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GRI 2021 Standards — New Requirements and Implications for Commercial Real Estate

Authors: Carli Schoenleber, Chika Acholonu, Paulynn Cue

March 9, 2023

As companies look toward the ESG reporting season ahead, many are preparing to align with the 2021 version of the Global Reporting Initiative (GRI) Standards, in effect as of January 2023. The first globally applicable ESG reporting framework, GRI was created in 1997 with the aim of improving corporate accountability of environmental impacts, and it was later expanded to encompass economic, social, and governance impacts.[i] Today, more than 10,000 companies across 100 countries report their sustainability impacts using the GRI Standards.[ii]

The 2021 update to the GRI Standards was catalyzed following recommendations from the GRI Technical Committee on Human Rights Disclosure to require human rights reporting and update the Standards for better clarity and usability.[iii] This article summarizes key changes, especially those relevant for the commercial real estate industry, covering structural changes to the GRI Standards, changes to materiality criteria and processes, alignment with other reporting frameworks, new requirements on human rights reporting, and implications for the commercial real estate industry.


Structural changes to the GRI Standards between the 2016 and 2021 versions

  • There are still three universal standards (i.e., GRI 1: Foundation, GRI 2: General Disclosures, and GRI 3: Material Topics), yet the contents have been rearranged to make the process more streamlined and requirements clearer. Guidance related to materiality is now contained in a single standard, GRI 3: Material Topics, rather than being distributed throughout the GRI Standards.

  • There is now only one avenue to report in accordance with the GRI Standards, as the core and comprehensive options have been removed; however, organizations can still report in reference to the GRI Standards.

  • The definition of stakeholder shifted to “an individual or group that has an interest that is affected or could be affected by the organization’s activities.” Reflecting GRI’s growing focus on impact materiality, the second part of the previous definition was removed: “entity or individual whose actions can reasonably be expected to affect the ability of the organization to successfully implement its strategies and achieve its objectives.”

  • The Sector Standard for Coal and Sector Standard for Agriculture, Aquaculture, and Fishing were introduced, adding to the first sector standard from 2021, Sector Standard for Oil and Gas.

  • Three topic standards were removed and integrated into the universal standards: Environmental Compliance, Human Rights Assessment, and Socioeconomic Compliance. The remaining 31 topic standards were updated and aligned with changes to the universal and sector standards, but the topics and requirements remain the same.

  • Explained more below, the 2021 Standards changed the criteria for organizations to determine material topics.

  • Explained more below, there are new universal requirements related to human rights, due diligence, and responsible business conduct.[iii]


Changes to materiality criteria and process

A closer focus on impact materiality represents one of the most significant updates to the GRI Standards. Whereas financial materiality helps identify ESG issues that could impact the organization’s performance, impact materiality focuses only on how the organization impacts the economy, society, and the environment. In the 2016 version, organizations were asked to identify material topics that reflected either “significant economic, environmental, and social impacts” (i.e., impact materiality) or “their substantive influence on assessments and decisions of stakeholders” (i.e., financial materiality). Yet, feedback later indicated that many organizations chose topics solely based on stakeholder decisions, resulting in biased reporting towards financially material topics. While still important to consider, “their substantive influence on the assessments and decisions of stakeholders” is no longer a standalone criterion for assessing materiality. Moving forward, organizations must choose material topics based on their significant economic, environmental, and social impacts.

Moving forward, organizations must choose material topics based on their significant economic, environmental, and social impacts.

Despite this change, GRI still recommends that impacts and their significance are assessed through engaging with “relevant stakeholders and experts,” such as potential users of materiality assessments (e.g., investors) and experts with deep knowledge about the organization and/or its sector (e.g., academics, consultants, non-governmental organizations). For real estate companies, feedback from stakeholders and experts is particularly critical since the real estate industry still lacks a GRI Sector Standard.[iii]

GRI’s increasing focus on impact materiality is a part of a larger shift in ESG reporting toward double materiality — consideration of both impact (non-financial) materiality and financial materiality. Whereas corporate sustainability reporting has largely focused on financial materiality to date, we are seeing more regulations and frameworks (e.g., GRI) demand reporting on sustainability impacts regardless of their financial materiality. Namely, this effort is being led by regulations in the European Union, including the 2022 Corporate Sustainability Reporting Directive and the 2019 Sustainable Finance Disclosure Regulation.

As this trend takes hold, companies should aim to report their sustainability information through both an impact and financial materiality lens. For topics that are both financially material and drive negative impacts, it is especially critical that companies provide evidence that demonstrates action is being taken to mitigate impacts and financial risks to the company.


Alignment with other reporting frameworks

While GRI’s definition of materiality is focused on non-financial impacts, the GRI Standards are aligned with ESG reporting frameworks that have a financial materiality focus. For example, take the GRI and Sustainability Accounting Standards Board (SASB) Standards — on one hand, the GRI Standards allow for a broad understanding of an organization’s impacts on the environment, economy, and people. The SASB Standards, on the other hand, guide organizations to report on a focused set of industry-specific sustainability risks and opportunities that are the most financially material. As a result, using both GRI and SASB Standards for sustainability reporting allows an organization to provide decision-useful information to a wide range of stakeholders, including the public, non-governmental organizations, customers, and providers of capital.

The GRI Standards are also aligned with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and forthcoming International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards. Like the SASB Standards, the IFRS Standards will focus on financially-material sustainability risks and opportunities. Through its framework, the IFRS aims to strengthen financial reporting through the integration of sustainability disclosures. The TCFD recommendations focus on financially-material climate-related risks and opportunities. These three frameworks are aligned in that a company’s impacts on the economy, environment, and people can ultimately impact the company’s operations and/or reputation and, therefore, its financial performance. Moreover, when many companies report on their respective non-financial impacts in a standardized manner, it can provide investors with a more complete picture of the industry’s impacts, which could result in uncovering additional issues that are financially material.

For example, consider a real estate company with a high level of energy consumption — if the company’s properties are located in areas with building performance laws that mandate a certain level of energy efficiency, using too much energy could result in financial consequences, making energy efficiency financially material. Therefore, if the company follows GRI’s recommendations to report portfolio-wide energy use intensity (a measure of energy efficiency), it not only provides information on the environmental impact of its energy use but also provides sustainability information that assists investors in determining whether to provide capital to the company.


New requirements on human rights reporting

Requirements on human rights represent the most significant addition to the GRI Standards. According to the United Nations (UN), “human rights are rights inherent to all human beings, regardless of race, sex, nationality, ethnicity, language, religion, or any other status.”[iv] Examples of human rights include freedom of association and collective bargaining, freedom from forced labor, the right to privacy, and freedom of expression.

In recognizing that human rights violations are both prevalent and underreported by businesses, GRI now considers human rights as a subject area, requiring organizations to consider human rights impacts to the same degree as impacts to the economy, environment, and people. In making human rights central to the universal standards, the topic standard Human Rights Assessment was removed, though topic standards on Child Labor and Forced or Compulsory Labor remain.[iii] GRI's new human rights requirements are intended to align with leading global guidance for businesses related to human rights:

Though woven throughout the GRI Standards, new human rights requirements are particularly integral to Disclosure 2-23 (Policy commitments) and Disclosure 2-24 (Embedding policy commitments). Disclosure 2-23 asks organizations to describe policy commitments related to responsible business conduct and whether those policies include “a commitment to respect human rights.” Disclosure 2-24 follows by asking organizations to describe how these policies are integrated throughout business activities. Other human rights-focused disclosures relate to grievance mechanisms, stakeholder engagement, due diligence, and the prioritization of impacts.[v]


Managing human rights risks for commercial real estate

GRI’s new human rights standards come at a time when there is greater need for the commercial real estate industry to understand and mitigate human rights impacts. The global property and construction industry employs 7% of workers yet the construction industry is responsible for 18% of modern slavery victims, highlighting the prevalence of human rights impacts within the sector.[vi]

The global property and construction industry employs 7% of workers yet the construction industry is responsible for 18% of modern slavery victims, highlighting the prevalence of human rights impacts within the sector.

Due to the complexity of global supply chains and a high demand for low-wage, manual laborers, common human rights issues in the property and construction sector include forced or unpaid labor, unsafe working conditions, human trafficking, and child labor. Building materials with stronger ties to child and forced labor include bricks, granite, timber, tiles, and rubber.[vi] While construction- and materials-related human rights violations are more commonly known to occur in emerging economies, cases have also been documented in the United States and other developed countries.[vi],[vii]

To mitigate regulatory and reputational risks, real estate companies should implement a human rights policy and develop an ongoing process to identify, manage, and report human rights impacts. For existing buildings, this could mean evaluating the business practices of property managers, tenants, and suppliers and the working conditions of employees and vendors. For new development, it is important to assess potential impacts to surrounding communities and audit working conditions and employment practices across construction teams (including subcontractors) and the broader materials supply chain, as feasible.



As ESG reporting gains greater importance among stakeholders, it is crucial that real estate companies keep pace with the evolving landscape. GRI has recently updated its standards to reflect increasing demand for impact-focused disclosures and reporting on human rights. When applied in tandem with ESG reporting frameworks focused on financial materiality (e.g., TCFD, IFRS), the GRI Standards can help companies demonstrate their commitment to sustainability and provide stakeholders with a broad understanding of environmental and social impacts and how those impacts affect financial performance.

To ensure reporting remains in accordance with the updated GRI Standards, it is important that companies continue to apply all GRI reporting principles (see GRI 1: Foundation 2021) and publish required disclosures in GRI 2: General Disclosures 2021, GRI 3: Material Topics 2021, and any applicable GRI topic standards. Following 2021 updates, companies should pay careful attention to integrating human rights reporting and following GRI’s revised process to identify material topics.

We suggest utilizing the Excel document GRI Universal Standards - Mapping between the GRI Universal Standards 2021 and the GRI Universal Standards 2016 in conjunction with the GRI Universal Standards 2021 Frequently Asked Questions and the GRI Academy course "Reporting with GRI Standards 2021 Update." For commercial real estate firms, we further recommend that updated GRI disclosure indicators are added to materiality assessments to indicate which material topics for commercial real estate align with GRI’s material topics.

About the Authors

Carli Schoenleber

Carli is an ESG Content and Engagement Specialist for Verdani Partners and the Verdani Institute for the Built Environment (VIBE), where she is leading efforts on VIBE’s sustainable built environment book series. Carli has a decade of experience in the sustainability field, working across diverse roles in environmental communication research, environmental planning, marketing, and wetland science. She holds a B.S. in Environmental Science, Policy, and Management from the University of Minnesota and a M.S. in Forest Ecosystems and Society from Oregon State University.

Chika Acholonu

Chika is an Associate Director of ESG for Verdani Partners. He acts as the account manager for various corporate ESG clients and oversees their ESG reporting, tenant engagement, and climate risk assessment efforts. Chika also develops and delivers trainings to colleagues and clients and serves as chair of the Verdani Diversity, Equity, and Inclusion (DEI) Committee. Chika holds a B.S. in Environmental Science and Resource Management from the University of Washington

Paulynn Cue

Paulynn is the Chief Communications Officer for Verdani Partners, bringing over 20 years of experience in sustainability and ESG, business development, communications, design, and regenerative development. She has been instrumental in shaping Verdani’s programs since 2014. Paulynn studied architecture at Carnegie Mellon University, advertising at New York University, and environmental design at Parson’s School of Design, and has worked with leading organizations such as Gensler, World Building Institute, and the Intergovernmental Renewable Energy Organization Sustainable Development Commission.



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The information contained within this article was developed in accordance with best industry practices. This article was prepared without reference to any specific property or scenario and is not intended to substitute for the professional advice of an attorney, engineer, or other climate change professional. This article should not be relied on exclusively when conducting risk assessments or developing response plans. Neither Verdani LLC nor its employees or agents can be held responsible for the use or misuse of the information contained herein, and Verdani LLC hereby disclaims any liability for damages arising from the use of this information, including without limitation, direct, indirect, or consequential damages including personal injury, property loss, loss of revenue, loss of opportunity, or other loss.


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