GRI is Dead. Long Live Sustainability Reporting!

13 min readMar 2


By Bill Baue with Ralph Thurm

The Global Reporting Initiative (GRI) is dead.

We came to this painful recognition on a recent call with Global Sustainability Standards Board (GSSB) Chair Judy Kuszewski and Chief of Standards Bastian Buck.

What emerged from the call was clarity on two diametrically opposed perspectives on what sustainability reporting actually is.

  • Our perspective is that sustainability reporting is reporting on sustainability.
  • The perspective Judy asserted is that sustainability reporting amounts to “transparency on impacts” — but, importantly, not interpretation on impacts”.

We believe our perspective comports with common sense: sustainability is the ability for impacts (positive or negative) to persist in perpetuity; so while impacts are facts, the sustainability of those impacts requires interpretative contextualization.

Indeed, the idea that interpreting whether impacts are sustainable or not (i.e. sustainability performance assessment) falls outside the purview of sustainability reporting seems nonsensical on its face.

Sustainability Reporting = Agency & Accountability

GRI’s new definition of “sustainability reporting” emerged in GRI 1: Foundation (2021), which went into effect on 1 January 2023. Section 1.1 (Purpose of the GRI Standards) states:

“Information reported using the GRI Standards can help users assess whether an organization meets … expectations for responsible business conduct set out in authoritative intergovernmental instruments, such as the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises and the United Nations (UN) Guiding Principles on Business and Human Rights… It is important to note that the GRI Standards do not set allocations, thresholds, goals, targets, or any other benchmarks for good or bad performance.” [emphasis added]

As with an expert shell game, the sleight-of-hand that GRI performs is almost imperceptible. On close examination, we can see that GRI abstracts agency and accountability for sustainability performance assessment away from reporters, displacing it to users to implement outside the sustainability reporting process.

In contrast, we believe that a reporting organization has both agency (it can assess its sustainability performance) and accountability (it must assess its sustainability performance), and therefore its enactment of sustainability reporting requires it to assess its sustainability, so it can report if its impacts are sustainable — or not.

We all agree that organizations impact vital capital resources that other living beings also rely on for their wellbeing. So, organizations have accountability to these rightsholders (so-named due to their inherent right of all living beings to wellbeing) — more specifically, fiduciary, moral, ethical, and legal duties and obligations to make sure their impacts are sustainable and to disclose this assessment. If an organization assesses its impacts to be unsustainable, then it is, by definition, derelict in its duties and obligations to uphold (ie not put in jeopardy) rightsholder wellbeing.

Stated differently: organizations are duty-bound to assess (ie interpret) the sustainability of their impacts, so sustainability reporting cannot be limited to providing only the “tools” (ie transparency on impacts) for others (“users”) to determine sustainability status, but rather, sustainability reporting requires the primary actor (the reporting organization) to determine, disclose, and hold itself accountable to its sustainability status.

How can a reporting organization hold itself accountable for ensuring its impacts are sustainable (and not unsustainable), unless it interprets whether its impacts are sustainable or not?

‘Setting’ vs. ‘Providing Guidance’ on Thresholds & Allocations

GRI also erects a straw man to advance a false dichotomy in the final sentence of the section quoted above (which we repeat here for convenience):

“It is important to note that the GRI Standards do not set allocations, thresholds, goals, targets, or any other benchmarks for good or bad performance.”

This rhetorical construction asks us to believe that either 1) GRI sets “allocations, thresholds, goals, targets, or any other benchmarks for good or bad performance,” or 2) it does not.

GRI’s framing omits the correct answer: neither. The appropriate alternative would be: 3) GRI provides guidance and standards for reporters to assess sustainability performance in the context of thresholds & allocations. Reporters generally appeal to thresholds established externally, but applied by the reporter. GRI thus actively refuses to provide reporting organizations with necessary guidance on how to apply thresholds & allocations.

The Integral Role of Performance in the Sustainability Context Principle

What GRI is desperately trying to hide is its radical break from more than two decades of precedent. In its Second Generation (G2) of Sustainability Reporting Guidelines (2002), GRI introduced the Sustainability Context Principle, which established the foundational concepts of sustainability reporting:

“…placing performance information in the broader biophysical, social, and economic context lies at the heart of sustainability reporting…”

“…sustainability reporting draws significant meaning from the larger context of how performance at the organisational level affects economic, environmental, and social capital formation and depletion at a local, regional, or global level…”

“…simply reporting on the trend in individual performance (or the efficiency of the organisation) leaves open the question of an organisation’s contribution to the total amount of these different types of capital…”

“…reporting organisations should consider their individual performance … in the context of the limits and demands placed on economic, environmental, or social resources at a macro-level.”

These concepts remained, largely unchanged, at the core of GRI as it transitioned from providing Guidelines (G2 through G4) to providing Standards. As you see from the Sustainability Context Principle as it appeared in GRI 101: Foundation (2016), it retains the foundational concepts of organizational performance; limits and demands; economic, environmental, and social resources; sectoral, local, regional, or global (ie macro) level; and context.

“Information on performance is expected to be placed in context. The underlying question of sustainability reporting is how an organization contributes, or aims to contribute in the future, to the improvement or deterioration of economic, environmental, and social conditions at the local, regional, or global level. For example, this can mean that in addition to reporting on trends in eco-efficiency, the organization can also present its absolute pollution loading in relation to the capacity of the regional ecosystem to absorb the pollutant.”

“Therefore, the aim is to present the organization’s performance in relation to broader concepts of sustainability. This involves examining its performance in the context of the limits and demands placed on economic, environmental or social resources, at the sectoral, local, regional, or global level.”

GRI Quietly Eviscerates Performance from Sustainability Context

Between then (2016) and the next iteration — GRI 1: Foundation (2021) — GRI replaced the foundational concept of performance, which enabled precise assessment, with the vaguely defined notion of impact devoid of performance assessment.

The test we applied when assessing this new definition of Sustainability Context is whether a reporting organization can follow GRI’s new guidance in a compliant way, yet nevertheless fail to assess its sustainability performance. We believe that GRI’s new Sustainability Context Principle creates just this kind of loophole, as we will demonstrate below.

Here’s the new Sustainability Context Principle in GRI 1: Foundations (2021):

“The organization shall report information about its impacts in the wider context of sustainable development.”

“The objective of sustainability reporting using the GRI Standards is to provide transparency on how an organization contributes or aims to contribute to sustainable development. For this purpose, the organization needs to assess and report information about its impacts in the wider context of sustainable development.”

“To apply the Sustainability context principle, the organization should:

- draw on objective information and authoritative measures on sustainable development to report information about its impacts (e.g., scientific research or consensus on the limits and demands placed on environmental resources);

- report information about its impacts in relation to sustainable development goals and conditions (e.g., reporting total greenhouse gas [GHG] emissions as well as reductions in GHG emissions in relation to the goals set out in the United Nations [UN] Framework Convention on Climate Change [FCCC] Paris Agreement);

- report information about its impacts in relation to societal expectations and expectations of responsible business conduct set out in authoritative intergovernmental instruments with which the organization is expected to comply (e.g., Organisation for Economic Co-operation and Development [OECD] Guidelines for Multinational Enterprises, UN Guiding Principles on Business and Human Rights) and in other recognized sector-specific, local, regional, or global instruments;

- if operating in a range of locations, report information about its impacts in relation to appropriate local contexts (e.g., reporting total water use, as well as water use relative to the sustainable thresholds and the social context of given catchments).”

Note the evisceration of the precision of performance from G2 (2002) though GRI 101 (2016), transplanted by the amorphous term information about its impacts — which is repeated 6 times in the short space of these few paragraphs.

The terms draw on and in relation to further dilute the precision of performance. According to GRI 1, reporters can, in the example it uses, disclose their absolute greenhouse gas (GHG) emissions reductions in relation to the Paris Agreement goals, without contextualizing whether their own performance aligns with a 1.5°C decarbonization pathway / scenario from the climate science — ie, reporters do not need to assess whether their GHG emissions performance is actually sustainable or not.

GRI Sustainability Reporting Guidelines (G2) 2002 p9

Universal Sustainability Performance Definition: Hiding in Plain Sight

In the call, Judy explained that the GSSB deliberated at length over the question of performance, and determined that it could not identify a universal definition of performance (!) that applies to all sustainability reporting contexts.

GRI Co-Founder Allen White has not encountered this problem, as he embraces a quotient-based definition of sustainability performance, as he noted in his Keynote at the United Nations Research Institute for Social Development (UNRISD) Conference kicking off the development of the Sustainable Development Performance Indicators (SDPIs).

“We need to move beyond incrementalist “numeration” indicators and add “denomination” indicators tied to upper (ecological ceiling) & lower (social foundation) thresholds. Sustainability measurement without this context is simply not sustainability measurement.”

Numeration and denomination refers to the Sustainability Quotient, a sustainability performance definition introduced in 2007 in a peer-reviewed article that remains readily available in the literature, and formalized in a doctoral dissertation that survived academic scrutiny (which is also publicly accessible). Both sources define performance succinctly in a way that can be applied universally:

“Sustainability performance (S) is the quotient of actual human impacts on the carrying capacities of vital capitals (A), over normative human impacts on the carrying capacities of the same capitals (N).”

The dissertation provides graphical illustration of this definition of performance.

Source: McElroy, Social Footprints, 2008

The United Nations (UNRISD) embraced this definition of sustainability performance in its SDPIs.

UNRISD Authentic Sustainability Assessment 2022

So, while we respect the veracity of Judy’s claim that GSSB could not find a universal definition of performance applicable to sustainability reporting, we hereby provide extant evidence that such a definition does, in fact, exist — and remains in plain sight.

GRI Standards: Authentic Sustainability Context or Context Lite?

As the appointed time for our call drew to a close, Bastian extended the conversation by insisting that GRI Standards do enact the Sustainability Context Principle, picking up on his pre-call proposal to assess GRI Standards on Tax, Water, and Biodiversity, as compared to the new United Nations Research Institute for Social Development (UNRISD) Sustainable Development Performance Indicators (SDPIs) that we helped develop — which operationalize a performance-based approach to Sustainability Context.

We fully agree with Bastian that the 3 Standards in question do indeed apply GRI’s new definition of Sustainability Context. However, these examples vividly illustrate our point that these Standards fail to apply GRI’s former, longstanding, performance-based definition of Sustainability Context. Therein lies the fatal flaw.

Tax: Revelation or Rationalization of Unsustainability?

Take tax. The UN SDPI Manual includes an indicator (II.B.2) that “assesses the tax gap, measured by the difference between a company’s statutory tax rate (STR) and its estimated effective tax rate (ETR).” In the Appendix, it provides a Measurement methodology consisting of a quotient comparing ETR in the numerator to STR in the denominator, and calls for them to be effectively (95%) equivalent.

GRI 207: Tax (2019), in comparison, calls for disclosure of these same items, using slightly different terms: “Corporate income tax accrued on profit/loss” (ie STR); “Corporate income tax paid on a cash basis” (ie ETR). Then, instead of calling for a direct comparison of the two (as SDPI II.B.2 does), GRI 207 calls for disclosing “reasons for the difference between corporate income tax accrued on profit/loss and the tax due if the statutory tax rate is applied to profit/loss before tax.”

In other words, GRI 207 assumes there will be a difference between taxes accrued and taxes actually paid, but instead of calling on reporters to enact an interpretive assessment of the sustainability of the resulting performance, it invites reporters to rationalize the difference — or, in more plain terms, to explain away their unsustainability (which seems assumed).

We chose to lead with a comparison on tax, because it reveals the nuanced but profound difference between assessing sustainability performance, on the one hand, and providing non-interpretive transparency on impacts, on the other hand. Apparently, rationalization for unsustainability is allowed in GRI’s new definition of sustainability reporting, but interpretation of sustainability performance is forbidden.

To be clear, we agree that GRI should not set sustainability thresholds. However, we believe it is necessary for GRI Standards to provide guidance to reporters on how to apply sustainability thresholds.

Water: Actual or Approximate Sustainability?

What about water? Here, GRI takes an approximation approach, applying the concept of water stress, instead of taking a performance approach. Here’s what GRI 303: Water and Effluents (2018) says:

“Water stress refers to the ability, or lack thereof, to meet the human and ecological demand for water. Water stress can refer to the availability, quality, or accessibility of water.”

“…water stress in an area may be assessed using either of the following indicators and their thresholds:

- The ratio of total annual water withdrawal to total available annual renewable water supply (i.e., baseline water stress) is high (40–80%) or extremely high (>80%);

- The ratio of water consumption-to-availability (i.e., water depletion) is moderate (dry-year depletion, where for at least 10% of the time, the monthly depletion ratio is >75%), high (seasonal depletion, where for one month of the year on average, the depletion ratio is >75%), or very high (ongoing depletion, where the depletion ratio on average is >75%).”

What’s being measured here is “water stress in an area,” not the sustainability performance of the reporting organization itself. In this sense, GRI is contravening its own anti-performance bias, by calling for performance relative to gross approximation thresholds (water stress), instead of precise performance (sustainability of an organization’s water use).

In comparison, here’s what the SDPI Manual says for indicator II.A.3 (Water Use):

“Water use refers to the degree to which the consumption of water resources by an organization is quantitatively sustainable.”

Sustainability Threshold or Norm: Net water consumption at specific locations shall not exceed facility-specific fair, just and proportionate allocations of available renewable supplies.”

As you can see, the SDPI approach to assessing water sustainability is not an approximation compared to “water stress,” but rather an entity-specific assessment of actual sustainability. In other words, the GRI approach only asks reporting organizations to disclose their water use in the general context of water stress in the region; it does not ask reporting organizations to assess if their water use is literally unsustainable.

The UN SDPI approach, on the other hand, essentially prompts the reporting organization to ask itself the question: what if all water users in this watershed used as much water as the proportionate share I’m using — would we collectively overdraw our water supply? Or would we collectively sustain our water resources?

Biodiversity: Where’s the Planetary Boundary Thresholds?

What about biodiversity? Neither GRI 304: Biodiversity 2016 nor the GRI Topic Standard Project for Biodiversity — Exposure draft mention thresholds, nor even the Planetary Boundaries (PBs), despite the fact that biodiversity loss (now labeled biosphere integrity) has been one of the PBs since their introduction in 2009 — and has been the most egregiously transgressed of all the PBs all along.

Stockholm Resilience Centre Planetary Boundaries 2009; 2022

Regretfully, the SDPIs don’t cover biodiversity, because UNRISD limited the indicator areas to those already established in the United Nations Conference on Trade & Development (UNCTAD) Core Indicators. Equally regretfully, amongst the plethora of biodiversity assessment frameworks, none (that we’re aware of) integrate PB thresholds — with the exception of the Biodiversity Performance Index (BPI) prototype. The most requested indicator from companies who piloted the SDPIs was on biodiversity, so this is the first area that UNRISD will need to expand into when it pursues the next iteration of the SDPIs, most likely drawing on the BPI.

The Public Comment Period for the GRI Biodiversity Exposure Draft ends on 28 February 2023. We are opting against submitting a Public Comment, because implementing our recommendations would transgress GRI’s new Sustainability Context Principle and its transparency on impacts, not interpretation of impacts definition of sustainability reporting. So there’s no use in submitting Public Comments that GRI has no option but to ignore.

Systemic Lock-in: No Recourse

The only way to achieve the necessary changes to address all the shortcomings identified above would be to start at the core: revamp GRI 1 to define sustainability reporting as sustainability performance assessment by reporters contextualized vis-a-vis sustainability threshold & allocations. However, having reviewed the GSSB Due Process Protocol (2018) and Draft GSSB Work Program 2023–2025 for public consultation, we see no formal mechanism for engaging on the question of revising the Universal Standards and GRI 1 in particular. It seems that GRI lacks a Formal Grievance process or any other mechanism for adjudicating concerns that fall outside the boundaries of its public engagement programs.

So although GRI is a not-for-profit that serves the public interest, it apparently lacks a mechanism for the public to hold it accountable to the public interest broadly.

Improving Sustainability Reporting … or Killing it Off?

Perhaps the most contentious aspect of our call with Judy and Bastian was their assertion that the changes GRI has made represent progress for sustainability reporting. We countered that the extant evidence clearly demonstrates the opposite: the changes that GRI has made most recently have hammered the last nail in the coffin in GRI as a standard-bearer for authentic sustainability reporting.

To riff on an ancient saying: GRI is dead. Long live sustainability reporting.

Of course, we don’t mean literally dead: GRI will continue to exist for the foreseeable future, and will provide useful “transparency on impacts,” as Judy asserted — but devoid of guidance on how to assess sustainability performance.

What we mean is that GRI is dead as a sustainability reporting standard. So, it’s time to grieve GRI as it was originally conceived, and to take up the mantle of revitalizing the practice of bona fide sustainability reporting for the common good preservation and thriving of all living beings and our planet.




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