Battle of giants: GRI vs SASB vs IR
The big three environmental, social and corporate governance reporting frameworks duke it out. Read More

This is part 1 of 2. Read part 2 here.
Navigating the unexplored waters of EESG frameworks and indicators is not an easy task, especially if you are not confident in your map.
With all the “maps” (that is, frameworks and guidelines) available, choosing the right one is a crucial decision for the “captain” (such as the manager). Given the fast-changing regulatory environment and the increasing diversification of audiences (investors, the public, employees and NGOs) the risk of falling short on transparency and compliance can be extremely high. This type of risk is complex and comes from a variety of sources such as industry peers, supply-chains and influential stakeholder groups.
Minimizing this risk is key to ensuring that the investment of resources into EESG reporting leads to a positive return. Therefore, before gathering huge amounts of data on CO2 emissions, workforce diversity and board composition, it is essential to determine what framework best addresses your reporting needs and goals.
Collecting information on each of the different reporting frameworks is time consuming. There are global, national and local regulations to take into account, peers and competitors to benchmark, stakeholders to engage and materiality assessments to carry out. With Datamaran, its possible to streamline and jumpstart this process to go beyond the most obvious comparative analysis of the different reporting frameworks.
Let’s look at an example
We compared the three dominant EESG reporting frameworks: the Global Reporting Initiative (GRI), the International Integrated Reporting Council IR Framework, and the Sustainability Accounting Standards Board guidelines (SASB).
Each of these frameworks adopts a different definition of materiality, or the principle determining which issues are considered relevant in influencing decision-makers. The GRI G4 indicates that “the report should cover Aspects that 1. reflect the organization’s significant economic, environmental, and social impacts; or 2. substantively influence the assessments and decisions of stakeholders”. The SASB Implementation Guide does not define materiality, but instead refers to the definition set out by the US Supreme Court: “A substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of information made available.” Finally, the IIRC states that “an integrated report should disclose information about matters that substantively affect the organization’s ability to create value over the short, medium and long term.”
Each emphasizes different elements of the broad ESG universe. While GRI G4 builds its materiality around a multi-stakeholder approach, SASB focuses on investor-centric material ESG information. <IR> materiality relies on value creation across six different ‘capitals’: financial, manufactured, social and relationship, intellectual, human and natural.
A strategic approach requires the understanding of each framework’s idiosyncrasies.
The Datamaran database includes more than 40,000 reports from over 6,100 organizations. Where other data providers offer only report metadata, we analyze the content using Natural Language Processing techniques and compare it to disclosure requirements coming from both direct and indirect sources (e.g. supplychain), as well as regional and global regulations, sector/industry peers, stakeholders and digital and social media sources
We looked for references to each of the three reporting frameworks in Annual Financial and Sustainability reports for the period from 2012 to 2015.

Please note that the Y-Axis begins at 75%.
As already reported by KPMG, GRI is the the dominant EESG reporting guideline. However, our analysis demonstrates that the other frameworks are increasingly closing the gap, as evidenced by the growing trend in references to <IR> and SASB.
Zooming in 2015, we can identify those regions and sectors that are leading the rise of SASB and <IR>.

As expected, SASB is more dominant in the Americas, while <IR> represents a significant portion of the references to EESG reporting in Africa. Indeed, the King Report on Corporate Governance (King III) in South Africa requires companies listed on the Johannesburg Stock Exchange to prepare ‘integrated’ reports including financial and non-financial issues.

When looking at the sector distribution, both the Financial Services and Health Care and Pharmaceuticals sectors put more emphasis on SASB, while <IR> has a significant share in Utilities.
EESG reporting frameworks guide first-time reporters in understanding which environmental, social, and governance issues they should address. In addition, they help early-reporters structure their reporting activity through their contribution to the the development of systematic processes and controls.
Check out Part 2 when we will complete our analysis by zooming in on the specific content addressed in financial and sustainability reports.
