of the projects across each phase.
Developing new disclosures to broaden the scope to include new impact areas such as R&D,
innovation, living wage, and economic impact along the organization’s value chain.
Revising and/or incorporating the existing economic impact-related disclosures: GRI 201:
Economic Performance 2016, GRI 202: Market Presence 2016, GRI 203: Indirect Economic
Impacts 2016, GRI 204: Procurement, GRI 205: Anti-Competitive Behavior, GRI 206: AntiCorruption and Disclosure 415-1: Political contributions (currently captured in GR415: Public
Policy) into the new set of economic standards and disclosures.
Ensuring new economic impact-related disclosures are revised and developed to align withthe most updated authoritative references and other global standards setters.

Economic impacts is a broad topic and requires a broad range of expertise. Therefore a public call forexperts will be launched, and based on GSSB approval, working groups will be formed to provide
technical advice for developing the economic impacts related Topic Standards.
In line with the Due Process Protocol, the working groups should report to the GSSB and seek
guidance and advice whenever required to advance the revision program or when they cannot reacha consensus. When the working groups are satisfied that they have a proposed (set) of draft
standard(s) that are ready for public consultation, the draft(s) are to be presented to the GSSB for
approval.
The working groups should support sustainability reporting as promoted by the GRI Sustainability
Reporting Standards (GRI Standards), which provide transparency on how an organization
contributes or aims to contribute to sustainable development. The Standards Division will draft the
Topic Standards. The project will be conducted in accordance with the GSSB Due Process Protocol.

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Timeline

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This project is envisioned to commence in September 2023. Table 2, on the following page, outlines
the anticipated project duration. The exact starting date and the predicted dates of other key
milestones will be confirmed in the final project proposal to be approved by the GSSB.

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Assumption and risks

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The success of this project proposal is based on an assumption and the management of risks thatprovide the foundation for its implementation. The assumption and risks have shaped the project's
scope, timeline, and expected outcomes.
The Standards Division has made the following assumption:•

The timely recruitment and successful integration of key positions in the Standards Division
required to provide support in the implementation of project-related tasks (see Division of
responsibilities, including project administration, research, development of technical content,
and project management) and achievement of project objectives. Should it not be possible torecruit a sufficient number of qualified candidates within the desired timeframe to meet the

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project’s staffing requirements, an amendment of the project's proposed timelines may benecessary.
The Standards Division recognizes the importance of this assumption and its potential impact on
project timelines and deliverables. To mitigate risks associated with recruitment and the availability of
project resources, the Standards Division has adopted a proactive recruitment strategy and isengaging reputable recruitment agencies to attract and onboard a diverse pool of qualified
candidates.
In addition to the above assumption, the Standards Division has identified potential risks that may
impact the successful execution of the project. The following risks have been identified:••

Due to the proposed length of the project, there is a possibility of unforeseen shifts indemand by organizations for disclosures to report on their economic impacts. This may
necessitate a change in prioritizing certain themes for review and revision.
New authoritative intergovernmental instruments and frameworks may be emerging,necessitating adjustments to the planned revision and development of technical content or an
extension of the research phase.

To mitigate these risks, the Standards Division will implement the following strategies:•••

Establish a flexible and adaptive project framework that allows for iterative development andaccommodates potential changes in technical content.
Maintain close collaboration with subject matter experts, stakeholders, and end-users to stay
updated on emerging developments and evolving needs.
Conduct periodic reviews and assessments of the technical content against the evolving
industry standards and best practices to ensure alignment. Incorporate feedback and insightsfrom relevant experts to ensure the proposed project content remains current and relevant.

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gssbsecretariat@globalreporting.org

Table 2: Estimated duration of Topic Standards portfolio for economic impact

Note: Phase 3 schedule tentative. Further detail to be provided closer to project kick-off.