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GRI 203: Indirect Economic Impacts 2016

EFFECTIVE DATE: 1 JULY 2018

Introduction​

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:

  • Section 1 contains a requirement, which provides information about how the organization manages its indirect economic impacts.
  • Section 2 contains two disclosures, which provide information about the organization’s indirect economic impacts.
  • The Glossary contains defined terms with a specific meaning when used in the GRI Standards. The terms are underlined in the text of the GRI Standards and linked to the definitions.

The rest of the Introduction section provides a background on the topic 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.

1. Topic management disclosures​

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.

REQUIREMENTS​

  • 1.1 The reporting organization shall report how it manages indirect economic impacts using Disclosure 3-3 in GRI 3: Material Topics 2021.

RECOMMENDATIONS​

  • 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.

2. Topic disclosures​

Disclosure 203-1 Infrastructure investments and services supported​

REQUIREMENTS​

The reporting organization shall report the following information:

  • a. Extent of development of significant infrastructure investments and services supported.
  • b. Current or expected impacts on communities and local economies, including positive and negative impacts where relevant.
  • c. Whether these investments and services are commercial, in-kind, or pro bono engagements.

RECOMMENDATIONS​

  • 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.

GUIDANCE​

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.

Disclosure 203-2 Significant indirect economic impacts​

REQUIREMENTS​

The reporting organization shall report the following information:

  • a. Examples of significant identified indirect economic impacts of the organization, including positive and negative impacts.
  • b. Significance of the indirect economic impacts in the context of external benchmarks and stakeholder priorities, such as national and international standards, protocols, and policy agendas.

GUIDANCE​

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:

  • Changes in the productivity of organizations, sectors, or the whole economy (such as through greater adoption of information technology).
  • Economic development in areas of high poverty (such as changes in the total number of dependents supported through the income of a single job).
  • Economic impacts of improving or deteriorating social or environmental conditions (such as a changing job market in an area converted from small farms to large plantations, or the economic impacts of pollution).
  • Availability of products and services for those on low incomes (such as preferential pricing of pharmaceuticals, which contributes to a healthier population that can participate more fully in the economy; or pricing structures that exceed the economic capacity of those on low incomes).
  • Enhanced skills and knowledge in a professional community or in a geographic location (such as when shifts in an organization’s needs attract additional skilled workers to an area, who, in turn, drive a local need for new learning institutions).
  • Number of jobs supported in the supply or distribution chain (such as the employment impacts on suppliers as a result of an organization’s growth or contraction).
  • Stimulating, enabling, or limiting foreign direct investment (such as when an organization changes the infrastructure or services it provides in a developing country, which then leads to changes in foreign direct investment in the region).
  • Economic impacts from a change in operation or activity location (such as the impact of outsourcing jobs to an overseas location).
  • Economic impacts from the use of products and services (such as economic growth resulting from the use of a particular product or service).