How to Choose the Right ESG Framework and Standards for Your Business

Mar 18

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In today’s rapidly evolving landscape, businesses face increasing pressure to demonstrate transparency on Environmental, Social, and Governance (ESG) issues. With so many frameworks and standards available, how do you choose the right one for your organization?

From global standards such as the GRI to emerging regulations like CSRD, it’s easy to feel overwhelmed. The right ESG framework can be a game-changer, helping you align your strategy with your values, goals, and stakeholder expectations.

In this post, I’m here to guide you through making an informed decision on the best framework or standard for your business. Let’s dive in

Why use an ESG framework?

An ESG framework guides your sustainability reporting efforts and helps you align with regulations, communicate your sustainability efforts effectively, and meet stakeholder expectations.

Key benefits of ESG frameworks

Regulatory preparedness and risk management
Customer preference
Employee engagement
Investor confidence
Ecosystem relations
Innovation & cost reductions

See my previous post about the value of ESG for more information.

ESG frameworks and standards defined

ESG reporting follows two types of guidance:

Frameworks guide how to structure ESG reporting.
Standards define specific reporting metrics.

Whereas frameworks are blueprints to structure information, standards are measurement tools.

Standards can be either voluntary or mandatory, while all well-known frameworks are currently voluntary.

Mandatory standards have been on the rise globally since 2020. The trend towards mandatory standards signifies a shift in regulatory approaches, emphasizing the need for businesses to adapt and align their practices with these requirements to avoid potential legal repercussions. This evolving regulatory environment not only affects compliance strategies but also influences market dynamics, as organizations that proactively adopt mandatory standards may gain a competitive edge in their respective industries.

Examples of ESG frameworks & standards

The 4x4 matrix below presents various examples of commonly utilized frameworks, as well as both voluntary and mandatory standards.

Examples of ESG frameworks and standards

Criteria for selecting ESG frameworks & standards

How do you select the right ESG framework or standard for your business?

The following list of criteria can help:

Regulatory compliance
Alignment with business goals
Industry-specific guidance
Stakeholder expectations
Complexity and resource availability
Scalability and integration

Widely used ESG frameworks

Find examples of the most widely used ESG frameworks in the table below.

Name	Nature	Geography	Best for	Industry specific?
UN SDGs (Sustainable Development Goals)	Voluntary	Global	Companies integrating global sustainability into their strategy	No, general guidelines
TCFD Recommendations (Task Force on Climate-Related Financial Disclosures)	Voluntary	Global	Companies with significant climate exposure	Yes
CDP (Carbon Disclosure Project)	Voluntary	Global	Companies focusing on carbon emissions, water, and deforestation disclosures	Yes
IR (Integrated Reporting)	Voluntary	Global	Companies looking to integrate financial and sustainability reporting	No, general guidelines

Widely used ESG standards

Find examples of the most widely used ESG standards in the table below.

Name	Nature	Geography	Best for	Industry specific?
CSRD (Corporate Sustainability Reporting Directive)	Mandatory	EU and US companies with operations in the EU	Companies operating in the EU	Pending Omnibus proposal
GRI Standards (Global Reporting Initiative)	Voluntary	Global	Companies seeking comprehensive ESG disclosure	Yes
SASB (Sustainability Accounting Standards Board)	Voluntary	Primarily US (used globally)	Investor-focused reporting	Yes
IFRS S1 & S2 (International Financial Reporting Standards)	Voluntary / Emerging regulatory	Global	Companies aligning ESG reporting with global financial markets	S1 - No, general guidance S2 - Yes
GHG Protocol (Greenhouse Gas Protocol)	Voluntary	Global	Companies measuring, managing, and reducing greenhouse gas emissions	Yes

Ready to simplify your ESG reporting?

Facing challenges with ESG reporting? I can help you identify the right ESG frameworks and standards. Let’s connect and simplify your reporting together!

Which ESG framework and/or standards does your company use? Share your thoughts in the comments!

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