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Navigating Through ESG Reporting Metrics

The paradigm shift towards sustainability and sustainable business practices is rapidly gaining momentum in today’s corporate world. This change is increasing the demand for comparable, trustworthy, and widely available ESG data—information on businesses’ environmental, social, and governance activities. But how are businesses actually sharing this information? And how can they manage it in the best way to ensure that it satisfies the requirements and standards of the stakeholders?

Let’s navigate through a comprehensive list of different ESG standards, guidelines and frameworks that are available for companies to report on their sustainability initiatives.

Corporate sustainability refers to a business strategy that involves delivering goods and services in a way that is both profitable for the company and ethical towards society and the environment, both in terms of how it uses and impacts natural, human, and social capital. Every global economic, social, governance, and environmental institution is required to act responsibly as nations, organizations, and people directly suffer the impacts of unsustainable operations. The majority of sustainability reporting standards, frameworks, and guidelines are built on the idea that all aspects of existence, including social demands and environmental requirements, must be preserved for economic progress to begin or continue.

Prior to diving into the many ESG frameworks and standards, it’s crucial to comprehend how the Global Reporting Initiative defines the two:

  • A standard is a specific quality requirement for reporting. It contains detailed criteria, or ESG metrics, for “what” should be reported on a specific topic. Standards involve a public interest focus, independence, due process, and public consultation, strengthening the basis of what is being asked.
  • A framework is a broader, contextual “frame” for information. It is a set of principles providing guidance and shaping understanding of a certain topic, defining the direction of information but not the methodology of collection or reporting itself. It may be used when a well-defined standard does not exist. 

List of Key Organizations: ESG Frameworks

1. European Financial Reporting Advisory Group (EFRAG)                

EFRAG is a private association established in 2001 with the encouragement of the European Commission to serve the public interest. EFRAG extended its mission in 2022 following the new role assigned to EFRAG in the CSRD, providing Technical Advice to the European Commission in the form of fully prepared draft EU Sustainability Reporting Standards and/or draft amendments to these Standards. EFRAG’s mission is to serve the European public interest in both financial reporting and sustainability reporting by developing and promoting European views in the field of corporate reporting and by developing draft EU Sustainability Reporting Standards.  

2. Global Reporting Initiative (GRI)

GRI is the independent, international organization that helps businesses and other organizations take responsibility for their impacts, by providing them with the global common language to communicate those impacts. They provide the world’s most widely used standards for sustainability reporting – the GRI Standards. The GRI Standards help organizations understand their outward impacts on the economy, environment and society, including those on human rights. This increases accountability and enhances transparency on their contribution to sustainable development. The GRI Standards are a modular system consisting of three series of Standards to be used together: Universal Standards, Sector Standards, and Topic Standards.

3. International Financial Reporting Standards (IFRS) 

The IFRS Foundation is a not-for-profit, public interest organization established to develop high-quality, understandable, enforceable, and globally accepted accounting and sustainability disclosure standards – IFRS Standards – and to promote and facilitate adoption of standards. The Standards are developed by two standard-setting boards, the International Accounting Standards Board (IASB), and the newly created International Sustainability Standards Board (ISSB). The IASB sets IFRS Accounting Standards and the ISSB sets IFRS Sustainability Disclosure Standards. IFRS Accounting Standards set out how a company prepares its financial statements. IFRS Sustainability Disclosure Standards set out how a company discloses information about sustainability-related factors that may help or hinder a company in creating value.

4. Sustainability Accounting Standards Board (SASB)

SASB is an independent, not-for-profit organization established in 2011 to set standards for companies to disclose sustainability or ESG information to investors and other providers of financial capital. From inception, SASB’s goal was to establish environmental, social, and governance topics that facilitate communication between companies and investors about financially material, decision-making information. SASB Standards were developed for 77 industries, each of which included disclosure topics and performance metrics for the sustainability risks and opportunities. SASB Standards include disclosure topics and metrics across five dimensions of sustainability: Environment, Social Capital, Human Capital, Business Model and Innovation, and Leadership and Governance.   

5. Greenhouse Gas Protocol (GHG)

The GHG Protocol provides standards, guidance, tools and training for businesses and governments to measure and manage climate-warming emissions. It establishes comprehensive global standardized frameworks to measure and manage greenhouse gas (GHG) emissions from private and public sector operations, value chains, and mitigation actions. The seven standards mentioned are designed to provide a framework for businesses, governments, and other entities to measure and report their greenhouse gas emissions in ways that support their missions and goals: Corporate Standard, GHG Protocol for Cities, Mitigation Goal Standard, Corporate Value Chain (Scope 3) Standard, Policy and Action Standard, Product Standard and Project Protocol.


List of Key Organizations: ESG Frameworks

1. Climate Disclosure Standards Board (CDSB)

CDSB is an international consortium of business and environmental NGOs. They are committed to advancing and aligning the global mainstream corporate reporting model to equate natural capital with financial capital. The CDSB Framework for reporting environmental and social information is designed to help organizations prepare and present environmental and social information in mainstream reports for the benefit of investors. It allows investors to assess the relationship between specific environmental and social matters and the organization’s strategy, performance and prospects.

2. International Integrated Reporting Council (IIRC)

The International Integrated Reporting Council (IIRC) is a global coalition of regulators, investors, companies, standard setters, the accounting profession, academia and not-for-profits created in 2010 to promote integrated thinking and integrated reporting principles, with the view that communication about value creation, preservation, or erosion is the next step in the evolution of corporate reporting. The Council produced the Integrated Reporting Framework on this basis. In 2021, the IIRC merged with SASB to become the Value Reporting Foundation (VRF). In June 2022, the Value Reporting Foundation merged into the IFRS Foundation as part of the ISSB, which is in the process of creating a global set of baseline corporate sustainability disclosure standards.

3. Carbon Disclosure Project (CDP)

CDP is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts. The world’s economy looks to CDP as the gold standard of environmental reporting with the richest and most comprehensive dataset on corporate and city action. It provides transparency to users about greenhouse gas emissions and risks associated with climate change. Companies can also use it to benchmark their performance and efficiency when it comes to greenhouse gas emissions. It is described by some as “the gold standard for understanding how companies manage environmental information and what they report to stakeholders”.

4. Task Force on Climate-related Financial Disclosures (TCFD)

The Financial Stability Board established the Task Force on Climate-related Financial Disclosures (TCFD) in 2015 in the wake of The Paris Agreement at Paris Climate Conference (COP21) and to develop recommendations for more effective climate-related disclosures that could promote more informed investment, credit, and insurance underwriting decisions. In 2017, the TCFD published its recommendations on climate-related financial disclosures, known as the TCFD Framework. The recommendations are structured around four thematic areas that represent core elements of how organizations operate: governance, strategy, risk management, and metrics and targets.

5. EU Taxonomy

The EU taxonomy regulation describes a framework to classify “green” or “sustainable” economic activities executed in the EU. The EU taxonomy regulation creates a clear framework for the concept of sustainability, exactly defining when a company or enterprise is operating sustainably or environmentally friendly. Compared to their competitors, these companies stand out positively and thus should benefit from higher investments. Thereby, the legislation aims to reward and promote environmentally friendly business practices and technologies. The focus lays on the following six environmental objectives:

  1. Climate change mitigation
  2. Climate change adaptation
  3. Sustainable use and protection of water and marine resources
  4. Transition to a circular economy
  5. Pollution prevention and control
  6. Protection and restoration of biodiversity and ecosystems

To be classified as a sustainable economic activity according to the EU taxonomy regulation, a company must not only contribute to at least one environmental objective, but also must not violate the remaining ones.

A sustainability report is a perfect and efficient way for businesses to respond to a wide range of stakeholder queries in a single document. Making a sustainability report can be difficult, as it must adhere to the reporting methodology guidelines and contain the appropriate amount of data for each agenda. Additionally, businesses must choose what ESG data and indicators to report and how to communicate pertinent information. There are no “correct” or “incorrect” sustainability metrics—only those that convince senior management of the need to publish sustainability data and other non-financial information that directly affects the operation of the company. Although, materiality is a critical factor in determining which sustainability metrics are prioritized.

Businesses cannot solve all of the world’s existential threats, but they can have an impact on their own operations and reporting. By clearly, truthfully, and transparently telling their sustainability story, they will build trust, which is essential for achieving long-term value creation.