In today’s rapidly evolving landscape of sustainability reporting, two names stand out — the Global Reporting Initiative (GRI) and the International Financial Reporting Standards (IFRS), particularly through the IFRS Foundation’s new sustainability-related standards issued by the International Sustainability Standards Board (ISSB).

While these frameworks originated from different roots — GRI from a multi-stakeholder, impact-driven perspective and IFRS from an investor-focused, financial materiality lens — they are increasingly converging, recognizing the need for coherence, comparability, and consistency in reporting.

Different Starting Points, Shared Objectives

The GRI Standards aim to provide a comprehensive picture of an organization’s significant economic, environmental, and social impacts on the world. It’s built on the principle of impact materiality — how a company’s activities affect the economy, environment, and people.

Meanwhile, the IFRS Sustainability Disclosure Standards (specifically IFRS S1 and IFRS S2) are centered on financial materiality, meaning the focus is on sustainability-related risks and opportunities that could influence investors’ decisions and the enterprise value.

Yet despite these different starting points, both GRI and IFRS now recognize the critical need for a globally aligned system. Their collaboration is rooted in a shared goal: to help organizations communicate a more complete, transparent, and credible narrative of their sustainability performance.

Key Areas of Commonality

• Complementary, Not Competitive: GRI and IFRS are positioned as complementary frameworks. Organizations can report on impact through GRI and financial relevance through IFRS, providing a full-spectrum view to different stakeholders.
• Double Materiality: Both acknowledge the rising importance of double materiality — considering both the impact of sustainability issues on the company (financial materiality) and the company’s impacts on the environment and society (impact materiality).
• Interoperability Efforts: In 2022, GRI and the IFRS Foundation signed a Memorandum of Understanding to coordinate their standard-setting activities. This collaboration ensures that companies can align their reporting without unnecessary duplication or contradiction.
• Focus on Climate and Beyond: With the launch of IFRS S2 Climate-related Disclosures, there’s a strong alignment with GRI 302 (Energy) and GRI 305 (Emissions). Both emphasize the importance of detailed disclosures on climate risks, transition plans, and emissions reductions.
• Global Reach and Stakeholder Alignment: GRI’s established multi-stakeholder approach and IFRS’s strong investor credibility create a powerful synergy. Together, they aim to meet the information needs of both investors and wider stakeholders.

What This Means for Companies

For companies, the convergence of GRI and IFRS standards offers an opportunity — and a responsibility — to deliver integrated, decision-useful sustainability disclosures.

Organizations can streamline their reporting processes by using GRI for broad stakeholder communications and IFRS for capital market disclosures, creating efficiencies while enhancing transparency.

Ultimately, this move toward alignment reflects a broader shift: sustainability is no longer peripheral; it’s central to business strategy, risk management, and long-term value creation.

Looking Ahead

As regulatory pressures mount — especially with initiatives like the EU’s Corporate Sustainability Reporting Directive (CSRD) and growing investor demands — companies that embrace both GRI and IFRS approaches will be better positioned to navigate risks, capture opportunities, and build trust.

The message is clear: impact and financial materiality are two sides of the same coin. By embracing both, businesses are not just meeting compliance requirements; they are building resilience for the future.