Disclosure focus
This disclosure asks an organisation to explain the most important indirect economic effects it has on people, businesses and communities beyond its own direct spending and revenues. In practice, that means describing where its activities create or reduce economic value for others, such as through jobs, local procurement, skills, infrastructure, supply chains, or changes in access to markets and services. The focus is on the impacts that matter most, not every possible knock-on effect.
The practical question is how broadly the organisation has looked across its operations and value chain, rather than only highlighting a few flagship sites or isolated success stories. It should identify the significant effects, explain where they occur, and show why they are material. A useful report will distinguish between positive and negative impacts and make clear whether the picture reflects the whole organisation or only selected locations or activities.
This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official GRI source.
Before you start
A quick mental checklist before you prepare this disclosure — tick each as you settle it.
Preparation
Key datapoints to prepare
＋ Show GRI 203-2 sub-elements (LRA working checklist)
List examples of the indirect economic effects you have identified as significant.
Explain how important those indirect economic effects are when compared with outside benchmarks and what stakeholders consider important.
How to prepare it
1Set the reporting boundary first: decide which parts of the business, projects, sites, or value-chain activities you will assess for indirect economic effects, and keep that scope consistent with the rest of the report.
2Agree the test for what counts as material: use your own internal criteria to identify which knock-on economic effects are worth reporting, rather than listing every possible consequence.
3Gather support for the examples you plan to disclose: pull together records, analysis, management papers, stakeholder input, or other source material that shows why each effect was identified as important.
4Prepare the disclosure content in two parts: give concrete examples of the indirect economic effects you have identified, then explain how important they are when compared with outside reference points and what stakeholders have said matters.
5Record any limits or changes clearly: note what was left out, any assumptions used, and any shifts in scope, method, or judgement from the prior period so readers can understand the basis of the disclosure.
6Check the final wording against the source material: confirm that the examples and significance discussion match the evidence file, and that the published text still reflects the official requirement without adding or omitting points.
Request the data
Request examples and supporting evidence of indirect economic impacts
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
Which knock-on effects from our activities have been identified, and what evidence shows why they matter in relation to outside benchmarks and stakeholder priorities?
Use your organisation’s own language first, then map it to the disclosure. For example, if you talk about downstream effects, community spillovers, local multiplier effects, or wider value creation, use those terms in the request and only translate them into the reporting label at the end. Keep the ask practical: ask for the examples, the basis for judging importance, and the supporting sources.
Weak request
Please provide the GRI 203-2 evidence for significant indirect economic impacts.
Why it fails: This uses framework language only, so the owner may not know what to pull, where to look, or how to frame it in their own records. It also does not ask for the practical evidence needed to show the examples and the basis for judging importance.
Better request
Please send the examples of wider economic effects from [period] that your team has identified, plus the evidence showing why they matter. Use your own internal terms, and include the source documents, the outside reference points used, and any stakeholder input that informed the judgement.
Industry examples
Draft your disclosure
Notes that turn data into a disclosure
LRA training templates — adapt them to your organisation, and check the official source before sign-off.
Method note
Explain how the organisation defined an indirect economic effect, how it selected the examples included, and what basis it used to judge importance against outside reference points and stakeholder priorities.
Context note
Set out what the figures show about the organisation’s wider economic influence beyond its own operations, and why the selected effects are considered significant in practice.
Fluctuation statement
If the pattern has changed, describe whether that reflects a different set of effects being identified, a shift in the importance assigned to them, or changes in the external reference points used for comparison.
Content index entry
GRI 203-2 Significant indirect economic impacts — [location / page] / [notes]
Download Centre
Preparation tools & forms
Professional preparation tools for GRI 203-2 — free with an LRA Community membership. Register once (it's free) and every download unlocks, together with the Disclosure Library, templates and the LRA AI-assistant.
Free · Community members
Assurance readiness
For each claim, check the evidence
Evidence pack to prepare
Common reporting gaps
The information is presented without a date or as-at point.The scope or boundary of the statement is left undefined.Key terms are used inconsistently across the report.Material changes since the previous period are not disclosed.Assertions are made without supporting detail or a source record.Boilerplate is used that does not actually answer what is asked.
Common gaps
Mistakes to avoid when collecting the data
Wrong owner
The team asks the wrong business lead for examples, so the evidence comes from someone who does not hold the day-to-day records.
Framework language first
People ask for “significant indirect impacts” instead of the organisation’s own impact terms, and the source team cannot map the request to its files.
Scope left vague
The collector never pins down which sites, activities, or business lines are in scope, so the evidence set ends up incomplete or overbroad.
Wrong time basis
Data is pulled for a different reporting period or cut-off date than the one being used for the disclosure, which makes the figures and examples inconsistent.
Mixed counting basis
One source counts individual events while another counts affected projects or locations, and the two are merged as if they were the same measure.
Source labels lost
Original file names, system tags, or reference codes are stripped away during collation, so no one can trace each item back to its starting record.
Separate groups merged
Impacts that should stay in distinct operational groups are combined into one list, which hides where each effect came from and weakens the analysis.
No evidence trail
The pack is assembled without notes on who supplied each item, when it was taken, or which version was used, so review and sign-off stall.
Where judgement is often needed
Choosing which knock-on effects count as significant
Set a clear internal test for which downstream effects are material enough to include, then explain that test and why the selected examples were treated as significant.
Handling impacts that differ by country or market
Where the same activity has different knock-on effects in different places, use the local business context to decide what to include and note the country-specific basis for that choice.
Deciding whether to include effects near the boundary of the business
For impacts that sit just outside the direct operating area but are still linked to the organisation’s activities, explain the line you drew and why those cases were included or left out.
Updating the picture after buying or selling a business
If a purchase or disposal changes the set of downstream effects in the reporting period, state the cut-off date used and describe whether the examples reflect the new group structure or the earlier one.
Using estimates where hard numbers are not available
When the effect cannot be measured directly, use a reasonable estimate, say so plainly, and describe the main assumptions and any known limits.
Mixing different evidence sources
If some examples are based on measured data and others on estimates or third-party information, explain the different bases so readers can see how each case was assessed.
Applying external benchmarks and stakeholder priorities
When judging importance, show which outside reference points and stakeholder concerns were used, and explain how they influenced the final selection of examples.
Aggregating sensitive information
If individual cases cannot be shown because of privacy or confidentiality limits, group them at a level that protects the data and explain the aggregation approach.
Rounding and presentation of counts or values
If figures are rounded, keep the rounded presentation consistent across the disclosure and note the rounding basis so the totals still make sense.
Examples
Illustrative examples
Synthetic, written by LRA — not from a company report, not text from any standard.
Illustrative (synthetic) example — Water utilities
*Synthetic example only.* We set out the main knock-on effects we identified from our network upgrade programme and showed why they matter beyond our own operations. - The largest effect was local contractor spend: £18 million of work went to 64 small firms, supporting an estimated 210 jobs in the supply chain and lifting business rates receipts in two districts by £0.6 million. - We judged these effects to be material because they aligned with local authority priorities on employment and SME growth, and because the combined value was equivalent to 7% of our annual capital spend, which we used as an internal benchmark for scale.
Illustrative only: the disclosure names the main downstream effects we identified, then explains why we treated them as important by comparing them with a simple internal scale measure and with local stakeholder priorities.
Illustrative (synthetic) example — Food manufacturing
*Synthetic example only.* Our product expansion programme created several wider economic effects outside our sites, which we summarised in plain terms for readers. - We estimated £9.4 million of extra demand for regional packaging, transport and maintenance suppliers, alongside 38 apprenticeships and trainee roles created by those suppliers; no single supplier accounted for more than £1.2 million. - We considered these effects significant because they were large relative to our £62 million procurement budget, and because they matched stakeholder concerns raised in our community panel about skills, local purchasing and resilient jobs.
Illustrative only: the disclosure identifies the main spillover effects from our activity and explains their importance by reference to a budget-based comparison and to issues raised by stakeholders.
Company reports
How companies report GRI 203-2
Real reports where this topic is disclosed. These are report practice, not exact disclosure templates to copy.
CTCI Corporation
Construction and Engineering · Taiwan · 2024
CTCI Corporation’s Sustainability Report 2024 identifies 10 significant impact items related to economic, environmental, and human rights issues, with specific mention of economic impacts on page 26. The report also addresses indirect economic impacts and infrastructure investments under GRI 203, as detailed on page 195. However, the report provides limited detail on the specific nature or outcomes of these indirect economic impacts beyond these mentions, leaving some aspects unclear.
Mega Financial Holding Co., Ltd.
Banks / Diverse Financials / Insurance · Taiwan · 2024
Mega Financial Holding Co., Ltd.'s 2024 Sustainability Report includes coverage of indirect economic impacts, specifically referencing the GRI 203-2 standard on significant indirect economic impacts on pages 193 and 194. The report also mentions related topics such as local communities and financial inclusion on page 38, and economic performance material topics on page 10. However, there is no quotable evidence found for narrative item (b), indicating some aspects of the disclosure remain unaddressed or unclear in the report.
Acer Incorporated
Technology Hardware and Equipment · Taiwan · 2024
Acer Incorporated’s 2024 Sustainability Report provides covered data on indirect economic impacts related to digital inclusion on page 147, indicating a focus on significant indirect economic impacts (p.147). The report also addresses stakeholder engagement, including approaches and collective bargaining agreements, on page 145 (p.145). However, details on the quantification methods for economic impacts such as Gross Value Added (GVA) are mentioned but not clearly linked to specific outcomes, and the report lacks clarity on continuous assessment processes for environmental impacts beyond general statements (p.29, p.18).
✓ LRA AI Assistant · Human-in-the-loop
Ask Study Studio AI assistant about this disclosure
Get a practical answer for your reporting context. Your first answer is free — create a free account to continue the conversation.
TryHow do I prepare GRI 203-2?What data do I need to collect?Where can I see a real-report example?What mistakes should I avoid?
1 free answer
Check your understanding
Scenarios to work through
A preparer has two candidate impacts from a regional supplier programme: 18 local jobs created through a training partnership, and a one-off community grant of £40,000. Internal review shows the jobs effect is larger and more persistent, while the grant is helpful but limited in reach.
QWhich impact should be treated as the stronger example to include, and how should the team frame it in the narrative?
Reveal model answer →Hide answer ↑Include the jobs effect as the clearer example of a meaningful knock-on effect, because it is the more substantial and lasting change in the local economy. The narrative should describe the impact in plain business terms and explain why it matters, rather than listing it as a generic benefit.
Why this matters · Choose examples that reflect real downstream effects, and explain why they matter in context.
A business unit wants to report a new logistics hub because it reduced delivery times for customers, but the evidence only shows an internal efficiency gain and no clear effect on suppliers, workers, or the surrounding area.
QCan this be used as an indirect economic impact example for the disclosure?
Reveal model answer →Hide answer ↑Not on its own. The team should only use it if it can show a real effect beyond the organisation itself, such as a change in local employment, supplier income, or community business activity. An internal efficiency improvement without an external knock-on effect does not fit the purpose of this disclosure.
Why this matters · The example needs an outside-the-business effect, not just an internal operational gain.
The reporting team has identified three impacts: 120 temporary construction jobs, £2.4 million spent with local firms, and a rise in footfall for nearby shops during the project period. External benchmark data shows the local business district is under pressure, and community feedback ranks jobs and local spending as top priorities.
QHow should the team judge and explain the significance of these impacts in relation to outside benchmarks and stakeholder priorities?
Reveal model answer →Hide answer ↑The team should assess each impact against the external context and explain which ones are most significant because they align with the local benchmark pressures and the priorities raised by stakeholders. In this case, the jobs and local spending are likely to carry the most weight, while the footfall effect should be included if the evidence shows it is material and not just incidental.
Why this matters · Significance is judged by comparing the impact with outside reference points and what stakeholders say matters.
A preparer has a draft note that says the company supports the local economy through procurement, training, and community investment, but it does not separate the actual indirect effects from general activity. The evidence file contains a list of specific outcomes, including 35 apprenticeships, £1.1 million of local supplier spend, and 9 new micro-business contracts.
QWhat should the preparer do before sign-off?
Reveal model answer →Hide answer ↑The preparer should rewrite the note so it names the concrete downstream effects, not just the organisation’s activities. It should present the specific outcomes that show how the business affected others, and then explain their importance using the available evidence and the relevant outside context.
Why this matters · Report the actual downstream outcomes, not a broad description of what the organisation did.
Framework references
Related framework references
How this disclosure maps across the major reporting frameworks.
Primary
Related & explore
FAQ
Questions this page answers
For GRI 203-2, what should I gather before I start drafting the disclosure?+−
The page says to prepare two datapoints: the key indirect impacts and the context that shows why those impacts are significant. Use the step-by-step preparation section to turn that into a clear scope, method and evidence trail before drafting.
How do I decide the scope for GRI 203-2 indirect economic impacts?+−
Use the page’s preparation steps to define which indirect impacts you are covering and the context used to judge significance. Keep the scope consistent with the evidence pack so the draft can be supported later.
What evidence do I need in the pack for GRI 203-2 assurance readiness?+−
The page includes an evidence pack with five items for assurance readiness, alongside five assurance claims to verify. Build the pack around the claim, the risk it addresses and the evidence that supports it.
Who should own the GRI 203-2 data collection and sign-off?+−
The page is designed for sustainability/ESG managers, HR or data owners, and assurance reviewers, so ownership should sit with the people who can explain the impacts and provide the evidence. Use the workbook to assign tasks and keep the trail clear.
What are the most common mistakes people make when reporting GRI 203-2?+−
The page has a section on common reporting gaps and mistakes, which is there to help you avoid weak scope, thin evidence or unclear drafting. Check those points before you finalise the disclosure.
How do I use the GRI 203-2 workbook to prepare the disclosure?+−
The Download Centre includes a Prep & Assurance workbook in .xlsx format and a printable Library Card in .pdf. Use the workbook to organise the preparation steps, evidence and assurance checks, then use the draft-output section to shape the final text.
Can I use the synthetic example disclosure for GRI 203-2 as a template?+−
Yes, but only as a synthetic illustration. The page says the example is illustrative and includes a quantitative table where relevant, so use it to see how the disclosure can be structured rather than copying it as a real company example.
What should the draft output for GRI 203-2 include?+−
The page’s draft-output section points you to visualisation ideas, narrative starters and a GRI content-index line. That gives you a practical starting point for turning the prepared data into a draft disclosure.
How do I make GRI 203-2 easier to assure before submission?+−
Use the five assurance claims, the five-item evidence pack and the common gaps section together. That helps you check whether the claim, the risk and the evidence line up before a reviewer sees the draft.
Where can I find real company examples of indirect economic impacts for GRI 203-2?+−
The page includes a ‘From company reports’ table that links to real published reports where the topic is disclosed. Use it for reference only, not as a substitute for your own scope, method and evidence.
More questions this page can help with
GRI 203-2 indirect economic impacts: what data points should I collect first?How do I write the impact significance context for GRI 203-2?What does the GRI 203-2 assurance evidence pack need to contain?How do I turn GRI 203-2 prep notes into a draft disclosure?What are the common GRI 203-2 reporting gaps to check before assurance?How do I use the GRI 203-2 Prep & Assurance workbook?Is there a synthetic example disclosure for GRI 203-2 I can follow?Who should own the GRI 203-2 indirect economic impacts disclosure?What should a GRI 203-2 content index line look like in practice?Where are the real report links for GRI 203-2 indirect economic impacts?How do I check GRI 203-2 is assurance-ready using the page?What visualisation ideas does the GRI 203-2 page suggest for the draft output?
Free · LRA Community
Get your GRI 203-2 tools — free
Your preparation tools are free for LRA Community members and students. Register once (it's free) and your download starts right away — plus the Disclosure Library, templates and the LRA AI-assistant.
✓
You're in — your download is starting
Your file is downloading now. Your Community Cabinet — with the Disclosure Library, templates and the LRA AI-assistant — is ready too.
Open your Cabinet →