Practical Guidance
Comparison of ESG Reporting Frameworks
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What are voluntary ESG reporting frameworks?
Voluntary reporting frameworks are implemented by companies to help them report on ESG issues. Employing the guidance of a voluntary ESG framework can help determine which issues to disclose, the form that the disclosure takes, and may facilitate the verification of information contained in a company or client’s report.
For most, the determination of an appropriate framework stems from a company’s individual ESG objectives and the desired audience for their disclosure.
Can a company use more than one reporting framework?
Yes, in fact the frameworks themselves heavily emphasized that many, if not all, of the voluntary ESG frameworks may be used cooperatively and in conjunction with one another.
For example, many impact reports from large public companies will be created and verified in alignment with Global Reporting Initiative, but will also include specific sections that reference the Sustainability Accounting Standards Board’s materiality determinations, and also identify several or many of the United Nations Sustainable Development Goals that the company is intending to support through its sustainability activities. The key to selecting an appropriate framework is to align the framework’s purpose with the company’s.
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Comparison table of leading ESG reporting frameworks
The following comparison table is a truncated version. The full comparison table of ESG reporting frameworks is available to Bloomberg Law subscribers here or to download for free here.
| Global Reporting Initiative (GRI) | Sustainability Accounting Standards Board (SASB) | United Nations Global Compact (UNGC) | Task Force on Climate-related Financial Disclosures (TCFD) |
| An international independent standards organization that helps businesses, governments and other organizations understand and communicate their impacts on issues such as climate change, human rights, and corruption. GRI is the most widely used reporting framework, with 82% of the world’s largest 250 corporations reporting in accordance with GRI Standards. |
A sector-based, industry specific guidance framework used primarily to help publicly traded companies determine the financial materiality of sustainability-related information for disclosure to the SEC and the public. | A voluntary initiative based on CEO commitments to implement universal sustainability principles; A way for companies to support and advance the UN’s Sustainable Development Goals, which have been adopted by all UN member states. | A voluntary framework of recommendations on climate-related financial disclosures that are applicable to organizations across sectors and jurisdictions. Organizations can use the recommendations to help them prepare more consistent and comparable disclosures. |
What is the framework’s structure?
| GRI | SASB | UNGC/SDGs | TCFD |
| There are two primary groups: Universal standards and topic-specific standards. The universal standards, also called the “100 Series of the GRI Standards” includes three standards to use in preparing a sustainability report. |
The SASB standards are broken down by industry, making SASB metrics comparable from company to company within an identified peer group. There are 77 identified industries in the SASB Standards, in 11 different Sectors. |
The Global Compact consists of ten principles intended for incorporation into companies’ value systems and business operations. The SDG program provides 17 lofty goals with a 2030 target date for attainment. | The TCFD recommendations are designed to help organizations comply with existing mainstream reporting requirements, rather than impose additional reporting standards. |
[Download the full chart plus more guidance and analysis on ESG risk management.]
Is there a prescribed ESG reporting format?
| GRI | SASB | UNGC/SDGs | TCFD |
| Reports will be company/organization-specific, but will include an “in accordance” designation, meaning the report was written in accordance with GRI Standards. | Sustainability information and performance metrics that are “financially material” should be incorporated into a reporting company’s scheduled SEC disclosures and in that company’s sustainability, impact, CSR, or ESG report. | Communication on Progress (CoP): The CoP is an annual reporting requirement wherein companies set out key information regarding their Global Compact-driven activities. | Organizations are encouraged to disclose material climate-related issues in their mainstream financial filings, whether with the SEC, other regulatory agencies, or ESG/sustainability reports. |
Do the ESG reporting frameworks require a materiality assessment?
| GRI | SASB | UNGC/SDGs | TCFD |
| YES – GRI requires an organization to identify material topics in order to establish the scope and included issues covered by a company’s report. GRI’s framework contemplates that materiality may have a different meaning for different stakeholders. Therefore, material topics are those that may reasonably be considered important for reflecting the organization’s economic, environmental, and social impacts, or influencing the decisions of stakeholders. |
YES – SASB is intended to identify financially material sustainability information. Materiality under the SASB framework is determined exclusively through the lens of the “reasonable investor,” the definition of which has been established by the courts. |
NO – The UNGC and SDGs are not intended to be used to narrowly identify specific material information, but rather as goal-oriented guideposts for companies seeking to attain the SDGs themselves. |
YES – The task force recommends that organizations assess materiality for climate-related in the same way they determine the materiality of other information included in their financial filings. |
[Download the full chart plus more guidance and analysis on ESG risk management.]