Few questions generate more debate in sustainability teams than which reporting framework to use. The honest answer is that the GRI Standards and the IFRS Sustainability Disclosure Standards are not rivals. They answer different questions for different audiences, and many organisations will end up using both. The real task is to be clear about who you are reporting to and why.
This article sets out the difference in plain terms, explains what is happening in Kenya and offers a simple way to decide where to start.
Two frameworks, two questions
The GRI Standards, issued by the Global Reporting Initiative, help an organisation report on its impacts on the economy, the environment and people, including human rights. The audience is broad: communities, employees, civil society, regulators, funders and investors. This is often described as an impact lens.
IFRS S1 and IFRS S2, issued by the International Sustainability Standards Board, focus on the sustainability-related risks and opportunities that could reasonably be expected to affect an entity’s cash flows, access to finance or cost of capital over the short, medium and long term. The primary audience is investors and lenders. IFRS S1 sets the general requirements for sustainability-related financial disclosures, and IFRS S2 deals specifically with climate-related disclosures. Both are organised around four pillars: governance, strategy, risk management, and metrics and targets.
Put simply, GRI asks “what difference do we make to the world?” and IFRS S1 and S2 ask “what could the world’s sustainability challenges do to our finances?”
What is happening in Kenya
In Kenya, the Institute of Certified Public Accountants of Kenya (ICPAK) has adopted IFRS S1 and S2 and published a national roadmap, launched in late 2024, to phase in reporting. Under the roadmap, public interest entities are expected to publish sustainability disclosures aligned with the two standards for accounting periods beginning on or after 1 January 2027, with later phases for other entities and a phased approach to independent assurance. Voluntary early adoption is encouraged.
Timelines and scope can be refined by ICPAK and by sector regulators such as the Capital Markets Authority and the Central Bank of Kenya, so always check the latest guidance for your category of entity. Organisations that are not public interest entities, including most NGOs, are generally outside the first mandatory phase. Even so, their lenders, donors or parent companies may still ask for aligned information.
A simple way to decide
Start with your audience, not with the framework. The table below is a rule of thumb, not a rule.
|
If your main audience is… |
Lead with |
Why |
|
Regulators, listed-company investors, banks and lenders |
IFRS S1 and S2 |
They need decision-useful information on risks and opportunities that affect financial performance. |
|
Donors, communities, civil society and government partners |
GRI Standards |
They care about real-world impacts and want stakeholder-inclusive reporting. |
|
Development finance institutions, multinationals and groups with mixed audiences |
Both, from one data system |
Different stakeholders need different lenses on the same underlying facts. |
|
Early-stage organisations with limited capacity |
Materiality and core metrics first |
A solid foundation serves whichever framework you adopt later. |
Using both without doubling the work
Organisations that report under both frameworks avoid duplicated effort by following one principle: collect once, report many times. Build a single set of indicators and a single data process, then map each indicator to the disclosure requirements it satisfies in each framework. Reporting then becomes a matter of selecting and presenting, not collecting again.
In practice this means keeping an indicator register. For each metric it records the definition, unit, data owner, source system, reporting frequency and the framework requirements the metric supports. The register becomes the backbone of your reporting process and, later, of any independent assurance work.
Five steps to get started
- Identify your audiences. List who needs information from you and what each of them requires, in writing wherever possible.
- Run a materiality assessment. Identify the issues that matter, both in terms of your impact on people and the environment and in terms of financial risk to you.
- Take stock of your data. Find out what you already collect, where it sits and who owns it.
- Map to the frameworks. Compare your data with the requirements that apply to you and note the gaps.
- Assign governance. Decide who prepares, who reviews, who signs off and how the board is informed.
Pitfalls to avoid
- Choosing a framework because competitors use it, rather than because your stakeholders need it.
- Treating reporting as a design project for the annual report when the real work lies in the data.
- Leaving climate-related data, such as greenhouse gas emissions, until the last quarter before publication.
- Borrowing framework language without the evidence to back it up, which creates risk at assurance stage.
How Melanel can help
Melanel supports for-profit and not-for-profit organisations to build sustainability reporting frameworks, report using GRI standards, prepare for IFRS S1 and S2 and set up the data collection systems and dashboards behind both. If you are deciding which route to take, we can run a short framework-selection review that maps your stakeholders, your obligations and your current data, and gives you a recommended path with a realistic timeline.
