Sustainability has become an integral part of corporate operations. In response to global challenges such as climate change, social inequality, and governance demands, many organizations are taking concrete steps to be more transparent and accountable. One way to demonstrate this commitment is through sustainability reporting. These reports serve as a strategic communication tool for stakeholders and reflect the company’s values in supporting sustainable development. However, without clear guidelines, creating credible sustainability reports can be a significant challenge.
The Global Reporting Initiative (GRI) offers a structured and reliable standard to help companies draft sustainability reports. By providing comprehensive guidelines that cover economic, environmental, and social aspects, GRI Standards ensure that reports address the most material impacts for companies and their stakeholders.
Why Has GRI Become a Global Standard?
To promote transparency and accountability, companies worldwide face the need to report their economic, environmental, and social impacts comprehensively. The GRI Standards for Sustainability Reporting have become one of the most recognized frameworks globally. According to the latest survey by KPMG, approximately 77% of the world’s 250 largest multinational companies (G250) use the Global Reporting Initiative (GRI) Standards for sustainability reporting. Additionally, 71% of the largest 5,800 companies across 58 countries (N100) also adhere to GRI Standards. Overall, 90% of large companies that produce sustainability reports choose GRI Standards. These figures highlight the global dominance and trust in GRI as the leading framework for sustainability reporting.
One of the main reasons GRI Standards for Sustainability Reporting have achieved global prominence is their holistic approach to drafting sustainability reports. These standards encompass three primary categories—economic, environmental, and social—and are guided by principles that ensure reports are accurate, transparent, and internationally comparable. GRI also allows companies the flexibility to tailor their reports to specific industry needs and stakeholder expectations. Furthermore, as the standards are regularly updated to reflect regulatory changes and global issues, GRI remains a relevant strategic tool for companies to build trust, enhance their reputation, and mitigate sustainability risks. This makes it the preferred choice for sustainability reporting worldwide.
Challenges in Using GRI
Sustainability has become a top priority for many companies worldwide, particularly as stakeholders demand greater transparency and accountability. The GRI Standards for Sustainability Reporting provide a clear framework for organizations to report their operational impacts on economic, environmental, and social aspects. However, despite being a globally recognized standard, its implementation is not without significant technical and operational challenges. The standard requires reports to be transparent, accurate, and comprehensive, covering economic, social, and environmental dimensions. For many companies, creating such reports often becomes a major challenge, requiring structured processes and substantial resources.
The primary challenges in using GRI are not only limited to understanding the standards but also involve technical aspects such as data collection and the identification of relevant material issues. Errors or inaccuracies in drafting the report can risk damaging the company’s credibility in the eyes of stakeholders. Therefore, understanding these challenges in detail is essential before exploring effective solutions.
Complexity in Preparing Reports Aligned with GRI
One of the key challenges lies in the complexity of preparing reports that align with GRI Standards, particularly regarding their structure and scope. GRI divides its standards into three main categories: Universal Standards, Sector Standards, and Topic Standards. Companies must not only understand each of these elements but also ensure that their reports comprehensively address all aspects relevant to their operations and impacts. Additionally, principles such as accuracy, balance, and consistency must be adhered to in order to ensure that the reports are highly credible.
Many companies struggle to ensure their reports not only meet technical criteria but also provide strategic value. This often requires significant time and labor as it involves various internal teams working together to gather and verify data. The complexity of this process underscores the need for companies to have effective tools or guidance to streamline the reporting process.
Data collection issues and identification of materiality issues
Another significant hurdle is data collection for sustainability reports, which often poses a major challenge, especially for companies without integrated data tracking systems. The required data spans various aspects, including carbon emissions, energy consumption, waste management, and social contributions. This challenge is further compounded for companies with operations spread across multiple locations, where consistency and data validity become critical issues to address.
In addition to data collection, identifying material issues is a crucial yet challenging step. Companies must determine which economic, social, and environmental impacts are most significant to them and their stakeholders. Without accurate materiality analysis, sustainability reports risk losing focus and relevance. This is why technology has emerged as a promising solution to help companies overcome challenges in data collection and materiality analysis efficiently and in an organized manner.
The Role of Technology in Sustainability Reports Aligned with GRI
To address these challenges, technology has emerged as a key solution for preparing Sustainability Reports (SR) that adhere to the GRI Standards for Sustainability Reporting. The complex reporting process—spanning data collection, analysis, and visualization—can be simplified with advanced technologies, such as Artificial Intelligence (AI)-powered platforms. With the help of technology, companies can expedite the report preparation process without compromising accuracy or quality. Technology enables businesses to create reports that not only meet the required standards but are also relevant and easily understood by stakeholders.
Additionally, technology helps companies respond more effectively to global sustainability demands. Digital tools allow companies to present sustainability data transparently, manage risks, and develop more effective sustainability strategies. By adopting technology, companies can reduce operational burdens and focus on making strategic decisions based on comprehensive sustainability data.
How Technology Simplifies the Reporting Process
Technology-driven solutions not only simplify the complex reporting process but also ensure each step is executed with precision and efficiency. With automation designed to meet GRI Standards, companies can seamlessly integrate data and produce sustainability reports that are both relevant and accurate. AI-powered tools, for instance, can consolidate data from multiple departments in a short time, enabling companies to save time without compromising report quality.
Technology also offers standardized templates and guidelines aligned with GRI, making it easier for companies to structure their reports in an organized manner. Features such as automated materiality analysis help businesses identify the most critical sustainability issues relevant to their operations. As a result, more strategic and focused reports can be produced more efficiently.
Examples of Digital Tools Supporting Sustainability Reporting
With the continuous evolution of technology-based solutions, companies can easily overcome the complexities of sustainability reporting. A variety of digital tools are now available to simplify the process, ensuring reports are accurate, relevant, and compliant with global standards like GRI.
One such tool is Reporthink.AI, an AI-powered generative platform designed to automate the reporting process. Featuring capabilities such as automated analysis, data-driven narratives, and templates integrated with global standards, this platform enables companies to prepare sustainability reports efficiently and professionally.
In addition to supporting accurate reports aligned with stakeholder needs, Reporthink.AI ensures that essential components, from Universal Standards to Topic Standards, are comprehensively addressed in the report. This advanced technology not only speeds up report preparation but also enhances the credibility of reports on a global scale.
Moreover, tools like Tableau and Power BI play a vital role in visualizing sustainability data through interactive graphs and engaging diagrams. With these solutions, companies can effectively present relevant sustainability information, comply with local regulations like POJK, and strengthen their reputation among global investors and business partners.