May 17, 2024

Strategies for Impactful GRI Reporting with Harold Pauwels

Harold Pauwels, the Director of Standards at GRI, is a leading figure within the field of sustainability reporting. In this Q&A, he shared his insights with us on a broad range of topics related to GRI reporting.

Vrinda Sood
Strategies for Impactful GRI Reporting with Harold Pauwels

We recently interviewed Harold Pauwels, who serves as the Director of Standards at GRI.

Harold is deeply involved in the development of new GRI Standards, and is a leading figure in the evolving field of sustainability reporting.

He collaborates with NGOs, governments, regulatory bodies and companies globally, offering guidance on the use and improvement of GRI’s robust global reporting system, which supports organizations to be transparent and accountable for their impacts, prioritize future-proofing, and ensure high levels of compliance.

Harold's focus is on establishing globally applicable, transparent, credible, open, and standardized reporting practices that can be applied locally.

For companies new to GRI reporting, what are some best practices they should be aware of? 

There are a number of crucial things that companies reporting for the first time may not be aware of. These include how to identify their stakeholders, understanding how their sustainability strategy plays a key part in their core business, and making sure that their team is capable of carrying out the tasks that will be required of them.

Also, it’s important to work with your team to get an accurate picture of what the most significant impacts and material topics to your business actually are, and to explain the process that was used to determine why something was material to your business.

When you look at companies who’ve been doing GRI reporting for a while, what you see is that they end up approaching sustainability in a strategic manner. This offers ways to gain a competitive advantage, increase operational efficiency, and develop a comprehensive risk assessment.  

In terms of compliance with GRI reporting, what does that tend to look like at the largest companies?

For context, I really want to emphasize that the point of sustainability reporting isn’t the disclosure itself—it’s uncovering and understanding insights about your impacts that you can then act upon. At GRI, our goal is to create a global, standardized way of helping businesses and organizations achieve this outcome and communicate their sustainability impacts.

In terms of compliance with GRI reporting, when you look at the biggest companies in each country, the adoption rate is very high. GRI is the world’s most widely adopted sustainability reporting system used by many thousands of organizations reporting globally—which includes 78 percent of the largest 250 companies in the world.

What this means is that sustainability reporting has become common practice for most large companies, and we can see that the brands who began reporting early on have reaped the benefits of being a first-mover.

It’s about being transparent with their customers on everything from sourcing to product development and the impact that the company is having on the environment and society.

Aside from business incentives, another reason that these organizations have that level of compliance is because there’s been a lot of regulation and societal pressure that’s pushed them in that direction.   

We’d also like to ask a question related to greenwashing. Specifically, how can companies avoid it, and ensure the credibility of their reports?

The most important thing you can do is to ensure that your reporting is reliable, accurate and comprehensive. As a company, make sure that you’re reporting the same way each time, which allows for fair comparisons and spotting noteworthy trends.

In addition, we strongly advise organizations to do external assurance—and as confirmed by recent research from the International Federation of Accountants, GRI sustainability reports are the most frequently assured worldwide.

Also, we suggest incorporating internal assurance, which means having internal safety checks in place like you do for financial reporting.

Finally, one of the best ways to make sure that you’re avoiding greenwashing is by having a stakeholder evaluation committee. This often consists of both internal and external stakeholders, and companies these days even partner with local communities and NGOs to help review sustainability proposals.

Combined, you end up having several layers of assurance, and as a result, the risk of unintended greenwashing is reduced significantly. 

How does GRI look to improve reporting in areas such as data collection, analysis, and accessibility of insights?

The primary function of GRI is to establish reporting standards and ensure accessibility across all reporting frameworks. In pursuit of this goal, we collaborate with platforms like Unravel Carbon to help companies more easily integrate data sources and simplify their reporting processes.

Also, we have a key focus on promoting interoperability with other standards in order to enhance user convenience. The objective is enabling companies to upload data into their preferred platform just once, and still be able to comply with different standards and regulations.

Looking ahead, what are some areas that you expect to receive more attention within GRI reporting?

The next big thing is biodiversity.

We’re at a point now where everybody understands that GHG emissions are only a part of addressing climate change, and we really need to bring more awareness to biodiversity loss, and what the consequences of this are.

Even though we’re already seeing companies who are more advanced with their sustainability efforts investing heavily in this area, the overall number of organizations who are conducting biodiversity reporting is quite low.

In order to support organizations with these efforts, GRI recently published our new biodiversity standard, GRI 101. We collaborated closely on this project with the TNFD, who recently published their own recommendations, as well as EFRAG to ensure that the new European standards on biodiversity are to a high extent aligned with GRI. There’s also a UN summit at the end of the year on biodiversity again, and we expect to see a further shift from the focus being solely on climate to the climate-nature nexus.

For companies, this means understanding what your impact is on biodiversity, so think about your impact on species, water usage and the surrounding ecosystems, for example.

In addition, we expect to see more of an emphasis from both regulators and broader society on topics ranging from circularity to human and animal rights. It’s always difficult to predict, but our guess is that these areas will become a part of mainstream global impact reporting within the next 10 years.

Ultimately, what we’re all working toward is sustainable development, and doing so in a way that aligns with Brundtland’s definition of the term: taking care of the planet so that future generations have a quality of life that’s at least as good as ours, and hopefully, even better.

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