LEARNING HUB · 8 min read
The world’s most widely used sustainability reporting framework, in plain English — how it is built, how a company actually uses it, and why it answers a different question from the one Sri Lanka’s new mandatory standards ask.
By the ESGNexus Editorial Team · July 2026 · Estimated reading time: 8 minutes
| IN A NUTSHELL
The GRI Standards are a free, modular framework that organisations use to report their impacts on the economy, the environment, and people. Created by the Global Reporting Initiative — founded in 1997 and the oldest sustainability reporting body — they are the most widely used sustainability reporting standards in the world. Since a major 2021 revision (effective January 2023), they are organised into three series: Universal Standards (used by everyone), Sector Standards (specific to your industry), and Topic Standards (specific to each issue you report on). The single most important thing to understand: GRI measures your impact on the world (impact materiality). That is a different question from the one Sri Lanka’s mandatory SLFRS S1 and S2 standards ask, which is how sustainability affects your company’s value (financial materiality). Most serious reporters will end up using both. |
If you read only one sustainability report this year, there is a high chance it was prepared using the GRI Standards. They are the most widely adopted sustainability reporting framework globally, and in Sri Lanka they underpin the sustainability sections of most large listed companies’ annual reports. Yet for something so ubiquitous, GRI is poorly understood by those who need to understand it most — the finance and reporting teams now being asked to produce credible disclosures. This guide explains what the GRI Standards are, how they are structured, how an organisation uses them, and — crucially for a Sri Lankan reader in 2026 — how they relate to the mandatory SLFRS standards now in force.
What GRI Is — and What Makes It Different
The Global Reporting Initiative is an independent, international standards organisation, founded in 1997 in the aftermath of the Exxon Valdez oil spill, to provide companies with a credible way to report on environmental and social performance. Over nearly three decades, it has become the reference point for sustainability disclosure worldwide. Its standards are developed by the Global Sustainability Standards Board (GSSB), an independent body, and — importantly — are free to download and use.
Source: GRI, ‘Standards’ and ‘Mission & History’ — globalreporting.org
The defining characteristic of GRI is its perspective. GRI reporting is built around impact: it asks an organisation to disclose its most significant impacts on the economy, the environment, and people, including impacts on human rights. This is often called an “impact materiality” or “inside-out” lens — it looks at the effect the company has on the world. Hold on to that idea, because it is key to understanding both how GRI works and how it differs from the financial-materiality standards now mandatory in Sri Lanka.
How the Standards Are Structured
The 2021 revision — the most significant change since GRI moved from providing guidance to setting formal standards in 2016, and effective for reporting from 1 January 2023 — organised the system into three modular series. Understanding these three building blocks covers most of what you need.
1. Universal Standards — everyone uses these
The Universal Standards apply to every organisation reporting with GRI. There are three, and they are used in order:
- GRI 1: Foundation 2021 — the starting point. It explains the purpose and key concepts of GRI reporting (impact, material topics, due diligence, stakeholder) and sets out the reporting principles and requirements an organisation must comply with.
- GRI 2: General Disclosures 2021 — information about the organisation itself: its activities, governance, strategy, policies, and reporting practices. The 2021 update notably strengthened governance disclosures.
- GRI 3: Material Topics 2021 — the engine of the whole process. It guides the organisation through determining its material topics — the issues on which it has its most significant impacts — and which disclosures to report for each.
Source: GRI, ‘Universal Standards 2021 FAQ’ — globalreporting.org; GRI 1: Foundation 2021
2. Sector Standards — specific to your industry
Introduced in 2021, the Sector Standards are a genuinely new part of the system. Each one outlines the sustainability topics likely to be material for a particular industry, based on that sector’s most significant impacts. If a Sector Standard exists for your industry, you are required to use it when determining your material topics — reviewing each topic it flags and either reporting on it or explaining in your GRI content index why it is not material.
GRI plans around 40 Sector Standards, to be released in order of impact. The first were GRI 11: Oil and Gas (2021), GRI 12: Coal (2022), and GRI 13: Agriculture, Aquaculture and Fishing (2022), with mining, food and beverage, textiles and apparel, banking, and others in development. For a Sri Lankan preparer, the practical point is that many sectors — including banking — do not yet have a finalised Sector Standard, so most local reporters currently work with the Universal and Topic Standards while sector-specific ones roll out.
Source: GRI, Sector Standards Program — globalreporting.org; GRI Universal Standards 2021 FAQ
3. Topic Standards — specific to each issue
The Topic Standards provide detailed disclosures for individual sustainability issues — emissions, water, waste, occupational health and safety, anti-corruption, and so on. After using GRI 3 (and any applicable Sector Standard) to determine what is material, an organisation selects the Topic Standards that match its material topics and reports only the disclosures relevant to those impacts. The 2021 revision reorganised these into 31 Topic Standards (down from the older 200/300/400 economic, environmental, and social series), following the absorption of three topics into the Universal Standards.
Source: GRI, Consolidated Set of the GRI Standards 2021 — globalreporting.org; KPMG, ‘Revised system of the GRI Standards,’ 2024 — kpmg.com
How an Organisation Actually Uses GRI — in Five Steps
Stripped to its essentials, reporting with GRI follows a logical sequence:
- Start with GRI 1. Understand the principles and requirements for reporting “in accordance with” the Standards.
- Determine material topics using GRI 3. Identify where the organisation’s most significant economic, environmental, and social impacts lie — informed by stakeholder and expert engagement.
- Apply any relevant Sector Standard. Check the topics your industry standard flags as likely material, if one exists for your sector.
- Report general information with GRI 2. Disclose organisational, governance, and strategy details.
- Report on each material topic with the matching Topic Standards. Provide the specific disclosures, and use the GRI content index to show what you reported and to explain any omissions.
External assurance is recommended to enhance credibility but is not required to report in accordance with the Standards — a point worth knowing when you read a report claiming GRI alignment.
Source: GRI 1: Foundation 2021; GRI 3: Material Topics 2021 — globalreporting.org
The Point That Matters Most for Sri Lanka: GRI vs SLFRS
This is where a Sri Lankan reader needs to pay close attention, as it is the single most common source of confusion. GRI and Sri Lanka’s mandatory SLFRS S1/S2 standards are not competitors or substitutes. They answer two different questions.
| GRI Standards | SLFRS S1 / S2 (ISSB-based) | |
| Core question | How does the company affect the world? | How do sustainability issues affect the company’s value? |
| Materiality lens | Impact materiality (inside-out) | Financial materiality (outside-in) |
| Primary audience | All stakeholders | Investors and capital providers |
| Status in Sri Lanka | Voluntary, widely used | Mandatory for listed companies (phased from FY2025) |
Note: the two frameworks are increasingly designed to interoperate; GRI and the ISSB have committed to aligning where possible so that companies can report to both without duplicating effort.
Together, the two lenses constitute what the reporting world calls “double materiality” — reporting both your impact on the world (GRI) and the world’s financial impact on you (SLFRS/ISSB). A large Sri Lankan company seeking a genuinely comprehensive sustainability report will, in practice, draw on both: GRI for its stakeholder-facing impact disclosure, and SLFRS S1/S2 for the now-mandatory, investor-facing financial-materiality disclosure. Understanding that they are complementary — not a choice between them — is what separates a sophisticated preparer from a confused one.
Why GRI Still Matters Even Though It’s Voluntary
A reasonable question from a Sri Lankan finance director is: if SLFRS is now the law, why bother with a voluntary framework? Three reasons. First, GRI remains the global expectation for stakeholder-facing impact reporting — international buyers, lenders, and NGOs still look for it. Second, GRI’s impact lens captures issues (community impact, human rights, environmental harm) that a purely financial-materiality standard may not surface, and these issues carry real reputational and operational risk. Third, a company that has already built a disciplined GRI materiality process is substantially better prepared to meet SLFRS requirements than one starting from nothing — the underlying work of identifying and managing material topics transfers.
Related Reading on ESGNexus
- What Is ESG? A Complete Guide for Sri Lankan Businesses
- ESG vs CSR vs Sustainability: What’s the Difference?
- Sri Lanka’s Mandatory Sustainability Reporting Is Here — What Every Listed Company Must Know
- SLFRS S1 vs SLFRS S2: A Plain-English Guide for Sri Lankan Finance Teams (forthcoming)
Sources & Further Reading
Global Reporting Initiative — ‘The GRI Standards’ — globalreporting.org
Global Reporting Initiative — ‘Universal Standards’ and ‘Universal Standards 2021 FAQ’ — globalreporting.org
Global Reporting Initiative — Consolidated Set of the GRI Standards 2021
KPMG — ‘Revised system of the GRI Standards,’ 2024 — kpmg.com
Verdani Partners — ‘GRI 2021 Standards: New Requirements,’ 2025 — verdani.com
ESGNexus — ‘What Is ESG? A Complete Guide for Sri Lankan Businesses,’ July 2026 — esgnexus.lk
ESGNexus — ‘Sri Lanka’s Mandatory Sustainability Reporting Is Here,’ June 2026 — esgnexus.lk
| About ESGNexus
ESGNexus is Sri Lanka’s independent platform for ESG, CSR, and sustainability intelligence. We track company-level ESG performance, regulatory developments, and sustainability data across Sri Lanka’s listed companies, large unlisted corporates, and state-owned enterprises. All editorial content is independently produced. Sponsored content is clearly labelled. Data disclaimer: Information in this article is sourced from publicly available documents. ESGNexus does not independently verify company disclosures. Errors and omissions excepted. |