Skip to content

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

Narmada Power Ltd.'s board is debating the scope of its GRI-based report. A director argues that because the company's coal supplier, not the company, causes certain land-degradation impacts, these need not be covered. Under the GRI approach to material topics, what is the correct view?

The director is wrong. Under GRI, impact assessment covers impacts the organisation causes, contributes to, or is directly linked to through business relationships, including suppliers. Land degradation in the coal supply chain can be a material topic even though the supplier is not owned by the company.

  1. AOnly impacts occurring within the company's own legal entities may be reported
  2. BImpacts linked to its activities through business relationships, such as suppliers, must be considered when determining material topicsCorrect
  3. CSupplier impacts are reportable only if the company holds a majority stake in the supplier
  4. DSupplier impacts are reported only in a separate regulatory filing and never in the sustainability report

Explanation

GRI 3 asks an organisation to consider impacts it causes, contributes to, or is directly linked to through its business relationships. Value-chain impacts such as supplier-driven land degradation can therefore be material regardless of ownership. Limiting scope to owned entities or majority-held suppliers is a narrower rule that GRI does not apply.

Did you get it right without looking?

One question tells you little. A timed set on Integrated Reporting Framework, Global Reporting Initiative Framework and Business Responsibility and Sustainability Reporting shows your real accuracy, how long you take and where you lose marks.

Practise Integrated Reporting Framework, Global Reporting Initiative Framework and Business Responsibility and Sustainability ReportingFree diagnostic mock

More Integrated Reporting Framework, Global Reporting Initiative Framework and Business Responsibility and Sustainability Reporting questions