GRI and ISSB serve different purposes in ESG reporting: GRI Standards help organisations report their impacts on the economy, environment and people for a wide group of stakeholders, while the ISSB's IFRS S1 and IFRS S2 help companies report sustainability-related risks and opportunities that affect their financial prospects for investors. In Malaysia, the ISSB standards form the mandatory baseline under the National Sustainability Reporting Framework (NSRF), and GRI remains a widely used complement.

For a reporting team, this can feel like a choice between two competing rulebooks. It is more accurate to see them as tools built for different readers. One answers "what difference does the company make to the world?" and the other answers "how does the world affect the company's value?"

This article compares the two frameworks, explains where Malaysian rules point, and offers a practical way to use both without doubling the workload.

What Is the Difference Between GRI and ISSB in ESG Reporting?

The difference comes down to audience and materiality. GRI is stakeholder-oriented and built on impact materiality, whereas ISSB is investor-oriented and built on financial materiality. Both cover environmental, social and governance topics, but they decide what to include in different ways.

GRI asks which topics reflect the organisation's most significant effects on people and the environment. ISSB asks which sustainability-related matters could reasonably influence the decisions of investors and lenders. The first lens looks outward from the company, and the second looks inward at enterprise value.

What Is GRI?

GRI, the Global Reporting Initiative, is a long-established set of sustainability reporting standards. Its Universal Standards 2021 set out general disclosures and guidance on determining material topics, and separate topic standards cover subjects such as emissions, water, labour practices and human rights. Many Malaysian companies adopted GRI before the NSRF existed, and some still use it to structure their stakeholder reports.

What Is ISSB?

The ISSB is the International Sustainability Standards Board, created by the IFRS Foundation. It issued IFRS S1, covering general sustainability-related financial disclosures, and IFRS S2, covering climate-related disclosures. The NSRF names these two standards as Malaysia's baseline for sustainability reporting.

Is One Framework Better Than the Other?

Neither is better in every situation. ISSB suits investor-facing, comparable disclosure that connects to financial statements, while GRI suits broader accountability to communities, employees, regulators and civil society. The right choice depends on who the report is for and what the law requires.

How Do GRI and ISSB Compare on Materiality?

GRI uses impact materiality, ISSB uses financial materiality, and some other regimes use a combination called double materiality. Materiality is the biggest practical difference because it determines which topics appear in the report.

What Is Impact Materiality?

Impact materiality means a topic matters because of the company's significant effect on people or the environment, whether or not that effect changes profits today. A company drawing heavily on water in a stressed area would report on it under this lens even if the immediate financial effect were small.

What Is Financial Materiality?

Financial materiality means information is material if leaving it out could influence investor and lender decisions. A flood risk to a major facility is a clear example, since it could affect revenue, costs and asset values. IFRS S1 applies this lens.

Can the Two Lenses Overlap?

Yes, and often they do. Many topics, such as emissions, safety and supply chain conduct, matter both because of their impact and because of their financial risk. Over time, impacts that are ignored can become financial risks, which is why many reporters treat the two lenses as connected rather than opposed.

What Does Malaysia Require: GRI or ISSB for ESG Reporting?

Malaysia requires ISSB-aligned reporting for in-scope companies through the NSRF, and it does not require GRI. The NSRF was published on 24 September 2024 by the Advisory Committee on Sustainability Reporting, chaired by the Securities Commission Malaysia, with IFRS S1 and S2 as the baseline.

Bursa Malaysia amended its Main Market and ACE Market Listing Requirements in December 2024 so that the Sustainability Statement aligns with the framework. This turned the NSRF into a listing obligation for Bursa-listed issuers.

Which Companies Are Covered?

The NSRF covers Main Market issuers, ACE Market issuers and non-listed companies with consolidated revenue of RM2 billion or more for two consecutive years. Group 1, large Main Market issuers with a market capitalisation of RM2 billion or above, started for financial years from 1 January 2025. Group 2, the other Main Market issuers, starts on 1 January 2026, and Group 3, covering ACE Market issuers and large non-listed companies, starts on 1 January 2027.

What Reliefs Help Companies Adjust?

Group 1 and Group 2 companies may focus on climate-related disclosures in their first two reporting periods and postpone Scope 3 emissions, except for categories a regulator already requires. Bursa Main Market issuers already report Scope 3 emissions from business travel and employee commuting. These reliefs give companies time to build ISSB-ready systems.

Can Companies Still Use GRI?

Yes, GRI remains available as a voluntary or complementary framework. Some practitioners note that Malaysian regulators have signalled work on an interoperability approach mapping GRI disclosures to IFRS S1 and S2. Companies should confirm the current position with official sources before relying on any mapping.

How Do GRI and ISSB Differ on Structure and Content?

GRI is organised around general disclosures and topic-specific standards, while ISSB is organised around four pillars: governance, strategy, risk management, and metrics and targets. The structures reflect their different aims.

How Is GRI Structured?

GRI begins with disclosures about the organisation and its reporting practices, then guides the identification of material topics, then provides topic standards with specific disclosures. A company selects topics based on its significant impacts and reports against the relevant standards. The approach is flexible and broad.

How Is ISSB Structured?

ISSB requires companies to explain governance of sustainability-related risks, the effect on strategy and business model, how risks are managed, and the metrics and targets used. IFRS S2 adds climate-specific requirements, including scenario analysis and Scope 1, Scope 2 and Scope 3 emissions. The approach is more prescriptive, and the information is meant to sit alongside the financial statements.

Which Framework Is Easier to Assure?

ISSB-aligned disclosures that rely on quantified metrics, such as emissions, are generally easier to test, because they follow defined methods. The NSRF plans mandatory reasonable assurance of Scope 1 and Scope 2 emissions for Group 1 entities. In September 2026 the Advisory Committee deferred that start to annual periods beginning on or after 1 January 2028, citing disclosure quality in the first reporting cohort. Any independent assurance must follow ISSA 5000.

How Can Malaysian Companies Use GRI and ISSB Together?

Companies can use them together by building one data foundation and producing two views from it: a mandatory ISSB-aligned disclosure and a broader stakeholder report. The key is consistency, so numbers and boundaries match across both.

What Is a Practical Approach?

A practical approach is to start with the mandatory NSRF requirements, document emissions methods and controls, and then add GRI content where stakeholders expect it. A shared data catalogue, with defined owners for each metric, reduces duplication. Finance and sustainability teams should coordinate so the reports reflect the same period and entity.

How Should Companies Handle Differences in Topics?

Companies should run a materiality assessment that considers both lenses, then record why topics were included or excluded. A topic that is not financially material but has a significant impact can still appear in the stakeholder report. Explaining the reasoning helps readers understand the scope of each document.

What Are the Different Views on GRI vs ISSB in Malaysia?

Stakeholders broadly support global alignment, but they weigh the frameworks differently. The debate is mostly about what the baseline should leave in or out.

What Do Investors and Regulators Say?

Investors and regulators tend to favour ISSB because it delivers consistent, comparable and decision-useful information, and because it aligns Malaysia with more than 20 jurisdictions moving toward the same standards. In their view, a clear financial focus keeps disclosures concise.

What Do Civil Society and Impact-Focused Reporters Say?

Civil society groups and impact-focused reporters argue that a purely financial lens can miss harms that have not yet reached company accounts. They see GRI as essential for accountability to workers, communities and the environment, and they encourage companies to keep reporting on impacts alongside the NSRF.

What Do Companies Say?

Companies often say that running multiple frameworks is costly, especially for smaller teams. They welcome clear mapping and a single baseline, and later-phase companies are seeking practical guidance and training. Many would like regulators to confirm how voluntary frameworks fit alongside the mandatory one.

FAQ: Common Questions About GRI vs ISSB and ESG Reporting in Malaysia

Is GRI Mandatory in Malaysia?

No. The mandatory baseline under the NSRF is IFRS S1 and S2. GRI is voluntary, although many companies use it.

Does ISSB Replace GRI?

Not as a general rule. ISSB serves investor-focused disclosure, while GRI serves broader impact reporting. Many companies use both.

Which Framework Should a Bursa-Listed Company Prioritise?

Bursa-listed companies should prioritise the NSRF requirements, since they are tied to the listing rules, and then add voluntary frameworks as needed.

What Is the Main Difference in Materiality?

GRI uses impact materiality, and ISSB uses financial materiality.

Do Both Frameworks Require Emissions Reporting?

Both address emissions. IFRS S2 requires Scope 1, Scope 2 and Scope 3 greenhouse gas emissions, with Scope 3 relief available under the NSRF.

When Does Mandatory Assurance Start?

Mandatory reasonable assurance of Scope 1 and Scope 2 emissions for Group 1 entities now applies to annual periods beginning on or after 1 January 2028.

Conclusion

GRI and ISSB are complementary tools rather than rivals. ISSB sets Malaysia's mandatory, investor-focused baseline, and GRI offers a way to report wider impacts to wider audiences.

Companies that build a single, well-controlled data set can serve both. The skill is in knowing which reader each report is for, and in keeping the numbers consistent between them.