The first draft of the ESRS has been submitted by EFRAG to the European Commission and will be formally adopted by June 2023. If adopted, it will apply to approximately 50,000 companies and will also apply to non-European companies with subsidiaries or branch offices.

As a basis for current sustainability reporting standards, the GRI Standards are the most widely used in the world, with 73% of the top 250 global companies either complying or referring to them.

In light of the ESRS becoming law, companies that currently report using the GRI Standard will need to prepare for the transition to the ESRS; How different are the ESRS requirements from GRI? What kind of preparation for that? as well as for those companies that do not yet conduct reporting disclosure.

This article, the second in a series on CSRD/ESRS, focuses on the consistency and differences between ESRS and GRI (FYR: first article).

You can get a CSRD/ESRS Guidebook, which has been compiled from the series of articles. Sign up here!

Mapping of ESRS and GRI

GRI has been actively involved in developing the ESRS in cooperation with EFRAG since its early stages. The focus has been ensuring interoperability between the two standards and minimizing reporting burdens and challenges for companies.

Companies already reporting following GRI compared to other standards will be able to transition to the ESRS more reasonably and quickly to ESRS requirements soon. Those not following GRI should be able to follow GRI and start preparing as soon as possible.

Consistencies of ESRS and GRI

Companies following GRI will be able to use their existing reporting processes and disclosure practices to integrate the requirements of the ESRS. 

Topics, themes and some indicatorsESRS:
Consists of 12 criteria in four themes: general principles, environment, society, and governance.
GRI:
Consists of General Principles (GRI 1-3) and Environmental, Economic, and Social (200-400) themes.
Importance of materiality analysis AssessmentBoth standards report on the premise of materiality identification and assessment.
Necessary data management and collection processesBoth standards require management and collection processes for data related to the required items to comply with the standards.
Stakeholder engagement processesBoth standards require input or feedback on conclusions regarding significant impacts, risks, and opportunities through dialogue with affected stakeholders.

Differencies of ESRS and GRI

Differences itemsESRSGRI
MaterialityDouble materiality:
Financial Materiality and Impact Materiality are the criteria.
Analysis at all levels (thematic, individual impact, indicators).



(ESRS 1 P11>3.3)
Impact materiality:
the environmental and social impact, is the criteria.

Analysis at the thematic level recommended (e.g., climate change, occupational health and safety).
Failure to disclosure informationDisclosure may be withheld only if it would undermine the business position.

Recommended to provide data or estimates of information if the company cannot collect necessary information from upstream and downstream in the value chain.

(ESRS 1 P16>5.2)
Include an explanation as “Not applicable” 
“Legal prohibitions” “Confidentiality constraints” or “Information unavailable.”

In case of the company can not collect necessary information from upstream and downstream in the value chain, are allowed.
Definition of short-, medium- and long-term for reporting purposesAt the end of the reporting period, the following conditions should be met: Short-term (the period adopted as the reporting period in the financial statements), 
Medium-term (up to 5 years from the end of the short-term period), and Long-term (more than 5 years)

(ESRS 1 P17>6.4)
Not requirement

Thus, the difference between ESRS and GRI standards lies in the reporting method and approach rather than the detailed indicators. 

In general, the ESRS has more detailed and stricter requirements than the GRI because it is legally binding on companies, and many of the requirements that are optional in the GRI are mandatory in the ESRS.

GRI will provide guidance on how to use the companies’ GRI reporting practices and processes to meet the ESRS requirements around the same time as adopting the final ESRS standards; in June 2023.

For Companies Not following the GRI

For the major listed SMEs that do not currently have sustainability reporting, using the GRI now will help them assess its benefits of anticipation of the ESRS.

For non-European companies that are not currently using GRI or have yet to put much effort into it, we recommend you start using GRI 2021 next year’s reporting.

In the next article, we outline specific preparation by scope application.

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