Guidance to 2-1-a
If the organization uses a commonly known trading name or business name that is different from its legal name, it should report this in addition to its legal name.

Guidance to 2-1-b
The nature of ownership and the legal form of the organization refers to whether it is publicly or privately owned, and whether it is an incorporated entity, a partnership, a sole proprietorship, or another type of entity such as a nonprofit, an association, or a charity.

Guidance to 2-1-c
Headquarters are an organization’s global administrative center, the place from which it is controlled or directed.

Guidance to 2-1-d
If the organization has reported its countries of operation elsewhere, such as in its audited consolidated financial statements or financial information filed on public record, the organization can provide a link or reference to this information. The organization can also report the regions or specific locations within countries (e.g., states, cities) where it has operations, if this provides contextual information for understanding the organization’s impacts.

Guidance to 2-2-a
The entities reported under 2-2-a form the basis for reporting the disclosures in this Standard and for determining the organization’s material topics.

Requirement 2-2-a includes those entities that the organization controls or has an interest in and are included in its sustainability reporting, such as subsidiaries, joint ventures, and affiliates, including minority interests. The organization should report information for the same group of entities as covered in its financial reporting.

When determining its material topics, the organization should consider the impacts of additional entities with which it has business relationships that are not included in the list reported under 2-2-a. See section 1 in GRI 3: Material Topics 2021 for more information.

Guidance to 2-2-a and 2-2-b
If all the entities in the organization’s financial reporting are also included in its sustainability reporting, a brief statement of this fact, including a link or reference to the list of entities included in its audited consolidated financial statements or financial information filed on public record, is sufficient to comply with 2-2-a and 2-2-b.

The organization should separately specify any additional entities included in the sustainability reporting that are not included in its financial reporting.

Guidance to 2-2-c
A minority interest is an ownership interest in an entity that is not controlled by the parent entity.

Guidance to 2-3-a
The organization can specify the frequency of sustainability reporting as ‘annual’. See the Timeliness principle in GRI 1: Foundation 2021 for more information.

Guidance to 2-3-a and 2-3-b
The reporting period refers to the time period covered by the reported information and should include the start and end dates (e.g., 1 January 2022 to 31 December 2022, 1 July 2022 through 30 June 2023).

The organization should report the information for the same reporting period as covered in its financial reporting. The organization should also publish the information at the same time as its financial reporting, where this is possible.

The organization should provide a restatement of information when it has learned that the previously reported information needs to be revised. Restatements of information from previous reporting periods can correct an error, or account for changes in measurement methodology or to the nature of the business. Restatements of information ensure consistency and enable comparability of information between reporting periods. See the Comparability principle in GRI 1: Foundation 2021 for more information.

The organization should report the criteria used to determine when a change or error in previously reported information is considered significant enough to provide a restatement. A change or error could be significant when it influences information users’ decision-making (e.g., it influences the analysis of the changes in the organization’s impacts over time).

For example, if an organization adopts a new, more accurate method for measuring greenhouse gas (GHG) emissions, it may subsequently experience a reduction in its previously reported GHG emissions that meets the organization’s restatement criteria. The organization then restates its previously reported GHG emissions. In such a case, the organization is required to explain that it has restated its previously reported GHG emissions due to the new measurement methodology and that this has resulted in lower GHG emissions than previously reported. The organization should also report the quantitative change observed (e.g., GHG emissions are 10% lower than the emissions previously reported).

If the organization has not made any restatement in the reporting period, a brief statement of this fact is sufficient to comply with the requirement.

Guidance to 2-4-a-i
Examples of reasons for restatements of information include:

• change of base period or length of the reporting period;
• change in the nature of the business;
• change in the measurement methodologies or in the definitions used;
• disposals, mergers, or acquisitions;
• error made in previous reporting periods.

Guidance to 2-4-a-ii
The effect of the restatement refers to the consequences of the change or correction made to previously reported information. If the restatement relates to quantitative information, the organization should specify the quantitative change in the restated information (e.g., GHG emissions are 10% lower compared to the level of emissions previously reported).

See section 5.2 in GRI 1: Foundation 2021 for information on external assurance.

Guidance to 2-5-b-ii
If this information is covered in the external assurance reports or statements that the organization has provided a link or a reference to under 2-5-b-i, then a brief statement of this fact is sufficient to comply with the requirement.

The organization can also describe, in accessible language:

• the scope of information and processes covered;
• the responsibilities of the organization relative to the assurance provider;
• the opinion or conclusions formally signed off by the assurance provider;
• a summary of the work performed;
• information on the experience and qualifications of the assurance provider, e.g., profile and level of subject matter expertise of the individuals involved.

Guidance to 2-5-b-iii
An assurance provider conducting external assurance needs to demonstrate independence from the organization to reach and publish objective and impartial conclusions about the organization’s sustainability reporting.

Guidance to 2-6-a
Sectors can be identified according to categories, such as the public or private sector; or industry-specific categories, such as the education sector or the financial sector.

Depending on the organization’s activities, sectors can be identified using the GRI Sector Standards or classification systems such as the Global Industry Classification Standard (GICS®), the Industry Classification Benchmark (ICB), the International Standard Industrial Classification of All Economic Activities (ISIC), and the Sustainable Industry Classification System (SICS®).

Guidance to 2-6-b
The organization’s value chain includes the range of activities carried out by the organization, and by entities upstream and downstream from the organization, to bring the organization’s products or services from their conception to their end use. Entities upstream from the organization provide products or services used in the development of the organization’s own products or services. Entities downstream from the organization are those that receive products or services from the organization. Entities in the value chain include entities beyond the first tier, both upstream and downstream.

The information reported under 2-6-b provides a context for understanding the organization’s impacts across its value chain, including through the use of its products and services. Describing the markets served provides further information on the groups of customers targeted by the organization’s products and services.

The organization is not required to provide a detailed description of each activity in its value chain. Instead, it can provide a high-level overview of its value chain.

Guidance to 2-6-b-i
When describing its activities, the organization should report its total number of operations and explain how it defines ‘operation’.

When describing its products and services, the organization should report:

• the quantity of products or services provided during the reporting period (e.g., number of products or services provided, net sales of products or services provided);
• whether it sells products or services that are banned in certain markets or are the subject of stakeholder concerns or public debate, including the reason for the ban or concerns and how the organization has responded to these concerns.

When describing the markets served, the organization can report:

• the geographic locations where products and services are offered;
• the demographic or other characteristics of the markets;
• information on the size and relative importance of the markets (e.g., net sales, net revenues).

Guidance to 2-6-b-ii
The organization can describe:

• the types of suppliers (e.g., brokers, contractors, wholesalers);
• the estimated number of suppliers throughout its supply chain and in each tier (e.g., first tier, second tier);
• the types of activities related to the organization’s products and services carried out by its suppliers (e.g., manufacturing, providing consulting services);
• the nature of its business relationships with its suppliers (e.g., long-term or short-term, contractual or non-contractual, project-based or event-based);
• the sector-specific characteristics of its supply chain (e.g., labor-intensive);
• the estimated monetary value of payments made to its suppliers;
• the geographic location of its suppliers.

Guidance to 2-6-b-iii
The organization can describe:

• the types of downstream entities (e.g., customers, beneficiaries);
• the estimated number of downstream entities;
• the types of activities related to the organization’s products and services carried out by the downstream entities (e.g., manufacturing, wholesale, retail);
• the nature of its business relationships with the downstream entities (e.g., long-term or short-term, contractual or non-contractual, project-based or event-based);
• the geographic location of the downstream entities.

Guidance to 2-6-c
Other relevant business relationships include relationships that the organization has with entities that are not described as part of its value chain under 2-6-b. These may include business partners (e.g., joint ventures) and other entities directly linked to the organization’s operations, products, or services (for examples, see the note in the definition of ‘business relationships’).

The organization can report the types of entities, their activities, and their geographic location.

Guidance to 2-6-d
Requirement 2-6-d entails describing significant changes in the organization’s sectors, value chain, and other business relationships compared to the previous reporting period. This information can help explain changes to the organization’s impacts. Examples of significant changes that can be reported under this disclosure are changes in activities such as the opening, closing, or expansion of facilities; changes in the structure of the organization’s supply chain or in its relationships with suppliers, including selection and termination; or changes in the location of its suppliers.

Together with Disclosure 2-8, this disclosure gives insight into the organization’s approach to employment, including the scope and nature of impacts arising from its employment practices. It also provides contextual information that aids an understanding of the information reported in other disclosures, and serves as the basis for calculation in other disclosures, such as Disclosure 2-21 Annual total compensation ratio and Disclosure 2-30 Collective bargaining agreements in this Standard.

This disclosure covers all employees who perform work for any of the organization’s entities included in its sustainability reporting as reported under Disclosure 2-2 in this Standard.

See references [7], [19], [22], [23], [24], [26], and [30] in the Bibliography.

Guidance to 2-7-a
An employee is an individual who is in an employment relationship with the organization according to national law or practice.

Providing a breakdown of employees by gender gives insight into gender representation across the organization. Providing a breakdown of employees by region gives insight into regional variations. A region can refer to a country or other geographic locations, such as a city or a world region.

See Table 1 and Table 2 of this Standard for examples of how to present this information.

Guidance to 2-7-b
The definitions of permanent, temporary, non-guaranteed hours, full-time, and part-time employees differ between countries. If the organization has employees in more than one country, it should use the definitions as per the national laws of the countries where the employees are based to calculate country-level data. The country-level data should then be added up to calculate total numbers, disregarding differences in national legal definitions.

Non-guaranteed hours employees are employed by the organization without a guarantee of a minimum or fixed number of working hours. The employee may need to make themselves available for work as required, but the organization is not contractually obligated to offer the employee a minimum or fixed number of working hours per day, week, or month. Casual employees, employees with zero-hour contracts, and on-call employees are examples that fall under this category.

If the organization is unable to report exact figures, it can report estimates of the number of employees to the nearest ten or, where the number of employees is greater than 1,000, to the nearest 100, and explain this under 2-7-c.

See Table 1 and Table 2 of this Standard for examples of how to present this information.

Guidance to 2-7-c
The organization can report the total number of employees and the number of permanent, temporary, non-guaranteed hours, full-time, and part-time employees in head count or full-time equivalent (FTE). Reporting these numbers in head count gives insight into the number of individual employees, whether full-time or part-time employed. Reporting these numbers in FTE gives insight into the hours worked.

The organization can use another methodology for reporting these numbers.

Reporting the number of employees at the end of the reporting period provides information for that point in time, without capturing fluctuations during the reporting period. Reporting these numbers in averages across the reporting period takes into account fluctuations during the reporting period.

Guidance to 2-7-d
Quantitative data, such as the number of temporary or part-time employees, is unlikely to be sufficient on its own. For example, a high proportion of temporary or part-time employees could indicate lack of employment security for employees, but it could equally signal workplace flexibility when offered as a voluntary choice. For this reason, the organization is required to report contextual information to help information users interpret the data.

The organization can explain the reasons for temporary employment. An example of such a reason is the recruitment of employees to undertake work on a temporary or seasonal project or event. Another example is the standard practice to offer a temporary contract (e.g., six months) to new employees before an offer of permanent employment is made. The organization can also explain the reasons for non-guaranteed hours employment.

The organization can explain how it defines full-time employment. If the organization has employees in more than one country, it can report the definitions of full-time employment it uses for the regions that cover these countries. The organization can also explain the reasons for part-time employment. Examples of such reasons are to accommodate employees’ requests to work reduced hours, or because the organization is unable to provide full-time employment to all employees.

If there are differences in permanent, temporary, non-guaranteed hours, full-time, and part-time employment between genders or between regions, the organization can explain the reasons for these differences.

Guidance to 2-7-e
Requirement 2-7-e enables the organization to explain how the numbers of employees vary during the reporting period compared to the previous reporting periods (i.e., whether the numbers have increased or decreased). It can also include the reasons for the fluctuations. For example, an increase in the number of employees during the reporting period could be due to a seasonal event. Conversely, a decrease in the number of employees compared to the previous reporting period could be due to the completion of a temporary project.

It is up to the organization to determine which fluctuations in the number of employees it considers significant to report under 2-7-e. The organization should report its threshold for determining significant fluctuations.

If there are no significant fluctuations in the number of employees during the reporting period or between reporting periods, a brief statement of this fact is sufficient to comply with the requirement.

Table 1. Example template for presenting information on employees by gender

* Gender as specified by the employees themselves.

Table 2. Example template for presenting information on employees by region

This disclosure provides an understanding of how much the organization relies on workers who are not employees to perform its work, in comparison to employees. This information is important for understanding how many workers in total perform work for the organization, because workers who are not employees are not represented in employment figures reported under Disclosure 2-7.

Disclosure 2-8, together with Disclosure 2-7, gives insight into the organization’s approach to employment, as well as the scope and nature of impacts arising from its employment practices. It also provides contextual information that aids an understanding of the information reported in other disclosures.

This disclosure covers all workers who are not employees and whose work is controlled by any of the organization’s entities included in its sustainability reporting as reported under Disclosure 2-2 in this Standard.

If all the workers performing work for the organization are employees and the organization does not have any workers who are not employees, a brief statement of this fact is sufficient to comply with the requirements under this disclosure.

See references [7], [19], [22], [23], [24], [26], and [30] in the Bibliography.

Guidance to 2-8-a
Workers who are not employees are those who perform work for the organization but are not in an employment relationship with the organization.

This disclosure requires the organization to report the number of workers who are not employees and whose work is controlled by the organization. Control of work implies that the organization directs the work performed or has control over the means or methods for performing the work.

The organization might have sole control of the work or share control with one or more organizations (e.g., suppliers, customers, or other business partners, such as in joint ventures). Types of workers who are not employees and whose work is controlled by the organization include agency workers, apprentices, contractors, home workers, interns, self-employed persons, sub-contractors, and volunteers. The organization should report how it has determined when it has control of the work for workers who are not employees.

The following are examples of workers who are not employees and whose work is controlled by the organization. The following workers are included under this disclosure:

• Contractors hired by the organization to perform work at the organization’s workplace, in a public area (e.g., on a road), or directly at the workplace of the organization’s client.
• Workers of one of the organization’s suppliers, where the organization instructs the supplier to use particular materials or work methods to manufacture the products or deliver the services.
• Volunteers or interns performing work for the organization.

The following are examples of workers who are not employees and whose work is not controlled by the organization. The following workers are not included under this disclosure:

• Workers of an equipment supplier to the organization who perform regular maintenance on the supplier’s equipment (e.g., photocopy machines at the organization’s workplace) as stipulated in the contract between the equipment supplier and the organization.
• Workers of one of the organization’s suppliers, if the organization sources standard products manufactured using the supplier’s production methods (e.g., purchasing stationery that is a standard product of the supplier).

If the organization cannot report exact figures, it can report estimates of the number of workers who are not employees to the nearest ten or, where the number of workers who are not employees is greater than 1,000, to the nearest 100, and explain this under 2-8-b.

Guidance to 2-8-a-i and 2-8-a-ii
When reporting its contractual relationship with the most common types of workers, the organization should report whether it engages them directly or indirectly through a third party, and in the latter case, who this third party is (e.g., employment agency, contractor).

It is sufficient that the organization provides a general description. The organization is not required to report the type of worker, contractual relationship, and work performed for every worker who is not an employee.

Guidance to 2-8-b
The organization can report the number of workers who are not employees in head count or full-time equivalent (FTE). The head count gives insight into the number of individual workers, whether on a full-time or part-time basis. The FTE gives insight into the hours worked. The organization can use another methodology for reporting this number.

Reporting the number of workers who are not employees at the end of the reporting period provides information for that point in time without capturing fluctuations during the reporting period. Reporting this number as an average across the reporting period takes into account fluctuations during the reporting period.

Guidance to 2-8-c
Requirement 2-8-c enables the organization to explain how the number of workers who are not employees varies during the reporting period or compared to previous reporting periods (i.e., whether the numbers have increased or decreased). It can also include the reasons for the fluctuations. For example, an increase in the number of workers who are not employees during the reporting period could be due to a seasonal event. Conversely, a decrease in the number of workers who are not employees compared to the previous reporting period could be due to the completion of a temporary project.

It is up to the organization to determine which fluctuations in the number of workers it considers significant to report under 2-8-c. The organization should report its threshold for determining significant fluctuations.

If there are no significant fluctuations in the number of workers who are not employees during the reporting period or between reporting periods, a brief statement of this fact is sufficient to comply with the requirement.

Guidance to 2-9-c
The organization can describe the composition of the highest governance body and its committees by additional indicators of diversity, such as age, ancestry and ethnic origin, citizenship, creed, disability, or any other indicators of diversity that are relevant for reporting.

Guidance to 2-9-c-ii
‘Independence’ refers to conditions that enable the members of the highest governance body to exercise independent judgment free from any external influence or conflicts of interest. See reference [20] in the Bibliography for more information on independence criteria for governance bodies.

Guidance to 2-9-c-iv
A position or commitment held by a highest governance body member is significant when the time and attention it demands compromises the member’s ability to perform its duties in the organization. Significant positions can include cross-board memberships.

Guidance to 2-9-c-vii
Competencies relevant to the impacts of the organization include competencies relevant to impacts commonly associated with the organization’s sectors, products, and geographic locations.

Guidance to 2-10-b-iii
‘Independence’ refers to conditions that enable the members of the highest governance body to exercise independent judgment free from any external influence or conflicts of interest. See reference [20] in the Bibliography for more information on independence criteria for governance bodies.

Guidance to 2-10-b-iv
Competencies relevant to the impacts of the organization include competencies relevant to impacts commonly associated with the organization’s sectors, products, and geographic locations.

For more information about the role of the highest governance body in overseeing the management of the organization’s impacts, see reference [20] in the Bibliography.

Guidance to 2-12-b-i
Requirement 2-12-b-i covers the role of the highest governance body in stakeholder engagement. The organization is also required to report information about stakeholder engagement under other disclosures, such as under the disclosures in section 5 of this Standard.

The organization can describe the frequency of engagement between the highest governance body and stakeholders as well as the means of engagement. If stakeholder engagement is delegated, the organization can report to whom it is delegated and how the feedback received is provided to the highest governance body.

The organization can report whether the highest governance body has established a sustainability reporting committee to support the highest governance body’s review and approval process. The organization can also report whether the highest governance body reviews the adequacy of the organization’s internal controls to strengthen the integrity and credibility of the organization’s sustainability reporting (see section 5.2 in GRI 1: Foundation 2021 for more information). The involvement of the highest governance body and senior executives in developing the organization’s policy and practice for seeking external assurance is reported under Disclosure 2-5 in this Standard.

See reference [20] in the Bibliography.

Guidance to 2-15-b-iii
The organization should use the definition of controlling shareholder applied in the organization’s consolidated financial statements or equivalent documents.

Critical concerns include concerns about the organization’s potential and actual negative impacts on stakeholders raised through grievance mechanisms and other processes. They also include concerns identified through other mechanisms about the organization’s business conduct in its operations and its business relationships. See guidance to Disclosure 2-25 and Disclosure 2-26 in this Standard for more information.

Guidance to 2-19-a-i
Fixed pay and variable pay can include performance-based pay, equity-based pay, bonuses, and deferred and vested shares.

If the organization uses performance-based pay, it should describe how remuneration for senior executives is designed to reward long-term performance.

Guidance to 2-19-a-iii
Termination payments are all payments and benefits given to a departing member of the highest governance body or senior executive whose appointment is terminated. Termination payments extend beyond monetary payments, from transferring property to automatic or accelerated vesting of incentives.

If the organization provides termination payments, it should explain whether:

• notice periods for highest governance body members and senior executives are different from those for other employees;
• termination payments for highest governance body members and senior executives are different from those for other employees;
• departing highest governance body members and senior executives receive payments other than those related to the notice period;
• any mitigation clauses are included in the termination arrangements.

Guidance to 2-19-a-iv
Clawbacks are repayments of previously received compensation that a highest governance body member or senior executive is required to make to their employer if certain conditions of employment or goals are not met.

Guidance to 2-19-a-v
The organization should report the differences between the retirement benefit schemes and the contribution rates for the highest governance body members, senior executives, and all other employees.

Remuneration policies are established to ensure that the remuneration arrangements help recruit, motivate, and retain the highest governance body members, senior executives, and other employees. Remuneration policies further support the organization’s strategy and contribution to sustainable development and align with stakeholders' interests.

Guidance to 2-21-a and 2-21-b
This disclosure covers all employees as reported under Disclosure 2-7 in this Standard.

Annual total compensation includes salary, bonus, stock awards, option awards, non-equity incentive plan compensation, change in pension value, and nonqualified deferred compensation earnings provided over the course of a year. When calculating the ratio, the organization should, depending on the organization’s remuneration policies and availability of data, consider all of the following:

• Base salary, which is the sum of guaranteed, short-term, and non-variable cash compensation.
• Total cash compensation, which is the sum of the base salary and cash allowances, bonuses, commissions, cash profit-sharing, and other forms of variable cash payments.
• Direct compensation, which is the sum of total cash compensation and total fair value of all annual long-term incentives (e.g., stock option awards, restricted stock shares or units, performance stock shares or units, phantom stock shares, stock appreciation rights, and long-term cash awards).

The annual total compensation ratio can be calculated using the following formula:

The change in the annual total compensation ratio can be calculated using the following formula:

Guidance to 2-21-c
Quantitative data, such as the annual total compensation ratio, may not be sufficient on its own to understand pay disparity and its drivers. For example, pay ratios can be influenced by the size of the organization (e.g., revenue, number of employees), its sector, its employment strategy (e.g., reliance on outsourced workers or part-time employees, a high degree of automation), or currency volatility.

The difference in pay disparity reported over the years may be the result of a change in the organization’s compensation policy or the level of compensation for its highest-paid individual or employees, a change in calculation methodology (e.g., selection of the median annual total compensation, inclusions or exclusions) or an improvement in data collection processes. For this reason, the organization is required to report contextual information to help information users interpret the data and understand how it has been compiled.

The organization should provide the following contextual information:

• Whether any employees reported under Disclosure 2-7 in this Standard have been excluded.
• Whether full-time equivalent (FTE) pay rates are used for each part-time employee.
• A list of the types of compensation included.
• The title of the highest-paid individual.

The organization should describe:

• its short, medium, and long-term vision and strategy to manage its impacts on the economy, environment, and people, including impacts on their human rights, across the organization’s activities and business relationships;
• how its purpose, business strategy, and business model aim to prevent negative impacts and achieve positive impacts on the economy, environment, and people;
• its short and medium-term strategic priorities for contributing to sustainable development, including how the priorities are aligned with authoritative intergovernmental instruments;
• the broader trends (e.g., macroeconomic, social, political) affecting the organization and its strategy for contributing to sustainable development;
• the key events, achievements, and failures associated with the organization’s contribution to sustainable development during the reporting period;
• a view of performance against goals and targets related to the organization’s material topics during the reporting period;
• the organization’s main challenges, goals, and targets regarding its contribution to sustainable development for the next year and the coming three to five years.

This disclosure covers the organization’s policy commitments for responsible business conduct, including the commitment to respect human rights. These commitments can be set out in a stand-alone policy document or be included within one or more other policy documents, such as codes of conduct.

The Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises [12], the OECD Due Diligence Guidance for Responsible Business Conduct [11], and the United Nations (UN) Guiding Principles on Business and Human Rights [14] set out expectations for organizations in relation to these policy commitments.

Guidance to 2-23-a
The organization should report the expectations, values, principles, and norms of behavior set out in the policy commitments.

The organization can also report how the policy commitments were developed, including the internal and external expertise that informed the policy commitments.

Guidance to 2-23-a-i
See the Bibliography for a list of authoritative intergovernmental instruments for responsible business conduct.

The organization can also make a reference to other standards or initiatives that it participates in.

Guidance to 2-23-a-iii
The precautionary principle is set out in Principle 15 of the UN Rio Declaration on Environment and Development [18]. It states: ‘Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.’

The precautionary principle means taking early action to prevent and mitigate potential negative impacts in situations where conclusive scientific understanding or evidence is lacking, but there is sufficient reason to expect serious or irreversible damage.

While the precautionary principle is most often associated with the protection of the environment, it can be applied to other areas, such as health and safety. The organization can describe the areas where it applies the precautionary principle.

The application of the precautionary principle can be reported under 3-3-d-i in GRI 3: Material Topics 2021, as part of the organization’s actions to prevent or mitigate potential negative impacts for each material topic.

Guidance to 2-23-b-i
Human rights are rights inherent to all human beings and are all interrelated, interdependent, and indivisible.

The internationally recognized human rights include, at a minimum, the rights set out in the UN International Bill of Human Rights [15] and the principles concerning fundamental rights set out in the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work [5]. The UN International Bill of Human Rights consists of the Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights, and the International Covenant on Civil and Political Rights and its two Optional Protocols.

Other UN instruments elaborate further on the rights of indigenous peoples; women; national or ethnic, religious and linguistic minorities; children; persons with disabilities; and migrant workers and their families. There are also standards of international humanitarian law that apply in situations of armed conflict, such as the International Committee of the Red Cross (ICRC) Geneva Conventions of 1949 [1].²

At the regional level, binding treaties as well as non-binding instruments provide region-specific frameworks for human rights.³

If the policy commitment covers all internationally recognized human rights, a brief statement of this fact is sufficient to comply with the requirement. The organization can also state if the policy commitment references certain rights that require particular attention. For example, an organization can state that its policy commitment covers all internationally recognized human rights, and also references the rights to privacy and freedom of expression in particular because the organization has identified that its activities have an impact on these rights.

If the policy commitment covers only some internationally recognized human rights, the organization is required to state the rights that are covered. It can explain why the policy commitment is limited to these rights.

Guidance to 2-23-b-ii
Categories of stakeholders that the organization gives particular attention to can include consumers, customers, employees and other workers, and local communities. They can also include individuals belonging to groups or populations that are considered to be at risk or vulnerable groups, such as children; human rights defenders; indigenous peoples; migrant workers and their families; national or ethnic, religious and linguistic minorities; persons who might be discriminated against based on their sexual orientation, gender identity, gender expression, or sex characteristics; persons with disabilities; or women.

For example, a bank may give particular attention in its policy commitment to avoid discriminating against specific categories of customers, or a mining organization may give particular attention to avoid infringing on the rights of indigenous peoples.

Guidance to 2-23-d
The most senior level may differ between organizations. For example, the most senior level in an organization could be the highest governance body (e.g., the board) or the most senior executive (e.g., chief executive officer).

The organization can also report the dates of approval and adoption of the policy commitments, and how frequently the commitments are reviewed.

Guidance to 2-23-e
If the policy commitments apply to all of the organization’s activities and business relationships equally, a brief statement of this fact is sufficient to comply with the requirement.

If the policy commitments apply to only some of the organization’s activities (e.g., they apply only to entities located in certain countries or to certain subsidiaries), the organization should report which activities the commitments apply to. It can also explain why the commitments are limited to these activities.

If the policy commitments apply to only some of the organization’s business relationships, the organization should specify the types of business relationships the commitments apply to (e.g., distributors, franchisees, joint ventures, suppliers). It can also explain why the commitments are limited to these business relationships. The organization should also explain whether the business relationships are obligated to abide by the policy commitments or are encouraged (but not obligated) to do so.

Guidance to 2-23-f
The organization can report:

• whether the policy commitments need to be read, agreed to, and regularly signed by all workers, business partners, and other relevant parties, such as governance body members;
• the means through which it communicates the policy commitments (e.g., newsletters, formal or informal meetings, dedicated websites, contractual agreements);
• how it identifies and removes potential barriers to the communication or dissemination of the policy commitments (e.g., by making them accessible and available in relevant languages).

This disclosure gives insight into how the organization embeds its policy commitments for responsible business conduct, including the commitment to respect human rights, throughout its activities and business relationships. This ensures that people at all levels act responsibly and with awareness of and respect for human rights.

Guidance to 2-24-a-i
Examples of different levels within an organization include the highest governance body, senior executives, and operational levels.

The organization can report:

• the most senior level with oversight of, or accountability for, the implementation of the policy commitments;
• the functions in the organization with day-to-day responsibility for implementing each of the policy commitments (e.g., human resources with the responsibility for implementing the commitment to respect the rights of workers), including:
  • their reporting lines to senior decision-making levels;
  • the reason for allocating the responsibility to them;
• whether responsible business conduct is formally discussed at meetings of the highest governance body or senior executives and, if so, which topics are discussed;
• whether there are other formal or systematic means for discussions about responsible business conduct between different levels or functions in the organization (e.g., a cross-functional working group).

Guidance to 2-24-a-ii
The organization can describe:

• how it aligns the policy commitments with its:
  • broader risk management systems and management policies;
  • economic, environmental, social, and human rights impact assessments, and other due diligence processes;
  • policies and procedures that set financial and other performance incentives for management or workers;
• how it applies the policy commitments when making decisions, such as about its sourcing and operating locations;
• the systems (e.g., internal audit) it uses to monitor compliance with the policy commitments throughout its activities (across functions and geographic locations) and throughout its business relationships.

Guidance to 2-24-a-iii
The organization can describe:

• its procurement or investment policies and practices, and its engagement with those with which it has business relationships, including:
  • whether and how it applies pre-qualification processes, bidding criteria, or screening criteria consistent with the expectations stipulated in the policy commitments for responsible business conduct;
  • whether and how it considers the policy commitments in contracting or investment agreements, or in specific policies or codes of conduct for suppliers;
• whether and how it considers the policy commitments in the process of determining whether to initiate, continue, or terminate a business relationship;
• processes through which it enables or supports business partners and other parties to implement the policy commitments (e.g., capacity building, peer sharing);
• incentives that it offers to business partners and other parties to implement the policy commitments (e.g., price premiums, increased orders, long-term contracts).

Guidance to 2-24-a-iv
The organization can report:

• the content of the training;
• to whom the training is provided, and whether it is mandatory;
• the form (e.g., in-person, online) and frequency of the training;
• examples of how the organization has determined that the training is effective.

The organization can report whether the training covers how to implement the policy commitments in general or in specific situations (e.g., ensuring the commitment to privacy when handling customers’ personal data, ensuring the policy commitments are considered in procurement practices).

The organization can specify if training is provided to those with day-to-day responsibility for and those with oversight of or accountability for implementing the policy commitments. The organization can also specify if training is provided to those with which it has business relationships (e.g., distributors, franchisees, joint ventures, suppliers). The organization can report the number or percentage of workers, business partners, and other parties that have been trained during the reporting period.

This disclosure covers grievance mechanisms that the organization has established or participates in. Grievance mechanisms enable stakeholders to raise concerns about, and seek remedy for, the organization’s potential and actual negative impacts on them. This includes impacts on their human rights. This disclosure also covers other processes by which the organization provides for or cooperates in the remediation of negative impacts that it identifies it has caused or contributed to.

The United Nations (UN) Guiding Principles on Business and Human Rights [14] and the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises [12] set out expectations for organizations to provide for or cooperate in the remediation, through legitimate processes, of negative impacts that they identify they have caused or contributed to. The organization is not responsible for the remediation of negative impacts directly linked to its operations, products, or services by its business relationships, where the organization has not contributed to the impacts. It can, however, play a role in the remediation. See Box 3 in GRI 3: Material Topics 2021 for more information on causing, contributing, or being directly linked to negative impacts.

These instruments also set out expectations for organizations to establish or participate in effective operational-level grievance mechanisms.

Grievance mechanisms are distinct from whistleblowing mechanisms. Whistleblowing mechanisms enable individuals to raise concerns about wrongdoing or breaches of the law in the organization’s operations or business relationships, regardless of whether the individuals themselves are harmed or not. Whistleblowing mechanisms are reported under Disclosure 2-26 in this Standard.

This disclosure covers the operation of grievance mechanisms and other remediation processes. The actions taken to provide for or cooperate in the remediation of actual negative impacts for material topics are reported under 3-3-d-ii in GRI 3.

The disclosure is only relevant to environmental remediation processes (e.g., processes to remove contaminants from soil) when these are connected to impacts on stakeholders or grievances raised by stakeholders. However, the remedy provided to stakeholders through the mechanisms and processes covered by this disclosure may involve environmental remediation. The use of environmental remediation processes can be reported under 3-3-d-ii in GRI 3.

Guidance to 2-25-b
Grievance mechanisms refer to any routinized, state-based or non-state-based, judicial or non-judicial processes through which stakeholders can raise grievances and seek remedy.

Examples of state-based judicial and non-judicial grievance mechanisms include courts (for both criminal and civil actions), labor tribunals, national human rights institutions, National Contact Points under the OECD Guidelines for Multinational Enterprises, ombudsperson offices, consumer protection agencies, regulatory oversight bodies, and government-run complaints offices.

Non-state-based grievance mechanisms include those administered by the organization, either alone or together with stakeholders, such as operational-level grievance mechanisms and collective bargaining, including the mechanisms established by collective bargaining. They also include mechanisms administered by industry associations, international organizations, civil society organizations, or multi-stakeholder groups.

Operational-level grievance mechanisms are administered by the organization either alone or in collaboration with other parties and are directly accessible by the organization’s stakeholders. They allow for grievances to be identified and addressed early and directly, thereby preventing both harm and grievances from escalating. They also provide important feedback on the effectiveness of the organization’s due diligence from those who are directly affected.

The organization can describe:

• the intended purpose and users of the mechanisms (i.e., whether they are intended for a particular stakeholder category, topic, or region) and whether they enable users to raise human rights-related concerns. For example, the organization can explain that it has established a mechanism for community members to raise complaints about resettlement, as well as a separate hotline for workers to raise concerns about issues affecting their rights, such as health and safety conditions;
• how the mechanisms operate and who administers them (the organization or another party);
• whether operational-level grievance mechanisms are administered at the organizational level or whether they are administered at a lower level (at the site or project level) and, in such a case, how information from these mechanisms is centralized;
• how the mechanisms have been designed and on which principles and guidelines they are based, including whether they are designed to meet the effectiveness criteria set out in UN Guiding Principle 31 [14];
• the process through which grievances are investigated;
• whether grievances are communicated to the highest governance body;
• whether grievances are treated confidentially;
• whether the mechanisms can be used by stakeholders anonymously through representation by a third party;
• whether the organization requires or provides incentives for the creation or improvement of operational-level grievance mechanisms in workplaces of suppliers;
• whether the organization provides a back-up process for workplaces of suppliers that do not have operational-level grievance mechanisms or where the existing grievance mechanisms in those workplaces result in unresolved issues.

Guidance to 2-25-c
Requirement 2-25-c covers remediation processes other than grievance mechanisms. Such processes lead to the remediation of an impact without mechanisms for filing a formal complaint.

Examples include instances where the organization takes action to remediate an actual impact evidenced in an impact assessment or a report published by a civil society organization.

Guidance to 2-25-d
The organization can describe, for example, how it engages with stakeholders who are the intended users of the grievance mechanisms, to understand how they want to access the mechanisms to raise concerns, and their expectations about how the mechanisms will operate.

Guidance to 2-25-e
According to UN Guiding Principle 31 [14], effective grievance mechanisms are legitimate, accessible, predictable, equitable, transparent, rights-compatible, and a source of continuous learning. In addition to these criteria, effective operational-level grievance mechanisms are also based on engagement and dialogue. It can be more difficult for the organization to assess the effectiveness of grievance mechanisms that it participates in compared to those it has established itself.

The organization can report:

• whether and how the intended users are informed about the grievance mechanisms and remediation processes;
• whether and how the intended users are trained to use the grievance mechanisms and remediation processes;
• the accessibility of the grievance mechanisms and remediation processes, such as the number of hours per day or days per week they are accessible, and their availability in different languages;
• how the organization seeks to ensure it respects users’ human rights and protects them against reprisals (i.e., non-retaliation for raising complaints or concerns);
• how satisfied users are with the grievance mechanisms and remediation processes, and with the resulting outcomes, as well as how the organization assesses user satisfaction;
• the number and types of grievances filed during the reporting period, and the percentage of grievances that were addressed and resolved, including the percentage that were resolved through remediation;
• the number of grievances filed during the reporting period that are repeated or recurring;
• changes made to the grievance mechanisms and remediation processes in response to lessons learned about their effectiveness.

Quantitative data, such as the number of grievances, is unlikely to be sufficient on its own. For example, a low number of grievances could indicate that few incidents have occurred, but it could also signal that their intended users do not trust the mechanisms. For this reason, contextual information should be provided to help information users interpret the data.

This disclosure covers the organization’s mechanisms for individuals to seek advice and raise concerns about responsible business conduct in the organization's operations and business relationships. Examples of these mechanisms include confidential interviews during site visits, escalation processes (to raise issues through management levels), hotlines, mechanisms to report non-compliance with laws and regulations, and whistleblowing mechanisms.

These mechanisms enable individuals to raise concerns about wrongdoing or breaches of the law in the organization’s operations or business relationships, regardless of whether the individuals themselves are harmed or not. They are distinct from grievance mechanisms, which enable stakeholders to raise concerns about, and seek remedy / remediation for, the organization’s potential and actual negative impacts on them. Grievance mechanisms are reported under Disclosure 2-25 in this Standard.

If the organization’s grievance mechanisms and its mechanisms for seeking advice and raising concerns about responsible business conduct operate in a similar way, the organization can provide a single description of how these mechanisms operate and explain which mechanisms the description covers.

The organization can report:

• who the intended users of the mechanisms are;
• how the mechanisms operate and which level or function in the organization is assigned responsibility for them;
• whether the mechanisms are operated independently of the organization (e.g., by a third party);
• the process through which concerns are investigated;
• whether requests for advice and concerns raised are treated confidentially;
• whether the mechanisms can be used anonymously.

Additionally, the organization can report information about the effectiveness of the mechanisms, including:

• whether and how the intended users are informed about the mechanisms and trained on how to use them;
• the accessibility of the mechanisms, such as the number of hours per day or days per week they are available, and their availability in different languages;
• how the organization seeks to ensure it respects users’ human rights and protects them against reprisals (i.e., non-retaliation for raising concerns);
• how satisfied users are with the mechanisms and with the resulting outcomes;
• the number and types of requests for advice received during the reporting period, and the percentage of requests that were answered;
• the number and types of concerns raised during the reporting period, and the percentage of concerns that were addressed and resolved or found to be unsubstantiated.

This disclosure addresses non-compliance, or failure to comply with, laws and regulations that apply to the organization.

Non-compliance with laws and regulations can give insight into the ability of management to ensure that the organization conforms to certain performance parameters.

Laws and regulations can be issued by various bodies, including local, regional, and national governments; regulatory authorities; and public agencies.

Laws and regulations include:

• international declarations, conventions, and treaties;
• national, subnational, regional, and local regulations;
• binding voluntary agreements made with regulatory authorities and developed as a substitute for implementing a new regulation;
• voluntary agreements (or covenants), if the organization directly joins the agreement, or if public agencies make the agreement applicable to organizations in their territory through legislation or regulation.

This disclosure includes significant instances of non-compliance that resulted in administrative or judicial sanctions and fines that are being appealed during the reporting period.

Non-monetary sanctions can include restrictions imposed by governments, regulatory authorities, or public agencies on the organization’s activities or operations, such as withdrawal of trading licenses or licenses to operate in highly regulated industries. They can also include directives to cease or remediate an unlawful activity.

The organization can use information about fines that have been reported in its audited consolidated financial statements or in the financial information filed on public record, including fines that are being appealed and which may appear as balance sheet reserves in the financial statements.

If there were no significant instances of non-compliance with laws and regulations or no fines were paid during the reporting period, a brief statement of this fact is sufficient to comply with the disclosure.

Guidance to 2-27-c
The description of significant instances of non-compliance can include the geographic location where the instance occurred, and the matter to which the instance relates, such as a tax fraud or a spill. The organization is required to report sufficient information for information users to understand the type and the context of significant instances of non-compliance.

The organization can also explain whether the significant instances are repeated or recurring.

Guidance to 2-27-d
When determining the significant instances of non-compliance, the organization can assess:

• the severity of the impact resulting from the instance;
• external benchmarks used in its sector to determine significant instances of non-compliance.

The organization may have a significant role in an association or advocacy organization when it holds a position in the governance body, participates in projects or committees, or provides substantive funding beyond routine membership dues. The role may also be significant when the organization views its membership as strategic to influencing the mission or objective of the association that is critical to the organization’s own activities.

Stakeholders are individuals or groups that have interests that are affected or could be affected by the organization’s activities [11]. For more information on stakeholders, see section 2.4 in GRI 1: Foundation 2021.

This disclosure covers stakeholder engagement undertaken by the organization as part of its ongoing activities, rather than specifically for the purpose of sustainability reporting.

Guidance to 2-29-a-i
Common categories of stakeholders for organizations are business partners, civil society organizations, consumers, customers, employees and other workers, governments, local communities, non-governmental organizations, shareholders and other investors, suppliers, trade unions, and vulnerable groups.

The organization can explain how it determines which categories of stakeholders to engage with and which categories not to engage with.

Guidance to 2-29-a-ii
The purpose of stakeholder engagement can be, for example, to identify actual and potential impacts or to determine prevention and mitigation responses to potential negative impacts. In some cases, stakeholder engagement is a right in and of itself, such as the right of workers to form or join trade unions or their right to bargain collectively.

The organization can also report:

• the type of stakeholder engagement (e.g., participation, consultation, information) and its frequency (e.g., ongoing, quarterly, annually);
• when it engages directly with stakeholders and when it engages with credible stakeholder representatives or proxy organizations, or other credible independent expert resources, and why;
• whether stakeholder engagement activities take place at the organizational level or at a lower level, such as at the site or project level, and in the latter case, how information from stakeholder engagement activities is centralized;
• the resources (e.g., financial or human resources) allocated to stakeholder engagement.

Further information on stakeholder engagement undertaken for specific activities is reported under other disclosures. For example, the organization must report on stakeholder engagement undertaken to determine and manage material topics under 3-1-b and 3-3-f in GRI 3: Material Topics 2021.

Guidance to 2-29-a-iii
Meaningful stakeholder engagement is characterized by two-way communication and depends on the good faith of participants on both sides. It is also responsive and ongoing and includes in many cases engaging with relevant stakeholders before decisions are made. [11]

The organization can report:

• how it takes into account potential barriers to stakeholder engagement (e.g., language and cultural differences, gender and power imbalances, divisions within a community or group);
• how it engages with at-risk or vulnerable groups (e.g., whether it takes specific approaches and gives special attention to potential barriers);
• how it provides stakeholders with information that is understandable and accessible through appropriate communication channels;
• how stakeholder feedback is recorded and integrated into decision-making, and how stakeholders are informed about the way in which their feedback has influenced decisions;
• how it seeks to respect the human rights of all stakeholders engaged, for example, their rights to privacy, freedom of expression, and peaceful assembly and protest;
• how it works with business partners to engage with stakeholders in a meaningful way, including the expectations it places on business partners to respect the human rights of stakeholders during engagement.

This disclosure provides insights into how the organization engages in collective bargaining with its employees. Collective bargaining is a fundamental right at work covered in the International Labour Organization (ILO) Right to Organise and Collective Bargaining Convention [8].

Collective bargaining refers to negotiations that take place between one or more employers or employers' organizations and one or more workers' organizations (e.g., trade unions). The objective of these negotiations is to reach a collective agreement on working conditions and terms of employment (e.g., wages, working time) and to regulate relations between employers and workers. [3] These negotiations are an important means through which employers’ organizations and workers’ organizations can improve working conditions and labor relations.

Collective agreements can be made at the level of the organization, at the level of a particular site, at the industry level, and at the national level in countries where this is the practice. Collective agreements can cover specific groups of workers, for example, those performing a specific activity or working at a specific location.

If the organization has a statement or policy commitment on freedom of association and collective bargaining, this is reported under 2-23-b-i in this Standard or 3-3-c in GRI 3: Material Topics 2021.

See references [2], [3], [4], [5], [6], [8], [10], [21], [25], and [26] in the Bibliography.

Guidance to 2-30-a
The organization is required to report the percentage of its employees whose working conditions and terms of employment are regulated by one or more collective bargaining agreements.

The percentage of employees covered by collective bargaining agreements is calculated using the following formula:

The employees covered by collective bargaining agreements are those employees to whom the organization is obligated to apply the agreement. This means that if none of the employees are covered by a collective bargaining agreement, the percentage reported is zero. An employee covered by more than one collective bargaining agreement only needs to be counted once.

This requirement does not ask for the percentage of employees represented by a works council or belonging to trade unions, which can be different. The percentage of employees covered by collective bargaining agreements can be higher than the percentage of unionized employees when the collective bargaining agreements apply to both union and non-union members. Alternatively, the percentage of employees covered by collective bargaining agreements can be lower than the percentage of unionized employees. This may be the case when there are no collective bargaining agreements available or when the collective bargaining agreements do not cover all unionized employees.

The organization can also provide a breakdown of the percentage of employees covered by collective bargaining agreements by region, or provide comparisons with industry benchmarks.

Guidance to 2-30-b
There may be instances where collective bargaining agreements cover some or none of the organization’s employees. However, the working conditions and terms of employment of these employees may be influenced or determined by the organization based on other collective bargaining agreements, such as agreements that cover other employees or agreements from other organizations. If this is the case, the organization is required to report it under 2-30-b. If this is not the case, and the working conditions and terms of employment of these employees are not influenced or determined based on other collective bargaining agreements, a brief statement of this fact is sufficient to comply with this requirement.