In a world where sustainability and corporate responsibility are increasingly important, companies face the challenge of integrating environmental, social and governance (ESG) criteria into their activities. To facilitate this process, independent organizations have developed voluntary reporting frameworks, which, although they do not replace national or European standards, provide a valuable guide for a pragmatic approach to sustainability issues.
Global Reporting Initiative (GRI)
GRI, an international nonprofit organization, provides a widely used global standard for ESG reporting. The GRI standards are structured into three main categories:
- Universal Standards: These introduce the fundamental concepts and provide general guidance applicable to any company wishing to report according to these standards. They cover the profile of the organization, the identification of material issues and the main aspects of impact, such as environmental issues, human rights or relations with suppliers.
- Sectoral Standards: GRI develops standards for 40 sectors, with a particular focus on those with significant environmental impact, such as the oil and natural gas industry, coal, agriculture, aquaculture and fisheries. These standards provide a detailed insight into the characteristics of each sector and the associated impacts.
- Thematic Standards: These focus on specific reporting for each material theme identified through universal standards, such as waste management, energy, biodiversity, emissions, local communities or forced labour.
Task Force on Climate-related Financial Disclosures (TCFD)
Created in 2015, TCFD develops recommendations for companies to understand and communicate the financial risks and opportunities associated with climate change. The TCFD recommendations are structured on four pillars:
- Governance: Description of how sustainability is integrated into management decision-making.
- Strategy: Reporting risks and opportunities, as well as resilience plans in the face of different climate scenarios.
- Risk Management: Disclosure of the process of identifying, assessing and managing climate risks.
- Indicators and Objectives: Description of metrics used to assess climate-related risks and opportunities.
International Sustainability Standards Board (ISSB)
The ISSB, an independent body, is responsible for setting sustainability reporting standards. Recently, ISSB published two important standards:
- IFRS S1: Requires companies to communicate detailed information related to sustainability risks and opportunities, their impact on the business model and strategic plans.
- IFRS S2: Focuses on specific environmental information and illustrates the company’s transition plan to a low-emission business model.
These ESG reporting frameworks are essential tools for companies looking to align with best practices in sustainability and corporate responsibility. They not only help organizations navigate the complexities of ESG issues, but also provide a clear framework for communicating progress to stakeholders, including investors and consumers.
source:
- KPMG, The time has come: The KPMG Survey of Sustainability Reporting 2020
- Consolidated Set of the GRI Standards, 2023
- Recommendations of the Task Force on Climate-related Financial Disclosures, 2017 updated
- IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information, 2023
- IFRS S2 Climate Related Disclosures, 2023