Future Trends in Sustainability Reporting: From TCFD and GRI Foundations to Next Generation Disclosure

Over the past decade, sustainability reporting has evolved from a niche practice into a corporate imperative. At the heart of this evolution stood two foundational frameworks: the Task Force on Climate-related Financial Disclosures (TCFD), which made climate risks a boardroom priority, and the Global Reporting Initiative (GRI), which established a common language for organizations to report their broader environmental and social impacts.

Today, the world is moving beyond climate alone to embrace nature, biodiversity, social impact, and value chain resilience. As emerging standards build on the legacy of TCFD and GRI, this article explores the future trends shaping sustainability reporting, and how organizations can lead in this dynamic landscape.

1. From Voluntary to Mandatory Reporting

The TCFD, launched in 2017, was a watershed moment, pioneering voluntary, investor-focused disclosure of climate-related risks and opportunities. Its influence quickly spread:

• The UK mandated TCFD aligned reporting for large companies.

• The EU’s Corporate Sustainability Reporting Directive (CSRD) integrates TCFD principles in its climate sections.

• The ISSB’s IFRS S2 standard is explicitly based on TCFD recommendations.

Similarly, GRI’s longstanding voluntary standards are now being codified in regulations, particularly in the CSRD’s ESRS, which build on GRI’s impact-driven disclosures.

What it means: Companies accustomed to TCFD or GRI reporting must now prepare for mandatory, multi-dimensional sustainability disclosures, covering both financial and societal impacts.

2. GRI: The Foundation of Impact Reporting

For over 25 years, the Global Reporting Initiative (GRI) has set the benchmark for impact materiality helping companies understand and disclose their most significant effects on the economy, environment, and people.

The GRI Standards remain the most widely used framework worldwide, trusted by thousands of companies and aligned with the UN Sustainable Development Goals (SDGs).

• GRI focuses on impacts, including biodiversity, water, human rights, and social equity beyond just financial risks.

• The updated GRI 101: Biodiversity 2024 aligns with TNFD, reflecting growing awareness of ecosystem dependencies.

• GRI’s approach complements financial-materiality frameworks like TCFD and ISSB, enabling a holistic view of sustainability performance.

What it means: GRI continues to provide the foundation on which companies can build broader risk based (TCFD/TNFD) and regulatory-aligned disclosures.

3. Broadening Beyond Climate: Nature and Biodiversity

While TCFD focused on climate, its sister framework, the Taskforce on Nature-related Financial Disclosures (TNFD), launched in 2023, extends the same risk based logic to ecosystems, biodiversity, and natural capital.

What it means: Organizations should view TNFD as a natural extension of TCFD building on established governance, strategy, risk, and metrics processes to include nature-related dependencies and impacts.

4. Double and Dynamic Materiality

TCFD pioneered financial materiality, while GRI championed impact materiality. Today, these perspectives are converging into the concept of double materiality, now embedded in ESRS, which combines the company’s risks and opportunities with its societal and environmental impacts. Additionally, dynamic materiality reflects the reality that material topics can evolve rapidly under changing conditions.

What it means: Companies must continuously reassess materiality across both dimensions to stay relevant and compliant.

5. Supply Chain Transparency

One of the insights from TCFD was that climate risks often manifest upstream or downstream in the value chain. This lesson is being expanded to encompass biodiversity, human rights, and Scope 3 emissions. GRI, with its deep value chain focus, provides guidance on full chain impact disclosures, now expected by stakeholders and regulators alike.

What it means: Businesses must strengthen supplier engagement and invest in traceability to meet rising transparency demands.

6. Standardization and Interoperability

The TCFD laid the foundation for comparable climate disclosures, now enshrined in ISSB’s IFRS S2. GRI’s impact-oriented standards, meanwhile, are the backbone of ESRS, and TNFD/GRI interoperability mapping shows growing harmonization.

What it means: Companies can streamline reporting processes by leveraging these aligned frameworks, reducing duplication and enhancing decision-usefulness.

7. Stakeholder-Centric and Impact-Oriented Reporting

TCFD sharpened focus on investor needs, but future reporting increasingly addresses all stakeholders employees, customers, regulators, and communities. GRI already mandates such multi stakeholder engagement, and the trend is toward disclosing measurable outcomes, aligned with global goals such as the SDGs.

What it means: Reporting must evolve beyond policies and commitments to concrete, demonstrated impacts.

8. Technology-Enabled Reporting

Data gaps and delays — long-standing challenges in both TCFD and GRI reporting are being addressed through digital innovations: AI, satellite monitoring, blockchain, and real-time analytics.

What it means: Companies that invested in technology for TCFD compliance can now scale these systems to cover broader sustainability metrics.

Building on TCFD and GRI: Actionable Steps

For organizations looking to lead:

Revisit TCFD and GRI Foundations: Ensure governance, strategy, risk, and impact processes are robust and extendable.

Expand Scope: Incorporate TNFD and ESRS aligned biodiversity, human rights, and value chain disclosures.

Adopt Double Materiality: Assess financial risks and broader societal impacts together.

Digitize and Automate: Deploy technology for more accurate, efficient reporting.

Looking Ahead: Climate and Beyond

The TCFD made climate related risks a mainstream concern, and GRI established the global language for impact reporting. Both remain indispensable pillars of sustainability disclosure.

But the future is bigger: climate, nature, people, and governance through the lenses of both risk and impact. Organizations that build on the foundations of TCFD and GRI to embrace holistic, multi dimensional reporting will lead the transition to a resilient, equitable, and sustainable economy.