Integrated Reporting Framework, Global Reporting Initiative Framework and Business Responsibility and Sustainability Reporting: formula sheet

Key formulas

Triple bottom line

TBL = People (social) + Planet (environmental) + Profit (economic)

A way of measuring performance on three lines, not a numerical formula. Profit is only one of the three.

ESG

ESG = Environmental + Social + Governance

The investor-side lens on non-financial factors that affect risk and long-term value.

Reporting progression

Financial-only → voluntary CSR/sustainability reports → triple bottom line → standardised frameworks (GRI) → integrated reporting → mandatory ESG disclosure (BRSR)

Use this as the spine of any answer on evolution.

Seven guiding principles

Strategic focus and future orientation; Connectivity of information; Stakeholder relationships; Materiality; Conciseness; Reliability and completeness; Consistency and comparability

These govern preparation and presentation of the report. Learn them as a list of seven.

Eight content elements

Organizational overview and external environment; Governance; Business model; Risks and opportunities; Strategy and resource allocation; Performance; Outlook; Basis of preparation and presentation

They are fundamentally linked to each other and are not mutually exclusive. They are not a fixed structure.

Six capitals

Financial, Manufactured, Intellectual, Human, Social and relationship, Natural

Stocks of value that are increased, decreased or transformed by the organisation's activities and outputs.

Value creation process

Capitals (inputs) → Business activities → Outputs → Outcomes → Effects on capitals

The business model sits at the centre, influenced by the external environment, governance and strategy.

Purpose of the Framework

Explain to providers of financial capital how an organisation creates value over time

An integrated report benefits all stakeholders interested in value creation.

Six capitals

Financial + Manufactured + Intellectual + Human + Social and relationship + Natural

Learn the names in this order. Be ready to define each in one line with an example.

Value creation flow

Capitals (inputs) → Business activities → Outputs → Outcomes → Effect on capitals

Outcomes can be positive or negative and can be internal or external. They feed back into the capitals.

Context of the model

External environment + Governance + Business model + Risks and opportunities + Strategy + Performance + Outlook

The model sits inside this wider setting. Use it to link the capitals to the other content elements of an integrated report.

Nature of the capitals

Capitals are stocks of value that increase, decrease or are transformed

The six categories are a guide. The organisation may group them differently.

Structure of the GRI Standards

GRI Standards = Universal (GRI 1, 2, 3) + Sector Standards + Topic Standards (200, 300, 400 series)

Universal applies to all. Sector applies by industry. Topic applies by material topic.

GRI 1: Foundation

GRI 1 = purpose, key concepts, reporting principles, requirements for reporting in accordance with the Standards

The rulebook. It is not a list of performance disclosures.

GRI 2: General Disclosures

GRI 2 = organisational details, activities and workers, governance, strategy, policies, practices, stakeholder engagement

Reported by every organisation.

GRI 3: Material Topics

GRI 3 = process to determine material topics + list of material topics + how each is managed

Links the Universal Standards to the Topic Standards.

Topic Standard numbering

200 = economic; 300 = environmental; 400 = social

Example: GRI 305 is Emissions, an environmental topic.

Two ways to report

In accordance with the Standards (full requirements) or With reference to the Standards (reduced requirements)

Be ready to state the difference in a short answer.

Principles for report quality (GRI 1: 2021)

Accuracy, Balance, Clarity, Comparability, Completeness, Sustainability context, Timeliness, Verifiability

Eight principles. They run in alphabetical order, so memorise them as A-B-C-C-C-S-T-V. The 2016 Standards used reliability instead of verifiability, and listed stakeholder inclusiveness and materiality as content principles. Those two are no longer principles.

Meaning of the key quality principles

Accuracy = correct and detailed enough to assess impacts; Balance = positive and negative; Clarity = understandable and accessible; Comparability = across time and organisations

Completeness = enough information on material topics and boundary to assess impacts. Timeliness = regular schedule, information available in time for decisions. Verifiability = information can be checked.

GRI 3 process for material topics

Step 1 Understand context → Step 2 Identify actual and potential impacts → Step 3 Assess significance → Step 4 Prioritise and decide material topics

Impacts on economy, environment and people, including human rights. Involve stakeholders and experts.

Significance of impacts

Actual negative impact: severity. Potential negative impact: severity and likelihood. Actual positive impact: scale and scope. Potential positive impact: scale, scope and likelihood.

Severity of a negative impact = scale, scope and irremediable character. For human rights impacts, severity takes precedence over likelihood.

GRI 3 disclosures on material topics

3-1 Process to determine material topics; 3-2 List of material topics; 3-3 Management of each material topic

Disclosure 3-3 is reported for every material topic.

In accordance with GRI: nine requirements

1 Apply the reporting principles; 2 Report GRI 2 disclosures; 3 Determine material topics; 4 Report GRI 3 disclosures; 5 Report relevant Topic Standard disclosures for each material topic; 6 Give reasons for omission where needed; 7 Publish a GRI content index; 8 Provide a statement of use; 9 Notify GRI

Omission reasons are limited to: not applicable, legal prohibition, confidentiality constraints, or information unavailable or incomplete. 'With reference to' has its own, lighter requirements: publish a content index, provide a statement of use, notify GRI, and report the disclosures it claims to use, giving reasons for omission where applicable. The reporting principles are not formal requirements for this claim. It does not require the GRI 3 process or the GRI 2 and GRI 3 disclosures.

BRSR sections

Section A = General disclosures; Section B = Management and process; Section C = Principle-wise performance

Section C is split into Essential and Leadership indicators for each of the nine principles.

Applicability

Mandatory: top 1000 listed companies by market capitalisation

Others may report voluntarily. Always verify the latest SEBI circular for changes.

Nine NGRBC principles

P1 Ethics | P2 Products | P3 Employees | P4 Stakeholders | P5 Human rights | P6 Environment | P7 Policy advocacy | P8 Inclusive growth | P9 Consumers

Memory aid: Ethics, Products, People, Partners (stakeholders), Rights, Planet, Policy, Prosperity (inclusive growth), Customers.

Indicator types

Essential Indicators = mandatory; Leadership Indicators = voluntary

Applies within Section C for each principle.

BRSR vs BRR in one line

BRR = narrative, NVG-based, nine principles; BRSR = data-rich, NGRBC-based, nine principles, Essential and Leadership indicators

Both use nine principles, but the underlying guidelines and the depth of data differ.

BRSR structure

Section A (General) + Section B (Management and Process) + Section C (Principle-wise Performance)

Section C splits into Essential and Leadership indicators.

Audience test

BRSR → regulator and investors in India; GRI → all stakeholders (impact); IR → providers of financial capital (value creation)

Use this to anchor any comparison answer.

Nature of each framework

BRSR = mandatory for prescribed listed entities; GRI = voluntary standards; IR = voluntary principles-based framework

Voluntary applies unless a law or the company itself requires use.

Materiality lens

GRI = impact materiality; IR = matters affecting value creation; BRSR = prescribed disclosures

BRSR is largely prescriptive, so the company does not choose most indicators.

Quick revision

• Integrated Reporting explains how an organisation creates, preserves or erodes value over time.
• The six capitals are financial, manufactured, intellectual, human, social and relationship, and natural.
• Integrated Reporting is built on guiding principles and content elements, not on a fixed list of indicators.
• GRI Standards have three parts: Universal Standards, Sector Standards and Topic Standards.
• GRI 1 covers the foundation, GRI 2 general disclosures and GRI 3 material topics.
• Topic Standards are numbered in the 200 (economic), 300 (environmental) and 400 (social) series.
• GRI materiality is based on the organisation's significant impacts on the economy, environment and people.
• An organisation reports either in accordance with the GRI Standards or with reference to them.
• BRSR replaced the earlier Business Responsibility Report (BRR) for listed companies under SEBI's requirements.
• BRSR has Section A General Disclosures, Section B Management and Process Disclosures and Section C Principle-wise Performance.
• BRSR is built around the nine principles of the National Guidelines on Responsible Business Conduct, with essential and leadership indicators.
• BRSR Core is a smaller set of key indicators across nine attributes that needs assurance, and value chain disclosures are being phased in.

Common mistakes

• Treating the triple bottom line as a profit formula with numbers Fix: Say it is a three-part measure of performance: people, planet, profit. It has no single arithmetic formula.
• Mixing up the order of stages, for example placing GRI before voluntary reports Fix: Remember the logic: voluntary, then conceptual (TBL), then standardised (GRI), then connected (integrated), then mandatory.
• Treating the content elements as a fixed set of report sections. Fix: State that the elements are interrelated, not mutually exclusive, and not a standard structure or order.
• Mixing up guiding principles with content elements. Fix: Remember: principles tell you how to prepare the report (seven). Elements tell you what to include (eight).
• Treating the six capitals as a mandatory reporting format or checklist. Fix: State that the capitals are a guide. The organisation may use other categories, but should consider all six in deciding what is material.
• Confusing financial capital with the financial statements, or with profit. Fix: Financial capital is the pool of funds available to the organisation. Profit is one outcome that adds to it.
• Saying the Universal Standards are only for large companies or only for some sectors. Fix: Universal means all organisations. Sector is the one that depends on industry.
• Putting the list of material topics under GRI 2. Fix: GRI 2 is the organisation's general profile and governance. GRI 3 deals with material topics. Link GRI 3 to the Topic Standards.
• Treating GRI materiality as financial materiality. Fix: Write that GRI uses impact materiality, based on the organisation's significant impacts on economy, environment and people. Mention that financial materiality is a separate lens.
• Listing the old 2016 principles as if they are the current GRI 1 principles. Fix: Give the eight 2021 principles. Add a line that earlier versions grouped them as content and quality principles, and that stakeholder inclusiveness and materiality are no longer principles. Materiality is now handled through the GRI 3 process, and stakeholder engagement is a GRI 2 disclosure.

Exam tips

• Write evolution answers as ordered stages. Examiners look for the sequence and for what each stage added.
• Always name the triple bottom line as people, planet, profit and credit John Elkington for it.
• For 'why' questions, give at least four reasons and tie each to a named stakeholder.
• Finish with the Indian position, SEBI's BRSR, and link to the company secretary's role in disclosure and compliance.
• Keep dates out unless you are certain of them. Stages and logic earn marks, not guessed years.
• Learn the seven principles and eight elements as two separate, numbered lists. Examiners often ask for one list only.
• Always mention the six capitals and value creation. It lifts a short answer to a complete one.
• In case questions, name the exact element or principle for each fact, then give your conclusion.