GRI has issued the GRI Climate Change Topic Standards Exposure Draft, which is available for review and public comment until February 29, 2024.
What is the purpose of this new standard, given that other topic standards such as GRI 305 Emissions and GRI 302 Energy already exist?
GRI explains it as follows:
The primary objective of this project is to review and revise GRI climate change-related Standards and to incorporate new issues that reflect stakeholder expectations on climate change impacts that go beyond energy consumption and GHG emissions. As part of the revision of GRI climate change-related Standards, the content of GRI 302: Energy 2016, GRI 305: Emissions 2016 (Disclosures 305-1 to 305-5) has been updated, while GRI 201: Economic Performance 2016 (Disclosure 201-2: Financial implications and other risks and opportunities due to climate change) has been integrated in the Climate Change exposure draft.
GRI
The objectives of the standard are to enable an organization to disclose publicly:
- “its most significant impacts on climate change and how the organization manages these impacts, enhancing transparency of the organization’s impacts and increasing organizational accountability;
- its climate change-related impacts beyond GHG emissions, including impacts related to just transition, climate transition and adaptation plans, GHG removals in the value chain, and carbon credits.”
In the GRI Standards, there are two types of disclosures associated with a significant impact. They include how the topic is managed and specific topic metrics, which can include qualitative and quantitative information.
What are topic management disclosures in the GRI Standards?
Topic management is key for an organization to mitigate its negative material impacts or enhance its positive ones. If your company determines one of their impacts on the economy, environment, or society to be significant, it should be managing it. In keeping with this rationale, organizations that publish a sustainability report in accordance with the GRI Standards are required to describe how they manage each of their identified material impacts in accordance with GRI 3-3. GRI 3-3 could be described as topic agnostic because it is applied to all topics. Some topic standards such as the proposed Climate Change Standard have additional management disclosure requirements that are to be applied only to this topic.
The Climate Change Standard has the following two topic management disclosures.
- Disclosure CC-1 Transition plan for climate change mitigation
- Disclosure CC-2 Climate change adaptation
It has six topic disclosures.
- Disclosure CC-3 Just transition
- Disclosure CC-4 GHG emissions reduction target setting and progress
- Disclosure GH-1 Scope 1 GHG emissions
- Disclosure GH-2 Scope 2 GHG emissions
- Disclosure GH-3 Scope 3 GHG emissions
- Disclosure GH-4 GHG emissions intensity
- Disclosure CC-5 GHG removals in the value chain Disclosure CC-6 Carbon credits
How does this proposed standard fit in with other standards/frameworks?
“Interoperability” among the existing sustainability reporting standards has become an increasingly relevant issue over the last few years. With many standards available, reporters feel the burden of meeting numerous reporting requirements. To ease the reporting burden somewhat, many of the standards/frameworks are collaborating and publishing linking documents that compare their disclosures. Companies can see how similar information can be used in their multiple reports.
GRI follows through on “interoperability” with an excellent table showing how elements of the proposed Climate Change Standard can be compared to other standards and frameworks in the sustainability reporting landscape. These include CDP, European Sustainability Reporting Standards (ESRS), International Financial Reporting Standards (IFRS) S2, Taskforce on Climate-related Financial Disclosures, and U. S. Securities and Exchange Commission Proposed Climate Disclosure Rule.
My next post will summarize the proposed GRI Energy Standard.