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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Sustainability Audit, ESG Rating and Emerging Mandates from Government and Regulators

Banyan Foods Ltd, a listed Indian company, says its report follows GRI standards and also uses TCFD-style climate disclosures. A director states: "Since we use GRI, we need not decide our material topics, as GRI prescribes the same fixed topic list for every company." Which assessment of this statement is correct?

The director is wrong. GRI requires each organisation to assess its significant impacts on the economy, environment and people, decide its own material topics, and then report using the matching topic standards. It is not a fixed list for all companies, and it is not limited to financial risk.

  1. ACorrect, because GRI fixes one list of topics for all reporters
  2. BIncorrect, because under GRI the organisation determines its material topics through assessing its significant impacts, then reports the relevant topic standardsCorrect
  3. CCorrect, because TCFD replaces the need for topic identification
  4. DIncorrect, because GRI requires reporting only on financial risks to the company

Explanation

Under GRI, the organisation identifies its significant impacts, determines its material topics, and then reports using the relevant topic standards. It does not apply an identical list to all firms. GRI is impact-focused, not limited to financial risks, and TCFD does not remove the need to assess material topics.

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