The Need for Introducing EID Questions and GRI and ESRS Standards
Today’s companies can no longer guarantee sustainable growth solely based on financial performance; fulfilling environmental and social responsibilities has become an essential element for corporate success. With global issues such as climate change, resource depletion, and social inequality coming to the forefront, it is increasingly important for businesses to proactively address these problems. In this context, corporate sustainability reporting plays a crucial role in comprehensively assessing and managing environmental, social, and economic responsibilities. To achieve this, global standards such as GRI (Global Reporting Initiative) and ESRS (European Sustainability Reporting Standards) have been established as essential guidelines.
This essay aims to analyze the importance of EID (Enterprise Impact Data) questions in comparison with GRI and ESRS standards and to propose methodologies that companies should adopt to meet global criteria. By focusing on each category of the EID questions and using practical examples from global practices, we will explore ways to secure data and apply IPCC (Intergovernmental Panel on Climate Change) carbon emission analysis methodologies.
1. Company Profile
Basic company information serves as the starting point for a sustainability report. Critical factors such as the company’s name, location, industry, size, and ownership structure are addressed in GRI 102-1 to 102-7, 201-1, and in ESRS’s general disclosure requirements. This information is essential to understand the context in which a company operates and is used as key data by external stakeholders to evaluate the company’s sustainability strategy. In particular, detailed classifications according to the company’s industry and size are necessary. More granular data about industry-specific characteristics and company size are crucial for accurately assessing environmental impacts and developing strategies to address climate change.
Applying IPCC’s carbon emission analysis is also important, as securing data that reflects industry-specific emissions allows companies to more clearly understand their environmental contributions. For instance, a large European manufacturing company complied with ESRS’s general disclosure standards, clearly reporting its ownership and governance structures, which helped to strengthen trust with stakeholders.
2. Environmental Impact Assessments (EIAs) and Strategic Environmental Assessments (SEAs)
Environmental Impact Assessments (EIAs) and Strategic Environmental Assessments (SEAs) are vital tools for businesses to identify and manage environmental risks in advance. GRI 304-2 and 307-1, as well as ESRS E1-1 and E2, provide guidelines for managing environmental impacts and complying with legal regulations. These guidelines help businesses reduce environmental risks while preventing financial losses due to regulatory violations.
Companies must operate specific programs to achieve the ecosystem protection goals identified through environmental assessments, which align with GRI 304-3’s ecosystem restoration activity requirements. By doing so, businesses can strengthen their environmental responsibilities and develop sustainability strategies that comply with regulations. A multinational oil company successfully conducted EIAs and SEAs in line with GRI and ESRS standards, collaborating with local communities to reduce environmental impacts.
3. Energy Usage
Energy usage is one of the most important elements in a corporate sustainability report. GRI 302-1 to 302-5 and ESRS E1-2, E1-4 cover energy consumption, greenhouse gas (GHG) emissions, and energy efficiency improvement goals. By adopting the IPCC’s carbon emission analysis methodology, companies can monitor their energy usage patterns and develop strategies to reduce emissions.
Businesses should actively pursue technological investments and initiatives to reduce energy consumption, which aligns with the energy efficiency requirements of GRI 302-5 and ESRS E1-4. A global IT company, for example, monitors its annual energy consumption in accordance with GRI 302 and ESRS E1 and has transitioned to renewable energy sources to achieve the IPCC’s carbon reduction goals.
4. Production
The environmental impact caused by the production process directly affects a company’s sustainability performance. GRI 301-2 and 306-3, along with ESRS E5, address the efficiency of resource use, waste management, and recycling rates during production. Introducing the concept of a circular economy is crucial for maximizing resource efficiency.
Companies must establish systems that systematically manage the waste generated during production, recycling or reusing it wherever possible. This aligns with the waste management standards of GRI 306-2 and ESRS E7. A global consumer goods company, for instance, complies with GRI 301 and ESRS E5 by replacing over 50% of the resources used in its production process with recycled materials, successfully increasing resource efficiency by adopting circular economy principles.
5. Products
The sustainability of products is essential to meet the demands of today’s consumers and regulatory authorities. GRI 301-3 and ESRS E5 address the recyclability, reusability, and environmental impacts of products over their life cycles. Evaluating and managing the environmental impacts generated throughout a product’s life cycle is critical.
Businesses must assess the environmental impacts of their products throughout the life cycle and establish procedures to manage them. For example, a car manufacturer has established an electric vehicle battery recycling program in accordance with GRI 301 and ESRS E5 standards, promoting the reuse of resources and minimizing the environmental impact of products over their life cycle.
6. Waste Management
Waste management plays an important role in a company’s sustainability strategy. GRI 306-1 to 306-5, along with ESRS E5 and E7, require companies to systematically report the amount of waste generated, how it is managed, and the recycling rate. This serves as a key indicator to evaluate whether a company is minimizing resource waste and fulfilling its environmental responsibilities.
Companies should clearly report the volume of waste generated and how it is processed, with a particular focus on strategies to increase recycling and reuse rates. A global food company, for example, successfully recycles or reuses more than 80% of its waste in compliance with GRI 306 and ESRS E7, maximizing resource efficiency and reducing environmental impact.
7. Environment Economics
Environmental economics assesses how much financial resources companies invest in reducing their environmental impact. GRI 201-2 requires companies to evaluate the financial implications and opportunities of climate change, while ESRS E1-1 mandates the disclosure of climate-related financial risks and opportunities. The key question in this section is how companies link environmental performance with financial outcomes.
Businesses must clearly report the economic benefits gained from environmental initiatives, aligning with the requirements of GRI 201-2 and ESRS E1-4. A global technology company has transparently reported its financial data related to environmental performance in compliance with GRI 201-2 and ESRS E1-1, providing stakeholders with clear insights into sustainable investment performance.
Global References and Data Acquisition Methods
To comply with GRI and ESRS standards and apply IPCC’s carbon emission analysis methodology, companies need systematic approaches to data acquisition and analysis. Achieving sustainable management requires real-time data collection systems, carbon emission analysis, supply chain data management, and the use of global research and academic references.
- Building Real-time Data Collection Systems: Companies should establish systems to collect real-time data on energy consumption, waste generation, and water usage. This enables more accurate reporting on energy and resource use, meeting GRI 302 and ESRS E1-2 requirements. For example, a global manufacturing company introduced real-time energy monitoring systems to track energy consumption and emissions during production, allowing for the development of energy efficiency strategies.
- Carbon Emission Analysis: By adopting IPCC’s carbon emission analysis methodology, companies should measure both direct and indirect carbon emissions from activities such as production, logistics, and waste management. This is essential to meet GRI 305 and ESRS E1-5’s emission reporting requirements.
- Securing Supply Chain Data: To assess the environmental impact of their supply chain, companies must collect data on resource use and waste generation throughout the supply chain, as required by GRI 308-1 and ESRS E4-1. For example, a global apparel brand tracks carbon emissions generated within its supply chain and works with suppliers to introduce sustainable materials.
- Utilizing International Research Data: Companies can make use of global research and statistics provided by organizations such as the World Bank, OECD, and the UN to compare and analyze sustainability strategies and performance. This helps businesses benchmark their performance against industry standards and achieve global sustainability leadership.
- Leveraging Academic Research and Institutional Reports: Sustainability-related academic research and reports from research institutions provide reliable data and methodologies for setting sustainability goals and evaluating performance. For example, incorporating data from IPCC and research on climate change and carbon emissions enables companies to build robust strategies to address environmental threats.
Conclusion
Complying with GRI and ESRS standards provides companies with a comprehensive framework for evaluating and managing their environmental, social, and economic responsibilities. By adhering to these standards, companies can clearly report their sustainability performance, offer transparency to external stakeholders, and achieve sustainable management. Applying IPCC’s carbon emission analysis allows companies to respond effectively to climate change, improve resource efficiency, and reduce emissions.
This analysis, based on EID questions, supplements the GRI and ESRS standards by proposing additional questions and highlighting areas that need improvement. Through real-time data collection systems, carbon emission analysis, and securing data from the supply chain, companies can achieve sustainable management and proactively address climate and environmental risks.
Ultimately, by adopting these global standards, companies not only ensure regulatory compliance but also establish themselves as leaders in sustainability in the global market, maximizing economic performance while fulfilling social responsibilities. Introducing GRI and ESRS standards is essential for businesses to secure a sustainable future and build trustworthy sustainability strategies for stakeholders.