Key ESG Reporting Standards to Know for Investor Relations

ESG reporting standards are essential for companies to communicate their sustainability efforts to investors. These frameworks enhance transparency, accountability, and stakeholder engagement, helping investors make informed decisions based on environmental, social, and governance factors that impact financial performance.

1. Global Reporting Initiative (GRI) Standards

   • Provides a comprehensive framework for sustainability reporting, focusing on economic, environmental, and social impacts.
   • Encourages transparency and accountability by standardizing disclosures across various sectors.
   • Aims to enhance stakeholder engagement by addressing the information needs of investors, customers, and communities.

2. Sustainability Accounting Standards Board (SASB) Standards

   • Develops industry-specific standards for disclosing financially material sustainability information to investors.
   • Focuses on the intersection of sustainability and financial performance, helping companies communicate relevant ESG factors.
   • Aims to improve the comparability and reliability of sustainability disclosures across industries.

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

   • Provides guidance for companies to disclose climate-related financial risks and opportunities.
   • Encourages organizations to integrate climate considerations into their governance, strategy, and risk management processes.
   • Aims to enhance transparency and inform investors about the potential impacts of climate change on financial performance.

4. CDP (formerly Carbon Disclosure Project)

   • A global platform for companies to disclose their environmental impacts, particularly related to climate change, water, and forests.
   • Provides a standardized framework for measuring and managing environmental risks and opportunities.
   • Facilitates investor access to environmental data, promoting informed decision-making.

5. United Nations Sustainable Development Goals (UN SDGs)

   • A set of 17 global goals aimed at addressing social, economic, and environmental challenges by 2030.
   • Encourages businesses to align their strategies with sustainable development objectives, enhancing their long-term viability.
   • Provides a framework for measuring and reporting contributions to global sustainability efforts.

6. International Integrated Reporting Council (IIRC) Framework

   • Promotes integrated reporting that combines financial and non-financial information to provide a holistic view of an organization's performance.
   • Encourages companies to communicate how they create value over time, considering various capitals (financial, manufactured, intellectual, human, social, and natural).
   • Aims to improve the quality of information available to investors and other stakeholders.

7. EU Non-Financial Reporting Directive (NFRD)

   • Requires large public-interest companies to disclose non-financial information related to environmental, social, and governance matters.
   • Aims to enhance transparency and accountability in corporate reporting across the European Union.
   • Encourages companies to consider the impact of their operations on society and the environment.

8. Principles for Responsible Investment (PRI)

   • A global initiative encouraging investors to incorporate ESG factors into their investment decision-making processes.
   • Aims to promote sustainable financial markets and encourage responsible corporate behavior.
   • Provides a framework for investors to engage with companies on ESG issues and improve reporting practices.

9. ISO 26000 Social Responsibility Standard

   • Offers guidance on social responsibility for organizations, covering a wide range of sustainability issues.
   • Encourages organizations to operate ethically and transparently, considering the interests of stakeholders.
   • Aims to enhance the credibility of sustainability efforts and improve stakeholder trust.

10. Climate Disclosure Standards Board (CDSB) Framework

    • Provides a framework for companies to disclose climate-related information in mainstream financial reports.
    • Aims to enhance the integration of climate change into corporate reporting and decision-making.
    • Encourages consistency and comparability in climate-related disclosures, supporting informed investment decisions.