Jane Fuller is a fellow of CFA Society of the UK and senior fellow of the Centre for the Study of Financial Innovation

To lead an organisation that deals with the slew of impacts that businesses have on the environment and society, you need to have a clear view of its purpose. Eelco van der Enden, CEO of the Global Reporting Initiative (GRI) since January 2022, starts with transparency and trust. The former, aided by GRI standards, prompts change in corporate behaviour and ‘enables society to have a discussion on these impacts that is based on facts’.

‘If you look only at the financials, there is a risk that you neglect the effects on climate and society’

Trust is built via ‘rigorous due process’. The organisation’s GSSB (its standards-setting board) is guided by committees of experts drawn from its multistakeholder audience: business leaders, accountants, professors, non-governmental organisations, labour organisations. When prompted, van der Enden adds investors to the list – the primary audience for the SEC in the US as well as for the IFRS Foundation, which has just created its own sustainability standards board (ISSB).


Van der Enden advocates ‘co-operative compliance’. He says: ‘If companies are transparent and quality risk management is in place, I can rely on the information being timely, correct and complete from an auditor’s and a regulator’s perspective.’

His interest in sustainability has focused on how companies can ‘communicate to society and investors the effort they are making on these important topics, using comparable data’.

GRI, a not-for-profit organisation founded in 1997, has published standards covering such subjects as employment, procurement, emissions and customer health and safety. About 11,000 companies, including two thirds of the Fortune Global 500, use GRI standards, and 67 countries have capital market policies (set by governments or stock exchanges) that reference or require their use.

The EU sees itself as a leader in sustainability reporting, with a multistakeholder culture

Van der Enden sets his purpose in the context of a two-pillar approach to corporate reporting. One, followed by the SEC and ISSB, sees sustainability through the lens of enterprise value creation on behalf of investors – ‘inside out’, as he puts it.

The other comes from the outside in, through a company’s impact on things that are important to others. If you look only at the financials, he says, ‘there is a risk that you neglect the effects on climate and society’.

EU takes the lead

Although GRI was founded in the US, its cultural roots are European – its headquarters have long been in Amsterdam. Van der Enden refers to the philosophy of Jean-Jacques Rousseau, who held that humans give away their individual rights to a state that can provide collective benefits. He compares this with the ‘pay as you go’ approach of the US. The EU sees itself as a leader in sustainability reporting, with a political culture that is conducive to a multistakeholder approach.

GRI has been working with EFRAG, the EU‘s financial reporting advisory group, on sustainability reporting standards. It is clearly comfortable in the public policy domain, but what about the tensions inherent in the multistakeholder approach?

If a business invests in automation, for instance, it will shed jobs – van der Enden points out that other jobs will be created in IT. ‘Making difficult decisions is the right, or curse, of being on a board,’ he says.

Under double materiality, external impact is accounted for separately from financial impact


Tensions can also be seen in the definition of materiality. ‘On whose behalf do you make the standards? If for investors, their primary interest is in yield, revenue – it’s all related to the financials. But that ignores big reputational issues.’

If you just stick to the legal minimums, for instance on child labour, you could employ 12-year-olds in some countries. But a good company places other norms and ethics on top that are material to ‘what we are and what we stand for’.

Under double materiality, reflecting the two pillars, external impact is accounted for separately from financial impact. This is less idealistic than the ISSB’s concept of dynamic materiality, where information of potential interest to investors cascades down from external effects to the traditional bottom line.

Grand scale

Van der Enden acknowledges that sustainability reporting suits companies that not only want to do the right thing but can afford the process. He adds, though, that concerns about the cost of compliance, business secrets and investor reaction are often overdone.

‘In the end, when an organisation starts to report on these topics, nothing happens and they get a better grip on their internal processes and on their relations with stakeholders.’

Nevertheless, he sees a potential ‘mess’ in the implementation of the EU’s immediate ambition not only to have 50,000 companies following the sustainability standards but also having them independently assured. ‘It’s not possible to organise, or if it is, then it would take the next 10 years.’ And the political decree leaves out a multitude of smaller entities.

To try to connect the potentially divergent pillars, GRI and the ISSB have signed a memorandum of understanding. They will try to avoid duplication and to align definitions. Topics they may work on together, according to van der Enden, include biodiversity, which is already covered by a GRI standard.

Under the investor view of corporate reporting, if you satisfy the information needs of those who put up the capital and hold maximum risk, you will cover the needs of others. Under the multistakeholder view, if companies report on their impact on people and the planet, much of the information will be of interest to investors. Van der Enden will play a key role in determining whether these views are complementary or competing.

More information

See also the AB article ‘Sustainability reporting will cost’

Find out about ACCA’s sustainability playbook for small practitioners


Jan 2022
CEO, Global Reporting Initiative

Member of tax technical committee, Global Reporting Initiative

Chair, Accountancy Europe tax policy group

Partner, PwC Netherlands