Sustainability Reporting Set to Grow as Standards Become More Aligned

Corporate sustainability reporting is entering a period of consolidation and regulatory adjustment, but businesses should not expect disclosure requirements to disappear, according to Robin Hodess, chief executive of the Global Reporting Initiative.

In an interview with Eco-Business, Hodess argued that the long-term direction remains towards greater transparency as governments introduce mandatory requirements and investors, regulators and other stakeholders seek more information about corporate environmental and social performance.

“Companies are not going to be reporting less in the future,” she said, pointing to the broader shift from voluntary sustainability communication towards regulated disclosure.

The challenge for companies is therefore not simply to produce more information. It is to build reporting systems capable of generating credible, comparable and useful data without unnecessarily duplicating work across multiple standards.

GRI and ISSB Serve Different Reporting Needs

The International Sustainability Standards Board has emerged as an important global reference point for investor-focused sustainability disclosure. Its standards concentrate on sustainability-related risks and opportunities that could affect an organization’s financial prospects, access to capital or enterprise value.

GRI takes a different but complementary approach. Its standards focus on the impacts that an organization has on the economy, environment and people, including impacts that may not yet be financially material to the reporting company.

Hodess said the two perspectives can provide a more complete understanding of corporate performance. Financial materiality helps investors assess how sustainability issues could affect a company, while impact materiality examines how the company affects society and the natural environment.

These connections can become increasingly important over time. Environmental damage, poor labour practices or resource pressures that initially appear to be external impacts can later develop into regulatory costs, supply chain disruption, litigation, reputational damage or financing risks.

GRI and the IFRS Foundation, which oversees the ISSB, reaffirmed their cooperation in May 2026. The organizations said they were working to align common disclosures and help companies apply their respective standards efficiently while serving the different information needs of investors and wider stakeholder groups.

Hodess suggested that the priority should be greater interoperability rather than the organizational merger of reporting bodies. Clearer boundaries and better coordination between GRI, ISSB, the Taskforce on Nature-related Financial Disclosures and other initiatives could reduce duplication while preserving different forms of material information.

Reporting Remains Widespread

Recent GRI research indicates that sustainability reporting has continued to expand despite political opposition to environmental, social and governance initiatives in some markets.

An analysis of 14,682 listed companies with annual revenue above US$250 million found that 87% published a sustainability report in 2025. GRI was referenced by 40% of the companies studied, representing 62% of global market capitalization.

The findings also show that companies commonly use several frameworks rather than selecting only one. Around 80 per cent of companies referencing ISSB standards and 70% of those using the European Sustainability Reporting Standards also referenced GRI.

This overlap supports the argument that investor-focused and impact-focused disclosures are increasingly being used together. It also highlights why interoperability has become a practical concern for reporting teams.

For companies, the operational objective should be to establish a common sustainability data architecture that can supply information to different disclosure frameworks. A single verified dataset on emissions, water, workforce conditions or supply chain impacts can then be organized according to the requirements of regulators, investors and other stakeholders.

Europe Simplifies Requirements Without Abandoning Disclosure

The European Union’s sustainability reporting reforms illustrate the tension between reducing administrative burdens and maintaining access to material information.

In July 2026, the European Commission adopted revised European Sustainability Reporting Standards intended to shorten requirements, clarify reporting processes and lower compliance costs. The Commission said the revision would reduce mandatory datapoints by more than 60 per cent and total datapoints by more than 70%.

The changes do not represent an end to sustainability reporting. Instead, they aim to make disclosures more proportionate and focused on material information.

The Commission also adopted a voluntary standard for smaller companies outside the scope of the Corporate Sustainability Reporting Directive. This is intended to help them respond consistently to sustainability information requests from larger customers and financial institutions.

For sustainability teams, regulatory simplification may reduce the number of individual data points, but it does not eliminate the need for internal controls, governance and reliable data collection. Companies must still determine which topics are material, document their assessment process and support disclosures with evidence.

AI Could Improve Efficiency and Increase Scrutiny

Artificial intelligence is also changing how sustainability information is collected, processed and evaluated.

Hodess described AI as both an “amplifier” and an “accelerator”. The technology could help companies extract information from operational systems, analyse large datasets, identify inconsistencies and prepare disclosures more efficiently. At the same time, it may enable investors, regulators, researchers and civil society organizations to compare corporate claims with external evidence more quickly.

This means companies that fail to publish reliable information may not avoid scrutiny. Third parties can increasingly use satellite observations, public databases, supply chain information and automated analytical tools to estimate corporate impacts independently.

However, AI cannot make weak source data credible. Automated reporting systems may reproduce errors, generate unsupported statements or obscure the assumptions behind calculations. Human oversight, documented methodologies, data ownership and assurance procedures therefore remain essential.

Businesses adopting AI for sustainability reporting should maintain traceable links between published figures and their underlying sources. They should also establish controls for reviewing generated text, checking calculations and identifying changes made by automated systems.

Reporting Must Support Decisions

Hodess stressed that publishing a sustainability report should not be treated as the final objective. The underlying information should support business planning, capital allocation, risk management and operational improvement.

For companies pursuing net-zero targets, this means using emissions data to identify reduction opportunities rather than reporting totals only once a year. Supply chain information should guide procurement and supplier engagement, while environmental impact assessments should inform investment, product design and location decisions.

Reporting requirements are likely to continue evolving as regulators seek greater comparability and companies call for simpler processes. The number of overlapping frameworks may decline, or their requirements may become more closely aligned.

The overall demand for credible information, however, is unlikely to weaken. Companies that invest in consistent data systems, clear accountability and strong internal controls will be better positioned to meet multiple disclosure obligations and use sustainability information to support the transition to a lower-carbon and more resilient economy.

Source: www.eco-business.com