GRI 203: Indirect Economic Impacts 2016 · Topic Standard · Cross-sectoral
Disclosure GRI 203-2
Significant indirect economic impacts
Practical guidance for preparing this disclosure. Use this card to identify datapoints, verify claims and organise supporting evidence. For exact requirements, always refer to the official GRI source.
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Reviewed by
Dr Ross Kurinko · GRI Certified Trainer
To prepare this disclosure
2 datapoints ↓
5 claims to verify ↓
5 evidence areas ↓
3 report examples ↓
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
| Datapoint | What to capture | Evidence hint | Owner |
|---|---|---|---|
| Key indirect impacts | Capture a concise set of the organisation’s most important indirect economic effects, with enough detail to show what happened, where it showed up, and why it matters. | Impact assessments, project or programme reviews, stakeholder feedback, business case or evaluation papers, and any internal logs that describe the effect and its scale. | Sustainability / strategy |
| Impact significance context | Capture how those indirect economic effects are judged against outside reference points and what stakeholders have said matters most, so the narrative shows why they are significant. | Benchmarking papers, peer or market comparisons, stakeholder engagement outputs, materiality or prioritisation records, and management papers explaining the basis for significance. | Sustainability / strategy |
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.
LRA working checklist - paraphrased; see official source
How to prepare
- Set 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.
- Agree 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.
- Gather 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.
- Prepare 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.
- Record 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.
- Check 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 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.
Formal email template
Subject: Request for examples and evidence on indirect economic effects Hi [name/team], I’m preparing the sustainability reporting pack and need your help with the section on wider economic effects linked to our activities. Please send a short summary of the main examples you have identified for [period], together with the evidence used to show why they are important. In particular, please include: - the effect or example, using your team’s own wording; - where it was observed and which part of the business it relates to; - how you judged its importance; - any outside reference points used, such as peer comparisons, local data, policy targets, or stakeholder feedback; - the source documents or files that support the summary. If there are any known gaps, exclusions, or items still under review, please note those too. Please return this by [date]. Use your own internal terms first, then we will map them to the reporting disclosure. Please check the official source before sign-off. Thanks, [preparer name]
Short Teams / Slack version
Hi [name/team] — could you send over the examples of wider economic effects from [period] plus the evidence behind why they matter? Please use your team’s own terms, and include the basis for judging importance, any outside benchmarks or stakeholder input, and the source files. If anything is excluded or still being checked, please flag it. Needed by [date].
Industry examples
Infrastructure / Transport
Context. A rail operator is reviewing knock-on effects from a station upgrade and service changes.
Adapted request. Please share the examples of wider economic effects linked to the station upgrade and timetable changes in [period], using your project team’s wording. Include the basis for judging importance, any local economic data or council feedback used, and the supporting files.
Example response. Example 1: increased footfall for nearby shops after the station works reopened. Importance basis: local business survey and town-centre data. External reference points: council regeneration plan and local vacancy rates. Evidence: survey summary, footfall report, project close-out note. Example 2: temporary disruption to traders during works. Importance basis: stakeholder complaints and mitigation review. External reference points: community forum feedback. Evidence: issue log, meeting minutes, mitigation tracker.
Food manufacturing
Context. A manufacturer is assessing effects from sourcing, production, and plant expansion on local suppliers and employment.
Adapted request. Please provide the examples of wider economic effects from [period] linked to the plant and supply chain, using your operational terms. Include how you judged their importance, any regional labour or supplier data used, and the source records.
Example response. Example 1: increased orders for local packaging suppliers after line expansion. Importance basis: spend analysis and supplier feedback. External reference points: regional supplier development data. Evidence: procurement report, supplier meeting notes. Example 2: apprenticeship placements created through the expansion project. Importance basis: workforce plan and local skills partnership input. External reference points: local skills strategy. Evidence: HR plan, partnership email, apprenticeship tracker.
The full request pack — response form, data table, evidence metadata and sign-off — is in the Download Centre.
Draft your 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
Professional preparation tools and forms for GRI 203-2. Each download includes a concise “How to use” guide.
Assurance readiness
For each claim, check the evidence
| Claim | Risk | Evidence to check |
|---|---|---|
| I prepared the coverage figure by using the same cut-off date and source set throughout, so the examples of indirect effects were drawn from the disclosed operations rather than from ad hoc additions. | An assurer may test whether the examples were selected consistently, whether any sites, projects or periods were left out without a clear reason, and whether the figure could be overstated by inconsistent boundaries. | Boundary memo or methodology note; list of included entities, sites or activities; source extracts used to identify the examples; version history showing the same cut-off date and source set; review notes confirming no unexplained exclusions or additions. |
| I based the examples on records that were current at the reporting date and checked that the underlying data were complete enough to support the judgement we made about which impacts to include. | An assurer may probe whether the underlying information was up to date, whether the data trail is complete, and whether the selection relied on unsupported judgement or incomplete records. | Underlying datasets or case files; date stamps on source records; completeness checks; internal emails or meeting notes showing the selection process; sign-off from the owner of the data set or report preparer. |
| Before publication, I compared the disclosed examples with the stakeholder feedback and external reference points we used, so the narrative reflects why these impacts were treated as material in our context. | An assurer may ask whether the significance judgement was anchored to the stated benchmarks and stakeholder inputs, or whether the wording was added later without evidence. | Stakeholder engagement summary; benchmark or peer comparison pack; materiality or significance assessment; draft-to-final change log; approval record showing review of the final wording against the supporting evidence. |
| I kept working papers that show how each example was traced back to source evidence, and I checked the final text against those papers before it went out. | An assurer may test whether there is a clear audit trail from the published statement to the source evidence, and whether the final wording matches the supporting files. | Working papers or evidence index; traceability matrix from claim to source documents; final proofread copy; reviewer checklist; evidence of sign-off by the responsible manager or report owner. |
| I reviewed the disclosure for internal consistency, making sure the examples, the significance explanation and the supporting notes all pointed to the same set of facts. | An assurer may look for contradictions between the examples, the explanation of importance and the supporting narrative, or for signs that the final disclosure was not checked as a whole. | Cross-check or consistency review checklist; annotated draft showing corrections; final approval email or sign-off sheet; notes from the last review meeting; comparison of the published text with the supporting schedule. |
Evidence pack to prepare
- The governing policy or written commitment behind this disclosure
- A methodology / definition note setting out how the disclosure was scoped and prepared
- Source-system exports the figures or facts were drawn from
- The internal approval / sign-off record for the disclosure before publication
- Minutes or records evidencing the relevant engagement or consultation
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.
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.
Water utilities · synthetic · written by LRA
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.
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.
Food manufacturing · synthetic · written by LRA
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.
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.
Draft output & visualisation ideas
How to turn the collected data into a draft disclosure. Suggested visuals and a GRI content-index line generated from this disclosure's datapoints.
Suggested visuals
- Examples of material knock-on effects — table: A concise list of the main indirect economic effects identified, with a short note on where each effect was observed and why it matters.
- Relative importance versus outside reference points — bar: A comparison of the assessed importance of each indirect effect against selected external reference points and stakeholder priorities.
- Impact significance by theme — stacked bar: How the identified indirect effects break down across themes, with each segment showing how important the effect is judged to be.
- Priority effects and stakeholder emphasis — donut: The share of identified indirect effects that align with the issues stakeholders have highlighted as most important.
- Change in assessed importance over time — line: How the assessed importance of the indirect effects has moved across reporting periods, if the same basis has been used consistently.
From a number to a disclosure
What separates a figure from a disclosure.
Basic
We identified two significant indirect economic impacts this year.
Better
We identified two significant indirect economic impacts this year, and we judged them against external benchmarks and stakeholder priorities.
Best
We identified two significant indirect economic impacts this year across our UK operations, assessed them against external benchmarks and stakeholder priorities during the reporting period, and the increase from one last year mainly reflected a new local supplier programme that expanded spend in the area.
Real reports where this topic is disclosed. The confidence label shows how closely each match maps to GRI 203-2 — these are report practice, not exact disclosure examples.
| Company | Sector · Country | Year | Match | Page | Report | Assurance | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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CTCI Corporation | Construction and Engineering · Taiwan | 2024 | Partial | p. 195 →p. 25 →p. 28 → | Sustainability Report 2024 → | EY; BSI; SGS | |||||||||
Evidence in CTCI Corporation’s reportWhat the report shows 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.
Evidence-based summary of this company’s own report — not a disclosure template to copy, and not a compliance verdict. Datapoint coverage
Source trail
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Mega Financial Holding Co., Ltd. | Banks / Diverse Financials / Insurance · Taiwan | 2024 | Exact | p. 29 →p. 36 →p. 37 → | 2024 Sustainability Report → | PwC | |||||||||
Evidence in Mega Financial Holding Co., Ltd.’s reportWhat the report shows 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.
Evidence-based summary of this company’s own report — not a disclosure template to copy, and not a compliance verdict. Datapoint coverage
Source trail
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Acer Incorporated | Technology Hardware and Equipment · Taiwan | 2024 | Partial | p. 21 →p. 132 →p. 147 → | 2024 Acer Sustainability Report → | SGS Taiwan; KPMG (financial data) | |||||||||
Evidence in Acer Incorporated’s reportWhat the report shows 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).
Evidence-based summary of this company’s own report — not a disclosure template to copy, and not a compliance verdict. Datapoint coverage
Source trail
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Check your understanding
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.Which impact should be treated as the stronger example to include, and how should the team frame it in the narrative?
Model 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.Can this be used as an indirect economic impact example for the disclosure?
Model 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.How should the team judge and explain the significance of these impacts in relation to outside benchmarks and stakeholder priorities?
Model 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.What should the preparer do before sign-off?
Model 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.
Analyse this disclosure across real reports
See how companies actually report GRI 203-2 — drawn from their own published reports, with the exact pages, and an LRA AI-assistant that works through it with you. Available to LRA Community members and to students throughout their platform access.
Related framework references
How this disclosure maps across the major reporting frameworks.
Related & explore
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. ↑ section
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. ↑ section
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. ↑ section
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. ↑ section
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. ↑ section
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. ↑ section
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. ↑ section
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. ↑ section
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. ↑ section
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. ↑ section
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?
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Sources, status and disclaimer
This LRA assistance tool is designed for educational and internal data-collection purposes. It is not an official interpretation of the GRI Standards, IFRS Sustainability Disclosure Standards or EU CSRD/ESRS requirements. When applying these frameworks in professional practice, users should consult and double-check the official standards, guidance and applicable regulatory sources.
