The Global Uptake of ESG Standards Under GRI Guidelines: A Tale of Diverse Progress

by Samantha Jewel and Ryan Babbage

The adoption of Environmental, Social, and Governance (ESG) standards has gained tremendous momentum globally over the last decade, driven by growing societal and investor demand for corporate accountability. At the heart of this movement lies the Global Reporting Initiative (GRI)—a comprehensive and widely accepted framework that helps organisations measure, disclose, and manage their sustainability impacts.

While the GRI guidelines are internationally recognised, their implementation and effectiveness vary significantly across countries and regions. This article examines how Sri Lanka, Chile, and South Africa are incorporating GRI standards into their regulatory frameworks and contrasts their progress with the evolving ESG landscape in Dubai and Abu Dhabi. Each region presents unique challenges and opportunities, offering valuable lessons for achieving meaningful global sustainability.

Sri Lanka: Foundations for ESG Integration

Sri Lanka has taken proactive steps to integrate ESG reporting within its corporate ecosystem. The Colombo Stock Exchange (CSE) introduced its ESG Guidance Document in 2021, aligning with GRI principles to encourage listed companies to adopt global best practices in sustainability reporting (CSE, 2021).

Large corporations, such as John Keells Holdings and Commercial Bank of Ceylon, have begun aligning their sustainability disclosures with GRI standards, showcasing transparency in their environmental and social impacts. However, significant challenges persist for smaller and mid-sized businesses due to resource and capacity limitations. Many lack the expertise or financial means to implement GRI-aligned reporting effectively.

Key Challenges:

• Limited financial resources and expertise among small enterprises are key limiting factors.
• There is a need for capacity-building programs to foster widespread ESG adoption.

Progressive Steps Forward:

Government and industry stakeholders must invest in training and infrastructure to help SMEs comply with GRI guidelines. Partnerships with international organisations, such as the UNDP and IFC, could help bridge the knowledge and resource gaps, ensuring no company is left behind.

Chile: A Regional Leader in Latin America

Chile has emerged as a leader in ESG adoption in Latin America, primarily driven by the proactive stance of the Santiago Stock Exchange (SSE). The SSE integrates GRI standards into its Corporate Sustainability Reporting Guidelines, encouraging companies to disclose their environmental and social impacts in alignment with global frameworks.

One notable area of Chile's progress is its renewable energy sector, which accounts for over 25% of its energy mix as of 2022 (IEA, 2022). Major corporations, such as AES Andes and Colbún, have leveraged GRI indicators to demonstrate their sustainability commitments, particularly in climate-related disclosures and human rights.

However, Chile's reliance on voluntary reporting raises questions about consistency and accountability. Selective disclosures, often seen in regions with weak regulatory enforcement, can limit the impact of ESG initiatives.

Lessons from Chile:

1. Government Enforcement: Robust regulations ensure that companies move beyond superficial reporting.
2. Corporate Responsibility: Businesses that embed ESG into their operations—rather than treat it as a compliance exercise—create long-term value for stakeholders.

Chile's approach underscores the importance of combining voluntary adoption with regulatory enforcement to drive meaningful sustainability outcomes.

South Africa: A Global ESG Pioneer

South Africa is widely recognised as a trailblazer in ESG reporting, thanks to its Johannesburg Stock Exchange (JSE)requirements and its adoption of the King IV Report on Corporate Governance. The JSE mandates listed companies to produce integrated reports, combining financial and non-financial information, with GRI guidelines serving as a benchmark for sustainability reporting.

A Holistic Focus on Social Equity:

South Africa's historical legacy of socio-economic inequality has driven an emphasis on the "S" in ESG. Companies are expected to address critical social issues such as employment equity, skills development, and community upliftment. For example:

• Anglo-American reports extensively on local community development projects aligned with GRI standards.
• Nedbank highlights its contributions to financial inclusion and environmental sustainability.

Despite its progress, challenges regarding the authenticity of environmental audits still need to be addressed, particularly for projects involving carbon credits and biodiversity initiatives. Independent verification processes often lack the rigour required to gain trust from international investors.

Strengths of South Africa's Approach:

• Mandatory integrated reporting ensures consistency and accountability.
• A holistic ESG focus addresses both social and environmental issues.

Challenges:

Improved mechanisms for third-party verification of environmental audits are essential to strengthen global confidence in South Africa's ESG reporting.

Dubai: Balancing Potential with Reality

Dubai presents a paradox in its ESG journey. Over the past five years, the city has witnessed a rapid increase in ESG adoption among its leading corporations. High-profile companies such as Emaar Properties and DP World produce well-polished sustainability reports, demonstrating their alignment with global frameworks, including GRI and SASB.

However, the tangible impacts of these initiatives still need to be consistent. Critics argue that Dubai's competitive business environment often prioritises Return on Investment (ROI) over genuine sustainability. In many cases, ESG efforts focus on optics rather than substantial, systemic change—a phenomenon widely referred to as "greenwashing" (Gordon, 2023).

Key Challenges:

1. Superficial Implementation: ESG strategies are often treated as a marketing tool rather than a core operational principle.
2. Over-Reliance on Consultants: ESG reporting is frequently outsourced, leading to a need for more organisational ownership and cultural integration.

Moving Forward:

Dubai has the financial and infrastructural capacity to become a global leader in ESG reporting. A cultural shift toward long-term thinking, accountability, and collaboration will be critical. Establishing independent audit frameworks and transparent tracking mechanisms can enhance credibility.

Abu Dhabi: A Pragmatic Approach to ESG

Unlike Dubai, Abu Dhabi has adopted a more pragmatic and results-driven approach to ESG implementation. Initiatives such as Masdar City, a leading sustainable urban development, reflect Abu Dhabi's commitment to actionable progress before publicising achievements. The emirate has also introduced stringent governance standards to ensure measurable outcomes.

Key programs include:

• ADNOC's Net-Zero Strategy: The oil giant's ambitious plans to achieve net-zero emissions by 2045 showcase a balanced approach to sustainability within a traditionally carbon-intensive sector (ADNOC, 2022).
• Abu Dhabi Global Market (ADGM): ADGM's ESG framework mandates transparent reporting and accountability for companies in its jurisdiction.

Abu Dhabi's example highlights that ESG success requires more than reporting—it demands leadership, governance, and a commitment to genuine change.

Driving Change: Lessons from Diverse Approaches

The global uptake of GRI-based ESG standards reveals a few critical lessons:

1. Enforcement Matters: South Africa's JSE shows the importance of mandatory reporting in ensuring consistency and accountability.
2. Cultural Shifts Drive Progress: Dubai's struggles underscore the need for a cultural shift toward sustainability as a core principle, not just a compliance requirement.
3. Capacity Building is Essential: Sri Lanka and Chile demonstrate the importance of equipping SMEs with the resources and knowledge to adopt ESG reporting.
4. Substance over Optics: Transparency and accountability—evident in Abu Dhabi's measured approach—are the cornerstones of credible ESG action.

The Road Ahead: From Rhetoric to Results

As ESG standards continue to evolve, the GRI framework remains a critical tool for driving transparency and accountability worldwide. However, the true impact of ESG reporting lies in its ability to create meaningful, measurable change. Companies and governments must move beyond box-ticking exercises and invest in:

• Independent Verification: Strengthening third-party audit mechanisms to ensure credibility.
• Capacity Building: Supporting SMEs and emerging economies in their ESG journeys.
• Collaboration: Encouraging partnerships between governments, corporations, and civil society to address systemic sustainability challenges.

For regions like Dubai, embracing Abu Dhabi's pragmatic approach—and the leadership shown by South Africa and Chile—offers a roadmap for success. By fostering genuine commitment and governance, the ESG movement can deliver transformative outcomes for businesses, societies, and the planet.

References

1. Colombo Stock Exchange (2021). ESG Guidance Document. Retrieved from [CSE Official Website].
2. IEA (2022). Chile's Renewable Energy Transition. Retrieved from [IEA Reports].
3. ADNOC (2022). Net-Zero Strategy. Retrieved from [ADNOC Sustainability Reports].
4. Gordon, R. (2023). Greenwashing and ESG in Emerging Markets. Financial Times.