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Updated GRI Standards:
Bringing a new perspective

The updated 2021 GRI Standards change how organisations consider material topics with a focus on impacts.  Boards, executives and managers wanting to progress business sustainability can welcome the changes because they enable much greater insight into the impact return on effort invested. 

GRI update - fresh perspective

A refreshed approach to materiality: impact focus

In 2022, we welcomed the opportunity to help several forward-looking clients report in accordance with the updated GRI methodology. From 1 January 2023, entities must follow this if they are reporting in accordance with GRI. We're sharing our insights and lessons learned in the hope that they will help others along the way.

The updated GRI Standards introduce a new approach to materiality (GRI 3:Material Topics 2021). GRI retains its Topic Standards, such as GRI 302: Energy, and introduces entire Sector Standards, including GRI 13 for Agriculture, Aquaculture and Fishing. The Topic Standards and the Sector Standards work together with the revised approach to materiality. 

Kat McDonald, our sustainability reporting lead at Proxima sees the update as helpful for business to understand their impacts better.


"Helpfully, the update focuses on both negative and positive impacts. It invites more detail for understanding the significance of impacts and how organisations address them. It also aligns with the emerging practice in impact reporting by specifically considering the scale and scope of impacts." 

We encouraged Proxima clients to take an early lead in using the updated GRI Standards. Meridian, Contact, Transpower, Precinct Properties, Fletcher Building, Tower and Property for Industry all stepped up. For their annual reports, they committed to reviewing, revising and updating their material topics and reporting approach to adopt the new standards early.


The updated GRI delivers more meaningful and objective insights to support better decision-making


GRI's updated approach is more objective. Before, broad material topics were largely determined by an organisation's stakeholders, who naturally brought some vested interests and biases. Now, independent experts and objective data play a bigger role in assessing a full range of specific negative and positive impacts.

The refreshed approach is also more specific, moving from broad topics to assessing specific impacts. Kat McDonald sees this as a positive for annual reporting audiences.


"Report readers can expect more granularity on impacts and how they are being addressed with the requirement to disclose these details. For example, in Meridian's 2022 report, you'll see a much longer list of topics with a summary of how those impacts are being managed."

Determining the significance of different impacts is clearly articulated. Now, GRI 3 has a detailed method for prioritising or scoring impacts with three measures: scale (how grave / beneficial an impact is), scope (how widespread the impact is), and irremediability (how easy it is to rectify the harm caused).  For potential impacts, a factor of likelihood is included.


Putting nature and people at the heart

GRI differentiates itself from other reporting standards, such as IFRS / ISSB, SASB and <IR>, in the way it emphasises the importance of an organisation's outward impacts on people, nature and the economy. 

This is significant because it acknowledges the implicit rights of nature and people to be free of harm from economic externalities. Priority is placed on protecting human rights which will include issues like modern slavery or indigenous relationships to their land.

Materiality that looks both ways and ahead


GRI applies the so-called 'double materiality' concept . It allows organisations to report on both the impacts they cause as well those that affect them externally, which may affect a business' future potential to create value. As a result, changing climate or consumer preferences are considered. 

GRI's approach explicitly acknowledges that although some impacts may not be financially material today, they may still present a significant impact on people or the environment, which also means they may well be financially material in the future. We know this is important information for stakeholders and helps organisations anticipate future risks — those that may arise as regulations or societal expectations change or as new research or media coverage highlights new issues.  

double materiality

Proxima's insights

Here are our thoughts based on our work with the updated Standards.

Benefits of a comprehensive approach: at least for the first time using the updated Standards for reviewing material impacts, mapping an organisation's full value chain is really valuable.  This helps highlight all relevant relationships with people, communities, nature and the economy as well as the flows of materials and energy to reveal the main impact areas.  That analysis then helps inform which areas you might want to target specific experts to more deeply understand the current and future significance of impacts.

We also mapped all current and planned initiatives against each impact area. This means our clients now have a full list of what's being done to address or progress each impact area. Meridian used this information to good effect in its annual report, providing transparency and detail about the company's response to all material impact areas.

Use the opportunity to raise staff awareness: staff and team input to the materiality assessment is, of course, really useful.  However, as well as gathering their views on what they see as most important, an impact approach can really help raise visibility and awareness of a full range of impacts - including some that may not be top of mind for them. 


We also found it really useful to ask staff which impacts (either positive or negative) their organisations don't talk about enough, and the reasons for that.

GRI 3 updates align with future-fit outcomes:  with the focus on a full range of sustainability impacts, we found it useful to use the Future-Fit Business Benchmark's holistic 23 Break Even Goals and 24 Positive Pursuits to check for gaps.  This was a helpful way to identify and articulate specific and distinct impacts by considering their measurability.  For example, the full range of impacts relating to the operational presence of businesses are often overlooked. Yet, these impacts are increasingly important to maintain a healthy local 'social licence'.

GRI's impact focus helps integrate material topics with strategy and value creation: identifying both positive and negative impacts provides a much easier platform for integrating material impacts into strategy discussions.  The comprehensive view of impacts showed more clearly than ever how sustainability issues cut across a whole organisation rather than just being something for sustainability teams. And more independent expertise provided fresh and unbiased perspectives, highlighting opportunities, and challenges.


Often, the big positive impacts, like renewable energy generation for Contact and Meridian, sit at the core of business strategy.  Other positive impacts are often, in reality, benefits of mitigation strategies to address negative impacts.  GRI's focus on impacts puts real emphasis on the question about how to maximise positive impacts whilst minimising and eliminating the negative ones. 

The impact evaluation approach, using a data and evidence based approach, did result in some negative impacts being scored lower or higher than where they had previously been ranked.  This change in the significance reinforced the limitations of relying on stakeholder opinions. Stakeholders are often less informed on a broad range of issues or unaware of the severity of sustainability impacts outside their own area of focus.


Ranking impacts is about both calibration and gut feel: scoring the significance of quite different impacts is hard.  We spent quite some time working out how to calibrate a scoring approach for the GRI 3 significance criteria to enable social, economic and environmental impacts to be scored in a way that was comparable; and we're still improving that process. 


Ultimately, we found it was vital for the client to really own and apply the scoring and ranking of impacts.  Even with a calibration methodology it was still necessary to apply some gut feel decisions to complete the work.  Done in a small group with a cross-section of 3 or 4 people , we found a facilitated discussion process sparked some really useful conversation and helped foster a better shared understanding of the issues and how to manage them.

GRI Training partner
Getting to grips with GRI

If you're keen to learn more about how to get the most from the GRI Standards, have a look at our GRI Standards certified applied learning courses or get in touch to find out more.

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