Introduction
As Environmental, Social, and Governance (ESG) expectations continue to grow more rigorous across global markets, organizations face increasing pressure to present sustainability disclosures that are credible, comparable, and decision-useful. According to a 2022 Survey of Sustainability Reporting by KPMG, more than 90% of the world’s top 250 companies disclose ESG data, yet the depth and quality of these reports vary widely. A key differentiator among leading disclosures is the alignment with globally recognized reporting frameworks—particularly the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) standards.
While GRI and SASB differ in focus—GRI emphasizes an organization’s impact on the environment and society, while SASB addresses ESG issues likely to affect financial performance—they are increasingly applied together to meet the expectations of a broad range of stakeholders. This article outlines why aligning ESG reports with both GRI and SASB is helpful, demonstrating how each contributes to a more complete, transparent, and strategic approach to sustainability disclosure.
Why GRI and SASB Alignment Enhances ESG Reporting
Alignment with SASB and GRI strengthens ESG reporting by focusing on the two aspects of materiality: impact materiality, in focusing on how the organization affects people and the planet (as structured by GRI), and financial materiality, in focusing on how sustainability issues affect enterprise value (as defined by SASB). Combined, they enable organizations to deal with both society accountability and investor relevance.
From the perspective of stakeholder engagement, GRI alignment facilitates companies to report at length on matters such as emissions, human rights, labor practice, diversity, supply chain footprint, and governance integrity. The disclosures address civil society, regulators, employees, and communities that consider the broader societal footprint of business activity.
At the same time, SASB alignment facilitates disclosure of the extent to which ESG items affect business performance, financial risk, and long-term resilience. Industry-specific SASB metrics, like water use in mining, energy efficiency in real estate, or cybersecurity in finance, facilitate disclosure of financial material and directly related information to investors’ interests.
By integrating the two frameworks, companies are able to present a united view that addresses two fundamental questions: What are we doing for the world? (GRI) and How do ESG risks and opportunities affect our business? (SASB). The two-pronged method instills confidence, facilitates enhanced capital allocation, and enables future-readiness in line with shifting global norms.
Strategic Benefits of GRI and SASB Alignment
- Credibility and Completeness of Disclosures
Both GRI and SASB together increase the reliability of ESG reporting. GRI allows for general disclosures on organizations’ impacts, while SASB encourages specificity and industry-related relevance in economically material issues. Together, they give a truer narrative with less opportunity for greenwashing and evidence of operating integrity. NeoImpact’s ESG Intelligence platform provides complete and credible disclosures and improves reporting integrity for public and private firms looking to start their ESG reporting journey by utilising SASB and GRI requirements for disclosures.
- Readiness for Regulatory Convergence
International regulation development increasingly uses both standards as reference. The ISSB’s IFRS Sustainability Disclosure Standards, for example, draw upon the principles outlined by SASB, and the EU’s CSRD draws on GRI’s double materiality model. Organizations that draw upon both will better be able to respond to subsequent ESG audit and assurance standards. NeoImpact ESG regtech platform offers a horizon toolkit powered by AI to empower private and public firms to respond to global ESG audit and assurance standards.
- Increased Stakeholder Trust
Stakeholders such as investors, consumers, employees, and activist organizations expect organizations to report not only impact-focused and financially material ESG information. Reporting under both GRI and SASB evidences recognition of such expectations and dedication to disclosure on both ends.
- Improved Internal Decision-Making
Internally, GRI-SASB alignment facilitates better ESG governance. It facilitates cross-functional collaboration among finance, risk, compliance, and sustainability functions. It also helps in identifying operational areas to enhance and strategic ESG risks to be handled at the board level.
- Benchmarking and Performance Monitoring
The data structured by these frameworks enables easier peer benchmarking, trend analysis, and performance tracking. Companies can compare where they are relative to industry peers or averages on both impact and financial measures.
Conclusion
Combining ESG disclosures with GRI and SASB standards offers a balanced, hybrid sustainability reporting approach. GRI offers the framework for reporting organizational impacts to various groups of stakeholders, whereas SASB enables one to make financially material disclosures that respond to the needs of capital markets. Together, they allow for a dual materiality perspective of impact and finance that is increasingly being demanded by regulators, investors, and society.
This convergence not only enhances transparency and confidence but also allows organizations to make informed choices regarding the new ESG regulatory environment. Using technology platforms, organizations can ensure that their ESG reporting is not only compliant but also strategic and forward-looking.
