ESRS vs ISSB vs GRI: what’s the difference?
The three main sustainability reporting standards compared: who they are for, what materiality means in each, where they are mandatory, and how to report under more than one without doing the work twice.
Three sets of standards dominate sustainability reporting: the European Sustainability Reporting Standards (ESRS), the ISSB standards (IFRS S1 and S2) and the GRI Standards. They overlap a lot, but they were written for different readers and they ask different questions.
At a glance
| ESRS | ISSB (IFRS S1 and S2) | GRI Standards | |
|---|---|---|---|
| Written by | EFRAG, for the European Commission | International Sustainability Standards Board (IFRS Foundation) | Global Reporting Initiative |
| Main readers | Investors and wider stakeholders | Investors and lenders | All stakeholders: communities, employees, civil society, investors |
| Materiality | Double: impacts on people and planet, and financial effects on the company | Financial: what could reasonably affect cash flows, financing or the cost of capital | Impact: the company’s most significant impacts on the economy, environment and people |
| Topics | Environment, social and governance, with a full set of topical standards | General requirements (S1) plus climate (S2); more topics being researched | Universal, sector and topic standards across ESG |
| Mandatory? | Yes, for companies in CSRD scope in the EU | Where a country adopts it: for example Australia (AASB S2), Singapore, Malaysia, and the UK through UK SRS | Voluntary, but referenced by many regulators and stock exchanges, including India’s BRSR |
| Assurance | Limited assurance required under CSRD | Set by each country; often phased in | Not required by GRI itself |
Materiality is the big difference
Financial materiality (ISSB) asks: how do sustainability issues affect this company’s prospects? A water shortage that could shut a factory is material; the factory’s effect on local rivers is material only if it creates a financial risk.
Impact materiality (GRI) asks the opposite: how does this company affect the world? The river pollution is material whether or not it ever costs the company money.
Double materiality (ESRS) asks both questions. A topic is material if it passes either test. That is why an ESRS report usually covers more topics than an ISSB report for the same company.
Do you have to choose?
Often not. Many large companies report under two or three:
- an EU group in CSRD scope reports under ESRS, and may need ISSB-based reports for listings or subsidiaries elsewhere;
- a company listed in Singapore, Malaysia or Australia reports climate information under ISSB-based rules, and may use GRI for its wider sustainability report;
- an Indian listed company files a BRSR, which draws on GRI and other frameworks.
The standard setters have published interoperability guidance: ESRS and ISSB climate disclosures are closely aligned, and GRI and EFRAG have mapped their impact disclosures. Collect data once, at the level of detail of the strictest standard you report under, and map it to each format.
Which one should a company starting out use?
- If CSRD applies to you: ESRS. Nothing else replaces it.
- If you are listed in a country adopting ISSB: that country’s ISSB-based standard, starting with climate.
- If no rule applies yet and customers or investors are asking: GRI is a well-recognised starting point for a sustainability report, and the voluntary VSME standard is a lighter option for smaller EU businesses.
Tools that support ISSB reporting
KPMG
Global network offering ESG assurance, CSRD readiness and sustainability advisory.
Novata
ESG data and reporting platform for private markets covering SFDR, CSRD, carbon accounting and LP reporting.
Sustainability Academy
Online training platform from the Centre for Sustainability & Excellence offering ESG reporting, ESRS and net zero certificates.
Sinai
Enterprise carbon and energy management platform with measurement, supplier engagement, reporting and reduction modules.
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Tools that support ESRS reporting
Toovalu
French platform for CSRD, ESG/CSR and carbon footprint reporting with support from in-house experts, partner firms and an academy.
SAP Sustainability
SAP’s sustainability products, including Sustainability Control Tower, connected to SAP finance and supply chain data.
Achilles
Supply chain risk management, supplier audits and carbon programmes for buyers and suppliers, with an ESG-based sustainability score.
Denxpert
Software for ESG and EHS management, including CSRD reporting and compliance registers.
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Further reading
This guide is general information, not legal, tax or investment advice. Rules change; check the official sources and talk to an adviser before you rely on it.
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