3-19. Connecting Global Reporting Standards (GRI, SASB, ISSB) with Business Strategy

Navigating Global Reporting Standards: GRI, SASB, and ISSB

In recent years, global standards like GRI (Global Reporting Initiative), SASB (Sustainability Accounting Standards Board), and ISSB (International Sustainability Standards Board) have become increasingly important for corporate sustainability disclosures. These standards go beyond simple information sharing; they are now factors that directly influence business strategy and are under scrutiny by investors and business partners. To achieve sustainable growth, companies must understand and integrate these global reporting standards into their management strategies.

1. GRI Standards and Their Impact on Business

GRI is a comprehensive international framework for sustainability reporting. It requires broad disclosures across environmental (E), social (S), and governance (G) factors, making it effective for building relationships with stakeholders. For companies, transparent information disclosure leads to enhanced brand value and social credibility. In particular, information on environmental performance and human rights directly relates to demands from suppliers and customers, making it essential to integrate into business strategy.

2. SASB Standards and Their Financial Relevance

SASB identifies sustainability issues that are financially material for each industry. For instance, in manufacturing, key issues might be worker safety and greenhouse gas emissions, while for the financial sector, the focus would be on data security and ethics. By adopting SASB, companies can clearly explain to investors which non-financial factors are directly linked to corporate value, thereby improving their evaluation in the capital market.

3. ISSB Standards and International Consistency

The ISSB was established under the IFRS Foundation to develop globally consistent sustainability disclosure standards. It incorporates elements of the TCFD (Task Force on Climate-related Financial Disclosures), requiring companies to report on climate-related risks and opportunities in conjunction with their financial information. There is a growing movement to integrate ISSB standards into national legal systems, making compliance a mandatory requirement for companies operating globally.

4. How to Connect Standards to Business Strategy

To effectively link these global reporting standards to business strategy, it's crucial to go beyond mere data disclosure. Key initiatives include:

• Integrating crucial EHS data into management KPIs so that leadership can use it for decision-making.

• Organizing the risks and opportunities required by each standard and reflecting them in mid-term management plans and investment decisions.

• Clearly demonstrating the connection between disclosed data and business strategy in investor briefings and integrated reports.

• Promoting compliance with standards across the entire supply chain to reduce risks and build trust.

Conclusion

GRI provides comprehensiveness, SASB offers financial relevance, and ISSB ensures international consistency. By integrating these standards into their business strategy, companies can gain the trust of investors and customers, leading to sustainable growth. Connecting global reporting standards to management is more than just a compliance task; it is a core pillar of a business strategy that builds a competitive advantage.