New GRI standards for worker impact

This week, the Global Reporting Initiative (GRI) launched a significant update of its labour-related standards, marking an important step in the evolving corporate sustainability reporting landscape. This update aims to enable companies to provide more detailed and transparent reports on their impacts on workers, thereby fostering improved transparency concerning workplace labour and human rights.

A comprehensive approach to sustainability reporting

The GRI Sustainability Reporting Standards are globally recognised as one of the most widely adopted frameworks for sustainability reporting. Developed by the Global Sustainability Standards Board (GSSB), these standards promote consistent reporting across various industries, ensuring clear communication on sustainability issues to a diverse range of stakeholders, including investors.

The latest review kicks off with a consultation on the revised versions of three key standards: “GRI 402: Labor/Management Relations,” “GRI 401: Employment,” and “GRI 202: Market Presence.” The proposed updates introduce new and refined disclosures on several critical areas. These include:

  • Employment factors: Addressing non-standard forms of employment, personal data protection, privacy, and hiring and turnover metrics.
  • Remuneration and working time: Policies and metrics on cost-of-living estimates, gender pay gap, and social protection coverage.
  • Significant changes for workers: Consultation and notice periods, redeployment, up-skilling, re-skilling, and termination of employment.

The redrafting process was guided by an expert group, ensuring representation from workers through the International Trade Union Confederation and Global Unions Federations, employers via the International Organisation of Employers, and the International Labour Organisation (ILO). This collaboration guarantees that the updated GRI Labor Standards align with essential intergovernmental instruments on business and human rights from the ILO, the UN, and the OECD.

The growing importance of social impact

As the business world increasingly acknowledges the significance of social impact, transparency, and stewardship, these updates come at a crucial time. Asset managers and investors are now more attuned to the social dimensions of corporate performance. Understanding a company’s impact on its workforce is not just a matter of compliance but a critical component of sustainable and responsible investment strategies.

GSSB Chair Carol Adams emphasised this point, stating,

“Revising labour-related disclosures is a high priority for the GSSB, given widespread recognition of the need for organisations to do more to protect human and labour rights and ensure decent conditions and treatment of workers. Better information and disclosure are key to achieving the SDGs and improving decision-making. I encourage all stakeholders to review the changes and provide feedback.”

Looking ahead: Continued consultations and updates

Over the next 12 months, the GRI will conduct two additional consultations focusing on reporting on working life and career development, as well as workers’ rights and protections. These consultations will result in updates to a total of 11 GRI standards, further refining and expanding the framework for corporate transparency on labour issues.

For asset managers, these developments underscore the importance of integrating detailed labour impact assessments into investment analyses and decision-making processes. As transparency and stewardship continue to shape the future of business, staying abreast of such updates is essential for those committed to fostering sustainable and socially responsible investment portfolios.

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