ESG reporting is essential to understanding and integrating ESG considerations into investment decisions. Disclosing ESG data provides greater transparency and accountability by supporting companies in setting goals on environmental, social and governance issues and tracking their progress against both objective industry benchmarks and their own year-on-year targets. As ESG has become an increasingly popular and mainstream investment strategy, the demand for credible, relevant ESG data has grown, and along with it, the need for reporting frameworks that can measure corporate adherence to sustainability standards and communicate this information to stakeholders.

ESG reporting standards and frameworks are crucial to providing investors with consistent, comparable and decision-useful ESG information. One of the most significant issues in ESG reporting has been that information disclosed is often not comparable between companies, largely due to the proliferation of reporting frameworks, each with their own focus, targets and audience, and lack of standardization within the field. It is common for companies to use multiple standards and frameworks for their ESG reports and to use different accounting methodologies, metrics, measurement units, and report formats. However, in recent years, we have seen the consolidation of several large ESG reporting frameworks, and agreements among other frameworks to work together to coordinate their activities. Greater cooperation and alignment among standard-setting organizations will be an important step in streamlining the fragmented reporting landscape and providing greater clarity to investors, employees, customers and other stakeholders.

Evolution of ESG Reporting Frameworks

Below is an interactive diagram showing the evolution of ESG frameworks and how they have consolidated over time. Hover over the info icons () for a brief description of each framework. Further information on the frameworks can be found in the tables below the diagram.

Looking for information on ESG and sustainability regulations? The UN PRI has compiled a comprehensive, publicly available database on their website documenting existing and in progress sustainable finance policies around the world.

Explore the Reporting Frameworks

Click on the tabs below to learn more about the ESG reporting frameworks, including recent updates.

Carbon Disclosure Project (CDP)

Year Established

2000

Industry

Select industries

Audience

Investors, companies, government agencies, cities, states and regions

AUM/ Number of signatories/supporters

Over 13,000 companies worth over 64% of global market capitalization, disclosed data through CDP on climate change, water security and deforestation in 2021

Description

Purpose:
CDP is a framework for companies to provide environmental information to their stakeholders (investors, employees, and customers) covering governance and policy, risks and opportunity management, environmental targets and strategy, and scenario analysis.

How CDP works:
CDP currently offers three questionnaires (Climate Change, Water, and Forests). Each of these is scored using different methodologies. Each questionnaire includes general questions alongside sector-specific questions aimed at high-impact sectors. The scoring of CDP’s questionnaires is conducted by accredited scoring partners trained by CDP. CDP scores companies and cities on their disclosure from D, C, B-, B, A-, A and F for failure to respond.

Single or Double Materiality

Double

Alignment with other frameworks and regulations

CDP’s disclosure platform provides the mechanism for reporting in line with the TCFD recommendations. [source]

Updates

September 2020: Five leading framework producers (CDP, CDSB, GRI, IIRC, and SASB) released a “Statement of Intent to Work Together Towards Comprehensive Corporate Reporting.” This group will be collaborating on an ongoing basis to make their frameworks more complementary and interoperable. [source]

March 2022: CDP and The Monetary Authority of Singapore (MAS) signed a Memorandum of Understanding (MOU) to promote sustainability disclosures and access to quality ESG data across the financial sector and real economy. To enable financial institutions and corporates to better measure and monitor their ESG performance and impact, MAS and CDP will collaborate to: (1) explore the exchange of information between CDP’s disclosure system and MAS’s Project Greenprint (a technology and data platform for high-quality ESG data) to enhance financial institutions’ access to ESG data; and (2) implement capacity building programs for corporates and financial institutions on climate disclosures. [source]

April 2022: CDP and ICLEI launch revamped questionnaire on world's leading city climate reporting platform. The new questionnaire refines the data collection process to focus on key criteria on climate change mitigation and adaptation, and tracks progress in areas such as science-based targets and investment (to provide greater insights into the finance gap facing cities). [source]

Visit CDP website
Climate Disclosure Standards Board (CDSB)

Year Established

2007

Industry

Industry-agnostic

Audience

Corporates and investors

AUM/ Number of signatories/supporters

374 companies across 32 countries are currently using the CDSB Frameworks. CDSB Frameworks are currently referenced in 7 stock exchanges across the world, covering all continents.

Description

Purpose:
The CDSB is an international consortium of business and environmental NGOs offering a “framework for reporting environmental information with the same rigor as financial information.”

How CDSB works:
The CDSB Framework sets out a number of reporting requirements. The requirements tell an organization what and how to report in terms of environmental information in mainstream reports. The requirements draw on existing frameworks, standards, laws, etc. and on CDSB's input where there are gaps in existing provisions.

Single or Double Materiality

Single

Alignment with other frameworks and regulations

Aligns with the recommendations of the TCFD and builds on the most widely used reporting approaches, such as CDP, GRI, SASB and IFRS. [source]

Updates

November 2021: The IFRS Foundation Trustees (Trustees) announced the formation of a new International Sustainability Standards Board (ISSB) to develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs. The ISSB will be consolidated with the Climate Disclosure Standards Board (CDSB—an initiative of CDP) and the Value Reporting Foundation by June 2022. [source]

November 2021: CDSB launched a new Biodiversity application guidance to assist companies in the disclosure of material information about the risks and opportunities that biodiversity presents to an organization's strategy, financial performance and condition within the mainstream report (biodiversity-related financial disclosure). It is designed to supplement the CDSB Framework for reporting environmental and climate change information to investors. [source]

January 2022: IFRS Foundation completed consolidation of CDSB from CDP. [source]

Visit CDSB website
Global ESG Benchmark for Real Assets (GRESB)

Year Established

2009

Industry

Real estate

Audience

Real asset investors

AUM/ Number of signatories/supporters

GRESB data covers US $5.3 trillion in real estate and infrastructure value and is used by more than 100 institutional and financial investors

Description

Purpose:
GRESB is a global tool used predominately by investors to assess the sustainability performance of real estate and infrastructure portfolios and assets worldwide.

How GRESB works:
GRESB Assessments provide investors and asset managers with material insights into the sustainability performance of a company’s real assets.

Assessment participants receive comparative business intelligence on where they stand against their peers, a roadmap with the actions they can take to improve their ESG performance and a communication platform to engage with investors. Investors use the ESG data and GRESB’s analytical tools to improve the sustainability performance of their investment portfolios, engage with managers and prepare for increasingly rigorous ESG obligations.

Single or Double Materiality

Single

Alignment with other frameworks and regulations

GRESB insights are aligned with Global Reporting Initiative (GRI).

Sustainability Accounting Standards Board (SASB) based its real estate sector standard on the GRESB real estate assessment.

GRESB is a PRI service provider signatory, holds quarterly meetings with PRI staff and makes submissions on relevant consultation aspects.

In early 2022, GRESB will provide a TCFD alignment report based on the existing GRESB Assessment data. [source]

Updates

March 2022: GRESB is developing a TCFD reporting tool to help companies simplify their TCFD disclosure efforts using data from GRESB Assessments. Product demos took place in March 2022. [source]

April 2022: A group of 16 investors representing US $19 trillion have launched a round of coordinated engagements to strengthen dialogue on ESG performance and GRESB participation with real estate companies across 12 key markets in the APAC region. The work is undertaken in close collaboration with GRESB, a global ESG benchmark for real estate portfolios. [source]

2022: GRESB launched an SFDR assessment tool, which will allow real estate participants to prepare SFDR reports using the GRESB Portal. [source]

Visit GRESB website
Global Reporting Initiative (GRI)

Year Established

1997

Industry

Industry-agnostic

Audience

Corporates, governments, NGOs, and industry groups

AUM/ Number of signatories/supporters

Over 500 organizations from over 70 countries are part of the GRI Community

Description

Purpose:
GRI is a globally applicable guidance framework that provides standards (the GRI Standards) that detail approaches to materiality, management reporting and disclosure for a comprehensive range of sustainability issues.

How GRI works:
GRI Standards are designed primarily to be used as a set, to prepare a sustainability report focused on material topics. The three universal Standards are used by every organization that reports under the GRI framework. An organization also chooses from the topic-specific Standards to report on its material topics – economic, environmental or social.

Single or Double Materiality

Single

Alignment with other frameworks and regulations

In July 2020, SASB and GRI announced a collaborative workplan to show how companies can use both sets of standards together. [source]

Updates

November 2021: The GRI Professional Certification Program introduced new courses ensuring sustainability reporters continue to stay up-to-date with the ever-changing landscape of sustainability reporting. This is the first update since the Program launched in September 2020. [source]

March 2022: GRI launched new standard to address sustainability challenges facing coal companies. [source]

March 2022: GRI backed sustainability credentials of the proposed UN Convention on Tax. The Convention on Tax is aligned with the reporting requirements in GRI’s Tax Standard. The draft UN Tax Convention, which has been led by the Global Alliance for Tax Justice and Eurodad, has an objective to ensure tax systems are transparent, equitable and effective. It includes an explicit focus on the role of taxes in safeguarding human rights, environmental protection, and supporting the Sustainable Development Goals. [source]

March 2022: The IFRS Foundation and Global Reporting Initiative (GRI) announced a collaboration agreement under which their respective standard-setting boards, the International Sustainability Standards Board (ISSB) and the Global Sustainability Standards Board (GSSB), will seek to coordinate their work programs and standard-setting activities. [source]

June 2022: GRI launched Agriculture, Aquaculture and Fishing Sector Standard. [source]

Visit GRI website
International Financial Reporting Standards (IFRS) Foundation

Year Established

1973

Industry

Industry-agnostic

Audience

Corporates, investors and exchanges

AUM/ Number of signatories/supporters

Research shows that 144 jurisdictions now require the use of IFRS Standards for all or most publicly listed companies, while a further 12 jurisdictions permit its use.

Description

The IFRS Foundation was established to develop a single set of high-quality, understandable, enforceable and globally accepted accounting and sustainability disclosure standards—IFRS Standards—and to promote and facilitate adoption of the standards.

Single or Double Materiality

Single

Alignment with other frameworks and regulations

November 2021: The IFRS Foundation Trustees (Trustees) announced three significant developments to provide the global financial markets with high-quality disclosures on climate and other sustainability issues:

+The formation of a new International Sustainability Standards Board (ISSB) to develop—in the public interest—a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs;

+A commitment by leading investor-focused sustainability disclosure organizations to consolidate into the new board. The IFRS Foundation will complete consolidation of the Climate Disclosure Standards Board (CDSB—an initiative of CDP) and the Value Reporting Foundation (VRF—which houses the Integrated Reporting Framework and the SASB Standards) by June 2022;

+The publication of prototype climate and general disclosure requirements developed by the Technical Readiness Working Group (TRWG), a group formed by the IFRS Foundation Trustees to undertake preparatory work for the ISSB. These prototypes are the result of six months of joint work by representatives of the CDSB, the International Accounting Standards Board (IASB), the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD), the VRF and the World Economic Forum (Forum), supported by the International Organization of Securities Commissions (IOSCO) and its Technical Expert Group of securities regulators. The TRWG has consolidated key aspects of these organizations' content into an enhanced, unified set of recommendations for consideration by the ISSB. [source]

Updates

March 2022: The IFRS Foundation and Global Reporting Initiative (GRI) announced a collaboration agreement under which their respective standard-setting boards, the International Sustainability Standards Board (ISSB) and the Global Sustainability Standards Board (GSSB), will seek to coordinate their work programs and standard-setting activities. [source]

August 2022: The IFRS Foundation announced the completion of the consolidation of the Value Reporting Foundation (VRF) into the IFRS Foundation. [source]

Visit IFRS website
International Integrated Reporting Council (IIRC)

Year Established

2010

Industry

Industry-agnostic

Audience

Investors & corporates

AUM/ Number of signatories/supporters

258 institutional investors—representing $76T AUM and 23 countries—support SASB and/or use SASB Standards to inform their investment decision-making

Description

Created by a global coalition of regulators, investors, companies, and NGOs, the IIRC's Framework provides principles and concepts for better reporting of strategy, performance, and governance focused on value creation.

Purpose:
Facilitate disclosure of financially material, decision-impacting sustainability information in SEC filings

How SASB + IIRC work:
In June 2021, The Value Reporting Foundation was formed via the merger of SASB and IIRC, in an effort to build a more coherent reporting system. The VRF is an ESG guidance framework that sets standards for the disclosure of financially material sustainability information by companies to their investors.  The resources they provide include the Integrated Thinking Principles, the Integrated Reporting Framework, and SASB Standards. In total, the SASB Standards track ESG issues and performance across 77 industry standards. 

Single or Double Materiality

Single

Alignment with other frameworks and regulations

In July 2020, SASB and GRI announced a collaborative workplan to show how companies can use both sets of standards together. [source]

SASB Standards can provide an industry-specific set of climate-related disclosure topics and associated metrics to help a company more effectively implement TCFD disclosure. [source]

Updates

June 2021: The merger between SASB and IIRC was formalized. [source]

November 2021: The IFRS Foundation Trustees (Trustees) announced the formation of a new International Sustainability Standards Board (ISSB) to develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs. The ISSB will be consolidated with the Climate Disclosure Standards Board (CDSB—an initiative of CDP) and the Value Reporting Foundation by June 2022. [source]

December 2021: The Value Reporting Foundation announced the publication of the new Integrated Thinking Principles, which provide a structured approach for considering how to create the right environment within an organization, as well as for reviewing what can, at times, go wrong. [source]

December 2021: SASB revised its Standards for three industries: the Metals & Mining; Coal Operations; and Asset Management & Custody Activities industries. These revisions expand the disclosures topics included in two of the industries (Metals & Mining and Coal Operations) and narrow the disclosure topics included in the third (Asset Management & Custody Activities). [source]

March 2022: SASB Board prepares to issue updated standards to address Raw Materials Sourcing in Apparel, Plastics Risks and Opportunities in Chemicals Industry, and Content Governance in Internet Media & Services Industry projects. [source]

Visit IIRC website
 International Sustainability Standards Board (ISSB)

Year Established

2021

Industry

Industry-agnostic

Audience

Corporates, investors and exchanges

AUM/ Number of signatories/supporters

-

Description

Purpose:
ISSB is an independent, private-sector body that develops and approves IFRS Sustainability Disclosure Standards (IFRS SDS). The ISSB operates under the oversight of the IFRS Foundation.

How ISSB works:
Under the IFRS Foundation Constitution, the ISSB has complete responsibility for all sustainability-related technical matters of the IFRS Foundation including:
- Full discretion in developing and pursuing its technical agenda, subject to certain consultation requirements with the Trustees and the public
- The preparation and issuing of SDSs and exposure drafts, following the due process stipulated in the Constitution.

Single or Double Materiality

Single

Alignment with other frameworks and regulations

March 2022: The IFRS Foundation and Global Reporting Initiative (GRI) have announced today a collaboration agreement under which their respective standard-setting boards, the International Sustainability Standards Board (ISSB) and the Global Sustainability Standards Board (GSSB), will seek to coordinate their work programs and standard-setting activities. [source]

Updates

April 2022: The International Sustainability Standards Board (ISSB) announced the formation of a working group of jurisdictional representatives to establish dialogue for enhanced compatibility between the ISSB’s exposure drafts and ongoing jurisdictional initiatives on sustainability disclosures. Members of the working group are the Chinese Ministry of Finance, the European Commission, the European Financial Reporting Advisory Group, the Japanese Financial Services Authority, the Sustainability Standards Board of Japan Preparation Committee, the United Kingdom Financial Conduct Authority and the US Securities and Exchange Commission. [source]

Visit ISSB website
UN Principles for Responsible Investment (PRI)

Year Established

2005

Industry

Financial sector

Audience

Investors

AUM/ Number of signatories/supporters

The collective AUM represented by PRI signatories is US$86.3 trillion to US$103.4 trillion as of 31 March 2020, representing 3,038 signatories

Description

Purpose:
The PRI is the world's leading proponent of responsible investment. It works to understand the investment implications of environmental, social and governance (ESG) factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions.

How PRI works:
PRI has topic-specific questions within the questionnaire relating to investment impacts. The Reporting Framework comprises 13 modules. There are general modules for all signatories and asset-class specific ones. The modules are split between "direct" and "indirect." The modules include:

Mandatory Modules:
(1) Senior Leadership Statement;
(2) Organizational overview;
(3) Investment and Stewardship Policy (including climate indicators)

Mandatory for organizations that invest in the asset class and meet the AUM threshold:
(1) Manager selection, appointment and monitoring;
(2) Asset-specific Modules: Listed Equity, Real Estate, Private Equity, Fixed Income, Infrastructure, Hedge Funds

Voluntary:
(1) Sustainability Outcomes

Single or Double Materiality

Single

Alignment with other frameworks and regulations

SASB framework could be used as a starting point for investment due diligence. [source]

Since 2020, PRI signatories have been required to report to the PRI on several indicators regarding their management of risks and opportunities related to climate change. These indicators are modeled on the disclosure framework of the Financial Stability Board’s Task Force on Climate-related Disclosures (TCFD). [source]

Updates

September 2021: The European Leveraged Finance Association (ELFA) and the PRI launched their third set of sector-specific guidance on ESG disclosures for sub-investment grade corporate borrowers. The latest ESG Fact Sheets outlines the most important areas of ESG disclosure for the Transport and Healthcare sectors. The ESG Fact Sheets are designed to support borrowers when preparing ESG disclosure, and to facilitate engagement between investors and the companies to which they lend on important ESG topics. [source]

February 2022: The PRI is inviting signatories to join its Corporate Reporting Reference Group. The overall aim is to encourage and support standard setters, regulators and practitioners in their efforts to harmonize corporate ESG reporting on ESG risks and opportunities and the sustainability performance of corporate entities. [source]

March 2022: The Alternative Credit Council (ACC), the Loan Syndications and Trading Association (LSTA) and the Principles for Responsible Investment (PRI) are joining forces to align lenders and private equity sponsors to support material and consistent ESG data disclosure within the credit markets. [source]

Visit PRI website
Sustainability Accounting Standards Board (SASB)

Year Established

2011

Industry

Select industries (77 in total)

Audience

Investors & corporates

AUM/ Number of signatories/supporters

258 institutional investors—representing $76T AUM and 23 countries—support SASB and/or use SASB Standards to inform their investment decision-making

Description

SASB Standards guide the disclosure of financially material sustainability information by companies to their investors. The Standards identify the subset of environmental, social, and governance (ESG) issues most relevant to financial performance in each industry.

Purpose:
Facilitate disclosure of financially material, decision-impacting sustainability information in SEC filings

How SASB + IIRC work:
In June 2021, The Value Reporting Foundation was formed via the merger of SASB and IIRC, in an effort to build a more coherent reporting system. The VRF is an ESG guidance framework that sets standards for the disclosure of financially material sustainability information by companies to their investors.  The resources they provide include the Integrated Thinking Principles, the Integrated Reporting Framework, and SASB Standards. In total, the SASB Standards track ESG issues and performance across 77 industry standards. 

Single or Double Materiality

Single

Alignment with other frameworks and regulations

In July 2020, SASB and GRI announced a collaborative workplan to show how companies can use both sets of standards together. [source]

SASB Standards can provide an industry-specific set of climate-related disclosure topics and associated metrics to help a company more effectively implement TCFD disclosure. [source]

SASB Standards & Other ESG Frameworks

Updates

June 2021: The merger between SASB and IIRC was formalized. [source]

November 2021: The IFRS Foundation Trustees (Trustees) announced the formation of a new International Sustainability Standards Board (ISSB) to develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs. The ISSB will be consolidated with the Climate Disclosure Standards Board (CDSB—an initiative of CDP) and the Value Reporting Foundation by June 2022. [source]

December 2021: The Value Reporting Foundation announced the publication of the new Integrated Thinking Principles, which provide a structured approach for considering how to create the right environment within an organization, as well as for reviewing what can, at times, go wrong. [source]

December 2021: SASB revised its Standards for three industries: the Metals & Mining; Coal Operations; and Asset Management & Custody Activities industries. These revisions expand the disclosures topics included in two of the industries (Metals & Mining and Coal Operations) and narrow the disclosure topics included in the third (Asset Management & Custody Activities). [source]

March 2022: SASB Board prepares to issue updated standards to address Raw Materials Sourcing in Apparel, Plastics Risks and Opportunities in Chemicals Industry, and Content Governance in Internet Media & Services Industry projects. [source]

Visit SASB website
Science Based Targets initiative (SBTi)

Year Established

2015

Industry

Industry-agnostic

Audience

Corporates and investors

AUM/ Number of signatories/supporters

1,045 companies representing more than $23 trillion in market capitalization

Description

Purpose:
The Science Based Targets initiative (SBTi) is a partnership between CDP, the United Nations Global Compact (UNGC), World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). It is focused on mitigating climate change by enabling companies to set science-based emissions reduction targets.

How SBTi works:
Science-based targets provide a clearly-defined pathway for companies to reduce greenhouse gas (GHG) emissions, helping prevent the worst impacts of climate change and future-proof business growth. Targets are considered ‘science-based’ if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement – limiting global warming to well below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C.

Setting a science-based target is a five-step process:

(1) Commit: submit a letter establishing your intent to set a science-based target
(2) Develop: work on an emissions reduction target in line with the SBTi’s criteria
(3) Submit: present your target to the SBTi for official validation
(4) Communicate: announce your target and inform your stakeholders
(5) Disclose: report company-wide emissions and track target progress annually

Single or Double Materiality

Double

Alignment with other frameworks and regulations

SBTs enable companies to meet the requirements of the Metrics and Targets area of the TCFD recommendations. [source]

Updates

July 2021: The SBTi unveiled a new strategy to increase minimum ambition in corporate target setting from ‘well below 2°C’ to ‘1.5°C' above pre-industrial levels. [source]

November 2021: SBTi released its Net-Zero Foundations for Financial Institutions Draft for public consultation. This marks the start of the SBTi net-zero finance standard development process. This standard is needed for financial institutions to ensure that they use their unique ability and influence to finance effective climate transition activities in the real economy. [source]

September 2022: SBTi announced the launch of the Forest, Land and Agriculture (FLAG) Science Based Target Setting Guidance, the world’s first Standard for companies in land-intensive sectors such as food, agriculture and forestry, to set science-based targets that include land-based emissions reductions and removals. [source]

Visit SBTi website
Task Force on Climate-Related Financial Disclosures (TCFD)

Year Established

2015

Industry

Select industries

Audience

Investors, banks, insurance companies, corporates, regulators and stock exchanges

AUM/ Number of signatories/supporters

>2600 supporters globally, including 1,069 financial institutions, responsible for assets of $194 trillion. TCFD supporters now span 89 countries, $25 tn Combined Company Market Capitalization and 120 regulators and government entities.

Description

Purpose:
The Financial Stability Board (FSB) created the TCFD to develop recommendations on the types of information that companies should disclose to support investors, lenders, and insurance underwriters in appropriately assessing and pricing risks related to climate change. 

How TCFD works:
TCFD is structured under four thematic areas (or recommendations), around which companies operate - Governance, Strategy, Risk Management, and Metrics & Targets. These thematic areas are supported by 11 specific recommended disclosures that companies can include in their financial filings or other disclosure documents to help investors and other stakeholders understand how reporting organizations think about and assess climate-related risks and opportunities. TCFD is intended to accompany a chosen framework, not replace it. TCFD addresses disclosure.

Single or Double Materiality

Single

Alignment with other frameworks and regulations

See below

Updates

September 2020: New Zealand - New Zealand announced that it will implement mandatory climate risk reporting in line with the TCFD recommendations, becoming the first country to do so. [source]

April 2021: Australia - the Australian Prudential Regulation Authority (APRA) released a draft guidance for banks, insurers and pension funds on managing and disclosing climate-related risks, including physical, transition and liability exposures. The guidance is aligned with the TCFD. [source]

May 2021: Norway - The Norwegian Finance Ministry, the Nordic CEOs for a Sustainable Future, and the Oslo Stock Exchange declared their support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). [source]

June 2021: G7 countries endorsed mandatory disclosures for companies, following recommendations by the TCFD. [source]

August 2021: Switzerland - From 2024, large Swiss firms will be legally bound to report on their climate-related risks, in line with TCFD regulations. [source]

October 2021: UK - UK became the first G20 country to make it mandatory for Britain’s largest businesses to disclose their climate-related risks and opportunities, in line with the TCFD recommendations. The rule is set to come into force from April 2022 and will be mandatory by 2025. [source]

March 2022: US - The Securities and Exchange Commission (SEC) proposed rules that would require public companies to disclose extensive climate-related information in their SEC filings. The proposed disclosure framework is modeled in part on the voluntary framework and recommendations from the Task Force for Climate-Related Financial Disclosures (TCFD) and draws upon the Greenhouse Gas Protocol. [source]

Visit TCFD website
Taskforce on Nature-related Financial Disclosures (TNFD)

Year Established

2021

Industry

Industry-agnostic

Audience

Investors, banks, insurance companies, corporates, regulators and stock exchanges

AUM/ Number of signatories/supporters

The TNFD 75-strong Informal Working Group (IWG) represents some of the world’s biggest banks, investors and companies with an AUM value of over US$ 8.5 trillion, as well as governments and regulatory bodies.

Description

Purpose:
To develop and deliver a risk management and disclosure framework for organizations to report and act on evolving nature-related risks, with the ultimate aim of supporting a shift in global financial flows away from nature-negative outcomes and toward nature-positive outcomes.

How TNFD works:
The TNFD is reusing the framework that was developed for TCFD and adapting it to nature-related risks. The framework is structured around how organizations operate: governance, strategy, risk management, metrics and targets. However, in recognition of the particular challenges of measuring nature, broader policy and market developments, and the systemic nature of the risk, the TNFD will incorporate a broader definition of the term “risks and opportunities” into each pillar.

The draft recommendations also include four general requirements that disclosures should be based on: (1) assessment of nature-related dependencies and nature impacts; (2) consideration of location; (3) consideration of capabilities for nature-related risk and opportunity assessment and management; (4) and a statement of the scope of disclosures and what will be covered in future disclosures.

The TNFD will both feed into standards bodies such as ISSB and EFRAG and build upon the work of standards bodies to develop an integrated risk management and disclosure framework that draws from existing initiatives and standards already in the market or under development by others, that are relevant to the scope and mission of the TNFD.

Single or Double Materiality

Double

Alignment with other frameworks and regulations

The TNFD beta framework is also designed for future alignment with the global baseline for sustainability standards under development by the International Sustainability Standards Board (ISSB). [source]

Updates

October 2021: TNFD’s 33 Taskforce Members kicked off work with first Plenary meeting followed by the launch of the Development Finance Hub. [source]

October 2021: The G20 Sustainable Finance Roadmap endorsed TNFD and encouraged advancing nature-related disclosures. [source]

March 2022: TNFD released the first beta version of the framework for market consultation. [source]

June 2022: TNFD 2nd Beta Framework was released and includes the initial guidance on metrics. [source]

Visit TNFD website
World Economic Forum (WEF) Measuring Stakeholder Capitalism Initiative

Year Established

2019

Industry

Industry-agnostic

Audience

Corporates, investors, regulators, standard-setters

AUM/ Number of signatories/supporters

Over 50 companies are now including the Stakeholder Capitalism Metrics in their reporting materials.

Description

Purpose:
The purpose of this initiative is to enable IBC companies (International Business Council of the World Economic Forum) – as well as non-IBC companies – to begin reporting in a consistent and more comparable way on key dimensions of sustainable value. In so doing, the IBC hopes to catalyze faster progress towards the creation of a more formal, systemic solution, such as a generally accepted set of international accounting standards for material ESG and longer-term value considerations.

How the MSCI works:
The initiative identified a set of universal metrics and disclosures, deliberately drawn from existing standards: a set of 21 core and 34 expanded metrics. These metrics and disclosures focus on four themes: Principles of Governance, Planet, People and Prosperity and reflect a six-month consultation process with more than 200 companies, investors and other interested parties.

Single or Double Materiality

Double/Dynamic Materiality

Alignment with other frameworks and regulations

Several metrics in line with SASB, GRI, CDSB, TCFD and SBTi. [source]

Updates

January 2021: Over 60 business leaders, including members of the World Economic Forum and its International Business Council (IBC), have committed to the core Stakeholder Capitalism Metrics released by the IBC. [source]

Visit WEF Stakeholder Capitalism website
Developed in collaboration with:
This ESG Reporting Frameworks tracker has been co-developed with KKS Advisors to show the effort towards standardization in ESG reporting. As this is a rapidly evolving space, the tracker will be updated on a regular basis. If you have any recommendations regarding expanding the tracker, please get in touch with us through our contact page.