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GRI or ISSB? The real value for SMEs.



Recently, I was at an ESG talk for SMEs when someone asked whether SMEs should start reporting to GRI or ISSB first.


GRI and ISSB are both leading international sustainability reporting standards but are different in their focus. GRI focuses on disclosing a business’ impacts on the environment, people, and the economy. ISSB on the other hand, focuses on disclosing material information on sustainability risks and opportunities that can reasonably be expected to affect a company’s cash flow, access to finance, and cost of capital over the short, medium, and long term.


My general response would be that SMEs should first do a materiality assessment to identify the topics that matter the most to them, before determining the most relevant disclosures to report. Materiality assessment is certainly important to inform what a company should disclose, in addition to other considerations such as applicable regulations. However, I believe it is equally important to remember that reporting to GRI or ISSB is not the end goal.

Rather, the real value to SMEs lies in the reporting process. The sustainability reporting standard, be it GRI or ISSB, provides a structured framework for SMEs to think through how to build a more resilient business, seize opportunities and amplify their positive impact.


As part of materiality assessment, SMEs go through a mapping of their impacts and dependencies, which in turn give rise to the corresponding risks and opportunities. Through this process, they gain a better understanding of the key inputs and stakeholders crucial to their business and have an opportunity to re-evaluate them in the context of today’s business environment. This should be an important and strategic business consideration but is often deprioritised in the face of more urgent day-to-day firefighting issues in the world of an SME.


More importantly to the business, the standards also require SMEs to identify and formulate strategies to mitigate and manage their impacts, risks, and realise their opportunities. Ultimately, the implementation of these strategies is what we tap on to help realise the business returns from sustainability through cost reductions, new technologies & innovations, new revenue streams, and access to financing.


At the end of the day, although their reporting focus is different, ISSB and GRI are both trying to get organisations to mitigate their negative impacts (risks) and realise their positive impacts (opportunities). The key difference lies in the weightage put on the company’s own financial impacts. Whether a SME ends up starting with GRI or ISSB, they should keep in mind that the real value resides in the reporting process and use this as an opportunity to kickstart real change to strengthen near-term performance & longer-term growth in their organisations.


What do you think? Do you agree with this perspective? Want to find out more about how to apply ISSB and GRI to further actual business growth? Contact us for a complimentary consultation today.

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