Beyond financials: shaping the future of economic impact reporting
Published date: 19 September 2023
GRI opens applications for Economic Impact Standard Working Group
GRI’s Economic Impact Topic Standards were first published in 2016. Seven years later, the world, and the expectations around how organizations report their impact on the economies and communities around them, have changed. There are increasing calls from both policy makers and wider society for organizations to understand and report the impact they have through their activities.
- According to the Edelman Trust Barometer 2023, 82% of people believe CEOs (and therefore organizations) should take a public stand on climate change.
- However, the majority of people (53%) think that businesses are not doing enough.
- A recent PWC survey of investors believes the way an organization manages ESG risk and opportunities is an important factor in their investment decision making.
Traditional metrics for measuring an organization’s economic impact - GDP growth, profitability, shareholder returns - are increasingly seen as inadequate.
"Broad sustainability reporting, beyond enterprise value alone, is needed to achieve socio-economic and environmental cohesion," agrees Eelco van der Enden, GRI’s CEO. "Companies need to communicate to society and investors the effort they are making on these important topics, using comparable data."
As a first 'economic impact' project in 2019, GRI developed a tax standard that offered a groundbreaking tool to better understand how, when, and where businesses pay their taxes. Now, as a next step, the Global Sustainability Standards Board (GSSB) - the independent body responsible for setting the GRI Standards - has prioritized the revision of GRI’s other economic impact related disclosures, to better reflect the socio-economic developments of the last decade and to align the standards with international authoritative instruments.
The revised standards will take a more holistic approach to reporting. They will take into account the UN’s Sustainable Development Goals (SDGs) as well as broader economic, social, and environmental factors.
"The revised GRI Economic Impact Topic Standards will go far beyond the definition of GDP growth as the only indicator of economic health," explained Harold Pauwels, GRI’s Director of Standards. "Instead, they will focus on economic inequalities and unemployment, decent work conditions and policies that foster entrepreneurship. These are indicators of an organization’s impact and contribution to the economy and society at large."
Applications for the Economic Impact Working Group are now open. The Working Group will ideally consist of experts from across business, mediating institutions, labor bodies, civil society, and investors. Together, they will be tasked with helping shape and oversee the revision of the standards relating to the direct and indirect economic impact of organizations.
Once the Working Group members have been recruited, they will work on the draft standards over 2024-2025. The expected release date of the first revised draft is Q2 2025.
Recruitment for the Working Group is open until 19 October 2023. Interested candidates can apply by submitting an application form alongside their CV to [email protected]. More information about the project and requirements can be found here.
Economic impact and the UN Sustainable Development Goals (SDGs)
The 2030 Agenda for Sustainable Development sets out a framework for governments and businesses to achieve inclusive and sustainable economic growth. SDG 8 (Decent Work and Economic Growth) aims for inclusive, sustainable growth and decent work for all, while SDG 9 (Industry, Innovation and Infrastructure) focuses on resilient infrastructure and innovation. The UN also expects businesses to follow principles for social and environmental responsibility. With the 78th session of the United Nations General Assembly (UNGA) taking place this month, the existing constraints within the global financing architecture for sustainable economic development and the need for clear systemic reforms to reinvigorate commitment to achieving the SDGs, will likely be key topics of discussion.