ESG Reporting

ESG Reporting Frameworks

As Peter Drucker, the father of modern management, said: “you can’t improve what you don’t measure.”  Yet, how to measure and report on corporate environmental (and other ESG) impacts is one of the biggest challenges in the ESG space. This page (which is current as of June 1, 2022) will try to help answer this question by providing high level overview of the state of ESG reporting, as well as a “Cliff’s notes” summary of certain key frameworks (along with links to where you can get more detailed information).

A more detailed discussion of these frameworks can be found in the following Finpublica Primer and Presentation.

A High Level Overview of ESG Reporting

Most of the ESG reporting frameworks that exist today are voluntary.  A number of organizations have put significant time and effort into crafting comprehensive ESG reporting frameworks – especially regarding environmental issues.  These have historically included (among others):

1. GRI: The Global Reporting Initiative

2. IIRC: The International Integrated Reporting Council

3. SASB: Sustainability Accounting Standards Board

4. CDP: The Carbon Disclosure Project

5. GHG Protocol: The Greenhouse Gas Protocol

6. CDSB: The Climate Disclosure Standards Board

7. TCFD: The Task Force on Climate Related Financial Disclosure

8. WEF: The World Economic Forum Stakeholder Capitalism Metrics

9. SBTi: The Science Based Targets Initiative

Recent Trends Toward Consolidation

In September 2020, the first five of the above frameworks (the GRI, IIRC, SASB, CDP,  and CDSB) announced a shared vision for comprehensive reporting that would include sustainability disclosures and financial accounting, linked through integrated reporting.  And, in December 2020, this “group of five” published a prototype climate-related financial disclosure standard to illustrate how their five standards could be used together.   

Since then, there has been even more coordination, and even consolidation, within the ESG reporting space.   In June 2021, the IIRC and the SASB merged into the Value Reporting Foundation (VRF).  And, in perhaps one of the most major recent developments, in November of 2021, an organization called the International Financial Reporting Standards Foundation (IFRS) announced that they would be developing a new standard-setting board:  The International Sustainability Standards Board (ISSB).  The new ISSB intends to consolidate the newly formed VRF with the CDSB by mid-2022.

Even once the ISSB completes its consolidation of the VRF and the ISSB, the creation of the new reporting standards will take time.  Still, the ISSB has previewed that it plans to build its new standards on existing frameworks and guidance – including:  (1) the CDSB Framework (2) the former IIRC’s Integrated Reporting Framework, (3) the SASB Standards, (4) the TCFD Recommendations, and (5) the WEF Stakeholder Capitalism Metrics.  Until the new standards are completed, the ISSB has recommended that companies continue using these voluntary frameworks and guidance as appropriate.

Key Reporting Frameworks

Below are links to discussions of nine of the most important voluntary sustainable reporting frameworks (pre-development of the consolidated ISSB standards). Those five upon which the new ISSB standards will be built, as well as the new ISSB standards themselves, are listed in green.