What Are the Common Framework for Sustainability Reporting?
The UN Sustainable Stock Exchange initiative (SSE) maintains a database of ESG disclosure guidance materials.
As of March 2021, 56 of the 105 SSE members globally have published guidance material for listed companies. The SSE database also identifies mentions of 6 major reporting frameworks in the published guidance material. The 6 frameworks are: Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), International Integrated Reporting Council (IIRC), CDP Global (CDP), Taskforce for Climate-related Financial Disclosure (TCFD), Climate Disclosure Standards Board (CDSB).
ESG Reporting Standards
Global Reporting Initiative (GRI)
GRI
Sustainability Accounting Standards Board (SASB)
SASB
International Integrated Reporting Council (IIRC)
IIRC
Focused Reporting Standards
Task Force on Climate-related Financial Disclosures (TCFD)
TCFD
CDP Global (CDP)
CDP
Climate Disclosure Standards Board (CDSB)
CDSB
UN Guiding Principles Reporting Framework
UN Guiding Principles Reporting Framework
Deciding on which framework to adopt?
Deciding on which ESG reporting framework to adopt largely depends on a company’s specific needs and goals, as well as the expectations and requirements of its stakeholders. Here are some factors to consider when selecting an ESG reporting framework:
Materiality: The framework should help companies identify and report on their material ESG issues, which are the sustainability topics that are most relevant to the company’s business, industry, and stakeholders.
Industry-specificity: Some frameworks, such as SASB, provide industry-specific guidelines for ESG reporting, which can be helpful in identifying and reporting on industry-specific ESG risks and opportunities.
Stakeholder expectations: Companies should consider the expectations and requirements of their stakeholders, such as investors, customers, regulators, and civil society organizations, when selecting an ESG reporting framework.
Reporting maturity: Companies at different stages of ESG reporting maturity may benefit from different frameworks. For example, companies that are just starting to report on their sustainability performance may find it useful to adopt a more general framework like GRI, while companies with more advanced reporting capabilities may benefit from adopting more specific frameworks like SASB or TCFD.
Integration with other reporting frameworks: Companies should also consider how the selected ESG reporting framework integrates with other reporting frameworks they use, such as financial reporting or integrated reporting.
Ultimately, the framework that a company chooses to adopt should be aligned with its sustainability strategy, goals, and values, and should provide a clear and transparent picture of its ESG performance and impacts to its stakeholders.