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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Integrated Reporting Framework, Global Reporting Initiative Framework and Business Responsibility and Sustainability Reporting

Anvika Energy Ltd operates in oil and gas, a sector for which GRI has issued a Sector Standard. A director asks how the Sector Standard interacts with the company's reporting. Which statement is correct?

The company must consult the applicable Sector Standard to identify likely material topics, yet it still determines its own material topics. If it treats a likely material topic as not material, it must disclose that and explain the reasons under GRI 3.

  1. AThe company must disregard its own stakeholder engagement and adopt the Sector Standard's topics as its material topics
  2. BThe Sector Standard replaces GRI 3 for the company
  3. CThe company must use the applicable Sector Standard to identify likely material topics, but still determine its own material topics and give reasons if it omits a likely material topicCorrect
  4. DSector Standards are optional guidance with no link to material topic determination

Explanation

GRI 1 requires an organisation to use applicable Sector Standards when determining material topics. The Sector Standard lists likely material topics, but the organisation still conducts its own assessment, and if it decides a likely material topic is not material, it must explain why in GRI 3. Replacing GRI 3 or adopting topics blindly is incorrect.

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