GRI 2021 Update: Materiality Assessment Explained with ESG Report Examples from 6 Companies
GRI released its Universal Standards 2021 on 5 October 2021, effective from 1 January 2023. The update replaces GRI 103: Management Approach with GRI 3: Material Topics 2021. GRI will also progressively publish 40 Sector Standards to guide companies on sustainability disclosures. This article explains the updated material topic assessment process step by step and presents examples from 6 leading companies to help you understand the latest materiality approach.
What to decide after reading If you came for IFRS, SASB, TCFD, GRI, or ESG reporting requirements, the next step is to turn disclosure items into data collection, section assignments, and review workflows.
Table of Contents
- What Has Changed? An Impact-Based Approach to Materiality Assessment
- 1. Understand the Organisation's Context: Identify Relevant Sustainability Issues
- 2. Identify Actual and Potential Impacts: Positive and Negative Effects Across Three Areas
- 3. Assess Impact Significance: Severity and Likelihood
- 4. Prioritise Impacts for Reporting: Determine Material Topics
- Materiality Assessment Examples from Six Corporate ESG Reports
- E.SUN Financial Holding: Screen Medium- and High-Priority Topics, Then Assess Significant Impacts
- Asia Cement: Work with External Experts to Assess Positive and Negative Impact Significance
- Sinyi Realty: Include SASB Topics in Double Materiality Assessment and Select Core SDGs
- ASUS: Use In-Depth Stakeholder Interviews and Double Materiality to Select Topics
- Formosa Petrochemical: Assess Significance and Likelihood Through Double Materiality and Adopt Sector Standards
- Philip Morris International: Conduct Double Materiality Analysis with a Third Party and Emphasise Stakeholder Input
- Climate and Energy Topic Standards: GRI 102 / 103
Updated 6 October 2026. Updated the effective status of GRI Standards, the list of Sector Standards, and the transition to the climate and energy standards.
GRI 2021 Update
What Has Changed? An Impact-Based Approach to Materiality Assessment
Whereas GRI 2016 identified material reporting topics through stakeholder concern and the significance of impacts on the environment, economy and society, GRI 2021 places greater emphasis on companies and stakeholders assessing “the significance of actual and potential impacts on the environment, economy and people, including human rights”.
The process comprises four steps: understanding the organisation's context, identifying actual and potential impacts, assessing their significance, and prioritising impacts for reporting. The first three form part of the organisation's ongoing identification of sustainability impacts; the fourth prioritises material topics when preparing a report. Companies should follow these four steps to regularly assess and manage operational impacts and disclose their management approaches in sustainability reports.
Drawing on international instruments and GRI Sector Standards, engage stakeholders and experts to routinely identify and assess actual and potential impacts across operations and the value chain. When preparing the sustainability report, prioritise impacts to determine material reporting topics.
1. Understand the Organisation's Context: Identify Relevant Sustainability Issues
Companies can review their activities, business relationships, sustainability context and stakeholders to identify sustainability issues connected to their operations.
GRI 11: Oil and Gas Sector 2021
Common oil and gas activities include extraction and production, refining, product storage and transport, and sales and marketing. Companies should consider the significance of actual and potential positive and negative impacts arising from these activities.
As of October 2026, published GRI Sector Standards include GRI 11: Oil and Gas 2021, GRI 12: Coal 2022, GRI 13: Agriculture, Aquaculture and Fishing 2022, and GRI 14: Mining 2024. GRI 11: Oil and Gas Sector 2021, for example, covers 22 sector topics, each linked to one or more GRI Topic Standards. When a company identifies a sector topic as material, it must disclose accordingly. Formosa Petrochemical, for example, identifies sector topic 11.1 GHG Emissions as material and responds to GRI 302: Energy and GRI 305: Emissions in its report.
GRI 11: Oil and Gas Sector 2021
GRI 11: Oil and Gas Sector 2021 (left); links between its sector topics and the UN Sustainable Development Goals (SDGs) (right)
GRI 11: Oil and Gas Sector 2021 Topics and Formosa Petrochemical's Disclosures
Formosa Petrochemical's 2021 Sustainability Report identifies GRI 11: Oil and Gas Sector 2021 topic 11.1 GHG Emissions as material, responding to the sector topic's requirements through GRI 302: Energy and GRI 305: Emissions disclosures.
2. Identify Actual and Potential Impacts: Positive and Negative Effects Across Three Areas
Identify the actual and potential impacts of operations and the value chain on the economy, environment and people, including human rights. Actual impacts have already occurred, while potential impacts represent risks that have not yet materialised. Both positive and negative impacts across these areas must be identified.
Organisations can use sustainability topics in the Sector Standards to guide identification, consider the impacts each topic may entail, and seek input from experts and stakeholders for a more complete view of operational impacts.
ASUS Sustainability Report (2021): Stakeholder Impact Survey
Use questionnaires to assess stakeholders' views on the significance of sustainability impacts, alongside in-depth interviews with closely involved stakeholders and experts to integrate different perspectives.
Business activities can have both positive benefits and negative effects. Renewable energy, for example, can reduce GHG emissions and air pollution and feed surplus green electricity into the local grid, giving communities access to clean energy and benefiting the environment. However, building renewable generation in an ecologically vulnerable area may devastate local ecosystems and create negative environmental impacts. Positive benefits cannot offset negative impacts; both must be assessed separately in the next step.
E.SUN Financial Holding Sustainability Report (2021): Ranking Positive and Negative Impacts on the Economy, Environment and People
Identify positive and negative impacts of sustainability topics, aggregate them and rank overall impact significance.
Sinyi Realty Sustainability Report (2021): Actual and Potential Positive and Negative Value Chain Impacts
Identify actual and potential positive and negative impacts arising from value chain activities.
3. Assess Impact Significance: Severity and Likelihood
Assess the actual and potential positive and negative impacts identified in the previous step, considering their severity and likelihood for the economy, environment and people, including human rights. Severity is assessed through scale, scope and irremediable character; likelihood through probability or frequency.
Some negative impacts are unlikely but would be severe if they occurred. For highly severe negative impacts, prioritise severity even when likelihood is low. Radiation leakage from a nuclear power plant, for example, is unlikely but could devastate people and ecosystems. Consulting experts and stakeholders also broadens perspectives and helps align operations with stakeholder well-being.
E.SUN Financial Holding Sustainability Report (2021): Impact Assessment Method
Use a 1–5 scale to quantify the significance and likelihood of positive and negative sustainability impacts.
Formosa Petrochemical Sustainability Report (2021): Financial Impact Significance and Likelihood
Identify the significance and likelihood of financial impacts.
4. Prioritise Impacts for Reporting: Determine Material Topics
After assessment, rank positive and negative impacts separately and define a threshold above which topics are material for reporting. Recheck the GRI Sector Standards for equally important sector topics that may have been overlooked, consult experts and stakeholders, and obtain senior management review and approval. Disclose the management approaches for material topic impacts in the sustainability report.
Materiality Assessment Examples from Six Corporate ESG Reports
GRI 3: Material Topics 2021 does not prescribe how a materiality matrix must be presented. Companies that apply the impact assessment approach above therefore meet the updated materiality approach. Below are processes and matrix presentations from 5 leading Taiwanese companies and 1 multinational. Four also adopt the double materiality principle in the draft European Sustainability Reporting Standards (Draft European Sustainability Reporting Standards, ESRS), assessing both sustainability issues' impacts on the company and the company's external impacts to align with international sustainability reporting standards.
Further reading: The EU Publishes Its First ESRS Sustainability Reporting Standards, Combining Sustainability and Financial Perspectives
(Source of right-hand diagram: Why Companies Should Assess Double Materiality)
E.SUN Financial Holding: Screen Medium- and High-Priority Topics, Then Assess Significant Impacts
E.SUN identified 26 sustainability topics and screened them by stakeholder concern and operational impact analysis to select 18 topics of medium or high concern. It further assessed their impact significance and likelihood for the economy, environment and people, including human rights, as well as their value chain effects, confirming all 18 as having significant impacts for E.SUN Financial Holding.
E.SUN Financial Holding Sustainability Report (2021)
E.SUN Financial Holding Sustainability Report (2021): Materiality Assessment Process
E.SUN Financial Holding Sustainability Report (2021): Material Topic Impact Assessment Results
Asia Cement: Work with External Experts to Assess Positive and Negative Impact Significance
Asia Cement identified 30 actual and potential impacts on the economy, environment and people, including human rights. It surveyed stakeholders, conducted impact analysis through its corporate sustainability implementation committee and sought external experts' assessments of potential positive and negative impacts, ultimately selecting 22 material topics.
Asia Cement Sustainability Report (2021)
Asia Cement Sustainability Report (2021): Materiality Assessment Process
Asia Cement Sustainability Report (2021): Rankings of Negative and Positive Impacts
Asia Cement Sustainability Report (2021): Negative Impact Significance and Likelihood Matrix
Asia Cement Sustainability Report (2021): Positive Impact Significance and Likelihood Matrix
Sinyi Realty: Include SASB Topics in Double Materiality Assessment and Select Core SDGs
Sinyi Realty identified 48 sustainability topics and analysed stakeholder concern. Internal experts and senior executives assessed the significance of impacts on the economy, environment and society and the effects on corporate development, identifying 28 topics of significant concern. These were consolidated with GRI topics, SASB material topics and Sinyi-specific topics into 17 material topics. Sinyi also assessed value chain effects on the 17 SDGs, selected 10 core SDGs and proposed corresponding management measures.
Sinyi Realty Sustainability Report (2021)
Sinyi Realty Sustainability Report (2021): Materiality Assessment Process
Sinyi Realty Sustainability Report (2021): Materiality Matrix
ASUS: Use In-Depth Stakeholder Interviews and Double Materiality to Select Topics
ASUS identified 16 sustainability topics and conducted stakeholder impact questionnaires and in-depth interviews. Its double materiality analysis assessed both impacts on ASUS and external impacts on the economy, society and people, ultimately selecting 6 highly material topics. It established management approaches and targets and tracks progress quarterly.
ASUS Sustainability Report (2021)
ASUS Sustainability Report (2021): Materiality Assessment Process
ASUS Sustainability Report (2021): Materiality Matrix
Apply double materiality to assess ASUS's impacts on the economy, environment and people, alongside sustainability issues' impacts on ASUS.
Formosa Petrochemical: Assess Significance and Likelihood Through Double Materiality and Adopt Sector Standards
After identifying 30 sustainability topics, Formosa Petrochemical analysed stakeholder concern and impacts on company operations to select 15 medium- to high-priority topics. It examined impact significance and likelihood in greater depth, then used double materiality analysis and cross-checks against GRI Sector Standards to confirm 15 material topics.
Formosa Petrochemical Sustainability Report (2021): Materiality Assessment Process
Formosa Petrochemical Sustainability Report (2021): Materiality Matrix
The matrix presents the significance of topics' impacts on the company and the level of concern among its stakeholders.
Philip Morris International: Conduct Double Materiality Analysis with a Third Party and Emphasise Stakeholder Input
Philip Morris International (PMI) is a global tobacco industry leader. Although tobacco causes substantial harm to the environment and human health, several aspects of PMI's materiality assessment offer useful lessons. Companies can study its process and presentation and consider which steps to incorporate into their own approach.
Working with an external third party, PMI drew on international instruments and local operational analyses to identify 22 sustainability topics, then asked stakeholders to rank their importance. External experts assessed PMI's impacts on the value chain, environment and society, while the company analysed the financial value effects of ESG risks and opportunities. It selected 9 material topics. Three were less significant to the company but included because of strong stakeholder concern: Materials and product eco-design, Socioeconomic well-being of tobacco-farming communities, and Post-consumer waste.
Philip Morris International Sustainability Materiality Report (2021)
Philip Morris International Sustainability Materiality Report (2021): Materiality Assessment Process
Philip Morris International Sustainability Materiality Report (2021): Stakeholder Concern
The chart clearly consolidates the 10 sustainability topics ranked most important by stakeholders.
Philip Morris International Sustainability Materiality Report (2021): Impact Assessment Criteria
The chart shows how PMI assesses sustainability topics' value chain impacts using severity, scope, likelihood, irremediable character and impact weighting.
Philip Morris International Sustainability Materiality Report (2021): Supply Chain and External Impact Significance
Assess all sustainability topics' value chain impacts using severity, scope, likelihood, irremediable character and impact weighting. Display results through shape sizes (left) and rank impact significance (right).
Philip Morris International Sustainability Materiality Report (2021): Double Materiality
The chart explains double materiality simply to help report readers understand it.
Philip Morris International Sustainability Materiality Report (2021): Materiality Matrix
Shape sizes represent stakeholder concern, while grey outer rings identify the final material topics. Arrows show changes from the previous materiality assessment.
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Climate and Energy Topic Standards: GRI 102 / 103
GRI 102: Climate Change 2025 and GRI 103: Energy 2025 take effect on 1 January 2027. This GRI 103 is the energy Topic Standard, distinct from the former GRI 103: Management Approach mentioned in this article. Further reading: Effective in 2027: GRI 102 and GRI 103 Explained—Climate Change and Energy Disclosure Standards.
Official sources: GRI Universal Standards Effective Dates, Published GRI Sector Standards, GRI 102 / 103 Effective Dates.
FAQ
View AllWhat Is New in Materiality Assessment Under GRI 2021?
GRI 2021 materiality assessment focuses on impacts, emphasising company and stakeholder evaluation of the significance of actual and potential impacts on the environment, economy and people, including human rights. The process comprises four steps: understanding the organisation’s context, identifying actual and potential impacts, assessing their significance, and prioritising impacts for reporting.
Which GRI Sector Standards Have Been Published?
As of October 2026, published GRI Sector Standards include GRI 11: Oil and Gas 2021, GRI 12: Coal 2022, GRI 13: Agriculture, Aquaculture and Fishing 2022, and GRI 14: Mining 2024.
Which Material Topics Did Formosa Petrochemical Disclose in Its 2021 Sustainability Report?
Formosa Petrochemical identified sector topic 11.1 GHG Emissions as material in its 2021 Sustainability Report and responded to the sector topic’s requirements through disclosures under GRI 302: Energy and GRI 305: Emissions.
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