a quick guide to ESG frameworks
published 11.17.22
We work with a lot of first-time reporters at qb., and a question we are often asked is ‘which frameworks should I use for my reporting’? Although there is no one-size-fits-all answer to this question, the following considerations are important as clients make this decision.
First, get up to speed on the most widely recognized frameworks and what differentiates each:
GRI Standards
This is the oldest and most established ESG reporting framework, developed through a robust multi-stakeholder process. It is focused on determining and reporting on material topics and takes a double materiality approach to ESG – looking at both the financial impacts to the company and general impacts to a wide range of stakeholders. This framework is informing the upcoming European Sustainability Reporting Standards, developed by EFRAG, which also focus on the concept of double materiality for business and society.
SASB
This framework forms the basis of the global IFRS Sustainability Disclosure Standards, a set of standards expected to begin rollout in 2023, which will provide a global set of financially material sustainability-related disclosures.
TCFD
This reporting framework focuses specifically on reporting financially material climate-related disclosures that are of importance to investors and the financial health of the company.
Although there are other regional and industry standards, and future developments in global, regional and country level disclosure which will begin to come into effect next year, these standards are the current big players in the space.
Then, consider:
Audience and priorities: Who is your audience and what story do you want to tell? If your main audience is US investors, you would focus only on SASB and potentially TCFD. However, if you are also focused on employees, customers, or the public these stakeholders will be more focused on double materiality, and the GRI Standards will provide disclosures that speak to these concerns.
Location and industry: Understand the ESG reporting obligations wherever you do business and comply with existing or upcoming regulations. Understand what reporting is required and best practice for your sector, as well as what peers are reporting on to guide your reporting practice.
Once you have decided what frameworks you select the disclosures you plan to report, and then collect and collate the information. You can then write and publish the information publicly in an ESG report that meets your own and stakeholders needs and guides your ESG strategy and program into the future.
In case you missed it, we had a Fireside with the ESG leads at New Relic where we talked about what it takes to write that first framework-aligned report. If you’d like a copy of the recording, drop us a line.
by Sarah Kempke
Senior Consultant
