GRI 203: Indirect Economic Impacts 2016 contains disclosures for organizations to report information about their indirect economic impacts, and how they manage these impacts.
The Standard is structured as follows:
The rest of the Introduction section provides a background on the topic, an overview of the system of GRI Standards and further information on using this Standard.
Background on the topic
This Standard addresses an organization’s indirect economic impacts, including impacts of an organization’s infrastructure investments and services supported.
An economic impact can be defined as a change in the productive potential of the economy that has an influence on a community’s or stakeholder’s well-being and longer-term prospects for development. Indirect economic impacts are the additional consequences of the direct impact of financial transactions and the flow of money between an organization and its stakeholders.
Indirect economic impacts can be monetary or non-monetary, and are particularly important to assess in relation to local communities and regional economies.
System of GRI Standards
This Standard is part of the GRI Sustainability Reporting Standards (GRI Standards). The GRI Standards enable an organization to report information about its most significant impacts on the economy, environment, and people, including impacts on their human rights, and how it manages these impacts.
The GRI Standards are structured as a system of interrelated standards that are organized into three series: GRI Universal Standards, GRI Sector Standards, and GRI Topic Standards (see Figure 1 in this Standard).
Universal Standards: GRI 1, GRI 2 and GRI 3
GRI 1: Foundation 2021 specifies the requirements that the organization must comply with to report in accordance with the GRI Standards. The organization begins using the GRI Standards by consulting GRI 1.
GRI 2: General Disclosures 2021 contains disclosures that the organization uses to provide information about its reporting practices and other organizational details, such as its activities, governance, and policies.
GRI 3: Material Topics 2021 provides guidance on how to determine material topics. It also contains disclosures that the organization uses to report information about its process of determining material topics, its list of material topics, and how it manages each topic.
Sector Standards
The Sector Standards provide information for organizations about their likely material topics. The organization uses the Sector Standards that apply to its sectors when determining its material topics and when determining what to report for each material topic.
Topic Standards
The Topic Standards contain disclosures that the organization uses to report information about its impacts in relation to particular topics. The organization uses the Topic Standards according to the list of material topics it has determined using GRI 3.
Using this Standard
This Standard can be used by any organization – regardless of size, type, sector, geographic location, or reporting experience – to report information about its indirect economic impacts.
An organization reporting in accordance with the GRI Standards is required to report the following disclosures if it has determined indirect economic impacts to be a material topic:
See Requirements 4 and 5 in GRI 1: Foundation 2021.
Reasons for omission are permitted for these disclosures.
If the organization cannot comply with a disclosure or with a requirement in a disclosure (e.g., because the required information is confidential or subject to legal prohibitions), the organization is required to specify the disclosure or the requirement it cannot comply with, and provide a reason for omission together with an explanation in the GRI content index. See Requirement 6 in GRI 1: Foundation 2021 for more information on reasons for omission.
If the organization cannot report the required information about an item specified in a disclosure because the item (e.g., committee, policy, practice, process) does not exist, it can comply with the requirement by reporting this to be the case. The organization can explain the reasons for not having this item, or describe any plans to develop it. The disclosure does not require the organization to implement the item (e.g., developing a policy), but to report that the item does not exist.
If the organization intends to publish a standalone sustainability report, it does not need to repeat information that it has already reported publicly elsewhere, such as on web pages or in its annual report. In such a case, the organization can report a required disclosure by providing a reference in the GRI content index as to where this information can be found (e.g., by providing a link to the web page or citing the page in the annual report where the information has been published).
Requirements, guidance and defined terms
The following apply throughout this Standard:
Requirements are presented in bold font and indicated by the word 'shall'. An organization must comply with requirements to report in accordance with the GRI Standards.
Requirements may be accompanied by guidance.
Guidance includes background information, explanations, and examples to help the organization better understand the requirements. The organization is not required to comply with guidance.
The Standards may also include recommendations. These are cases where a particular course of action is encouraged but not required.
The word ‘should’ indicates a recommendation, and the word ‘can’ indicates a possibility or option.
Defined terms are underlined in the text of the GRI Standards and linked to their definitions in the Glossary. The organization is required to apply the definitions in the Glossary.
An organization reporting in accordance with the GRI Standards is required to report how it manages each of its material topics.
An organization that has determined indirect economic impacts to be a material topic is required to report how it manages the topic using Disclosure 3-3 in GRI 3: Material Topics 2021 (see clause 1.1 in this section).
This section is therefore designed to supplement – and not replace – Disclosure 3-3 in GRI 3.
1.1 The reporting organization shall report how it manages indirect economic impacts using Disclosure 3-3 in GRI 3: Material Topics 2021.
1.2 The reporting organization should:
1.2.1 describe work undertaken to understand indirect economic impacts at the national, regional, or local level;
1.2.2 explain whether it conducted a community needs assessment to determine the need for infrastructure and other services, and describe the results of the assessment.
An organization is expected to compile information for economic disclosures using figures from its audited financial statements or from its internally-audited management accounts, whenever possible. Data can be compiled using, for example:
The reporting organization shall report the following information:
2.1 When compiling the information specified in Disclosure 203-1, the reporting organization should disclose:
2.1.1 the size, cost and duration of each significant infrastructure investment or service supported;
2.1.2 the extent to which different communities or local economies are impacted by the organization’s infrastructure investments and services supported.
Background
This disclosure concerns the impact that an organization’s infrastructure investments and services supported have on its stakeholders and the economy.
The impacts of infrastructure investment can extend beyond the scope of an organization’s own operations and over a longer timescale. Such investments can include transport links, utilities, community social facilities, health and welfare centers, and sports centers. Along with investment in its own operations, this is one measure of the organization’s capital contribution to the economy.
The reporting organization shall report the following information:
Guidance for Disclosure 203-2
This disclosure concerns the spectrum of indirect economic impacts that an organization can have on its stakeholders and the economy.
Examples of significant indirect economic impacts, both positive and negative, can include:
para
This glossary provides definitions for terms used in this Standard. The organization is required to apply these definitions when using the GRI Standards.
The definitions included in this glossary may contain terms that are further defined in the complete GRI Standards Glossary. All defined terms are underlined. If a term is not defined in this glossary or in the complete GRI Standards Glossary, definitions that are commonly used and understood apply.
individual who is in an employment relationship with the organization according to national law or practice
rights inherent to all human beings, which include, at a minimum, the rights set out in the United Nations (UN) International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work