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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

Kaveri Pharma Ltd. consults employees, investors, local communities and regulators to identify where its operations have the most significant effects on the economy, environment and people, and then reports on those. Under GRI 3: Material Topics, what is the correct basis for deciding that a topic is material?

A topic is material under GRI when it reflects the organisation's most significant impacts on the economy, environment and people, including human rights impacts. Stakeholder engagement informs the assessment. It is an impact-based test, not one based on profit effect, competitor practice or one shareholder's wish.

  1. AThe topic has the highest financial impact on the company's profit in the current year
  2. BThe topic represents the organisation's most significant impacts on the economy, environment and people, including impacts on human rightsCorrect
  3. CThe topic is one on which competitors have already published disclosures
  4. DThe topic has been requested by the largest shareholder of the company

Explanation

In GRI Standards, material topics are those representing the organisation's most significant impacts on the economy, environment and people, including human rights. This is impact materiality, determined with stakeholder input. Option A describes a financial-materiality lens, which is not the GRI test.

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