ESG reporting frameworks set sustainability standards that enable investors to assess a company’s ESG impact. Companies can communicate their ESG initiatives to investors. Meanwhile, investors can use the metrics on the platform to assess the companies’ performance and risks. There are 3 common ESG reporting frameworks:
- Global Reporting Initiative (GRI)
- Task Force on Climate-Related Financial Disclosures (TCFD)
- Sustainability Accounting Standards Board (SASB)
Global Reporting Initiative (GRI)
GRI is a globally renowned, independent standards organization that helps companies communicate their ESG impacts on issues like human rights, corruption, and climate change.
The GRI standards are a set of three standards reporting companies should use together: Universal Standards, Sector Standards, and Topic Standards. Organizations can use GRI standards to create sustainability reports.
Task Force on Climate-Related Disclosures (TCFD)
As the name suggests, TCFD focuses on improving and increasing organizations’ reporting on climate-related financial information. TCFD standards help you to assess climate-related risks in your company, competitors, and suppliers.
You can then use this information to create a strategic ESG plan. Additionally, it allows you to avail necessary information for investors to make financial decisions easily. Your organization can use the framework to disclose climate-related metrics and how it manages climate risks.
Sustainability Accounting Standards Board (SASB)
SASB Standards help organizations disclose financially material sustainability information to investors. The standards focus on subsets of ESG issues related to financial performance in each industry. It covers metrics like GHG emissions, air quality, ecological impact, water and wastewater, energy management, and waste and hazardous materials.