GRI 3 Material Topics

The three GRI 3 disclosures

3-1 Process to determine material topics: A description of the process the organisation used to determine its material topics — how it identified relevant topics, how it assessed significance of impacts, how stakeholders were engaged, and how the material topics were prioritised and confirmed by senior decision-makers.

The process must be documented and genuine — not a retroactive rationalisation of topics the organisation had already decided to report. Assurers, investors, and civil society organisations assess whether the disclosed process would credibly produce the material topic list — if the topics seem pre-determined rather than process-derived, the disclosure lacks credibility.

3-2 List of material topics: The complete list of topics determined to be material through the 3-1 process. For each material topic, the report must reference the GRI Topic Standard(s) used to report on that topic — or explain why no existing GRI Topic Standard covers it.

3-3 Management of material topics: For each material topic, a description of: the actual and potential positive and negative impacts related to the topic; the policies in place to manage the topic; the actions taken; goals and targets; and how the effectiveness of actions is assessed. This is the 'management approach' disclosure — previously called DMA (Disclosure on Management Approach) in earlier GRI versions.

The four steps of GRI 3-1

Step 1 — Understand the organisation's context: Map your activities, business relationships, and the sustainability context — sectors, geographies, value chain structure, and stakeholder categories. This contextual mapping identifies which sustainability topics are potentially relevant for impact assessment.

Step 2 — Identify actual and potential impacts: For each relevant topic, identify the actual and potential positive and negative impacts your organisation has on the economy, environment, and people — across your own operations, your supply chain, and downstream value chain. This is the impact identification step.

Step 3 — Assess the significance of impacts: Evaluate each identified impact based on its significance — severity (scale, scope, irremediability for negative impacts; scale and scope for positive impacts). Stakeholder input is a required component of this step — the views of affected stakeholders inform the significance assessment.

Step 4 — Prioritise the most significant impacts for reporting: Apply a threshold — determining which impacts are sufficiently significant to warrant full Topic Standard disclosure. Topics below the threshold can be excluded with a brief explanation. Confirm material topics with senior decision-makers — boards or equivalent governance bodies.

Critical distinction from CSRD: GRI 3 covers only impact materiality. CSRD double materiality additionally requires financial materiality — how sustainability topics affect the company financially. If you are using GRI to prepare for CSRD, you must add the financial materiality dimension separately.

Stakeholder engagement in GRI 3

GRI 3 explicitly requires stakeholder engagement in the materiality process — this is not optional, and 'box-ticking' engagement does not satisfy the requirement.

Who to engage: GRI 3 requires engagement with affected stakeholders — people whose interests are affected by the organisation's activities. This includes: workers and worker representatives; supply chain workers; local communities; consumers; civil society organisations. Capital providers (investors) are also relevant but primarily for financial materiality — which GRI 3 does not cover.

How to engage: The engagement must be designed to identify impacts the organisation may not have considered and to assess the significance of impacts from the affected stakeholder perspective. Survey-only approaches that simply ask stakeholders to rate pre-determined topics are insufficient — stakeholders must have the opportunity to raise topics not on the list.

Documenting engagement: For assurance purposes, maintain records of: who was engaged (categories of stakeholders); how they were engaged (method, date, format); what they said (summary of inputs); and how their input influenced the materiality determination. This evidence trail is what distinguishes genuine engagement from box-ticking.

For CSRD companies using GRI: your ESRS 2 SBM-2 stakeholder engagement disclosure describes the same process as GRI 3-1. Design one stakeholder engagement programme that satisfies both requirements — document it fully for ESRS assurance purposes, then extract the GRI 3-1 narrative from the same documentation.

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