‍Confused by all the different ESG reporting frameworks? Here's a breakdown of some of the most common ones, in plain English:

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• Global Reporting Initiative (GRI): This is a comprehensive framework that covers a company's impact on the environment, society, and the economy. It's a good starting point for most businesses.
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• International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards (ISSB): This is a relatively new standard that builds on existing frameworks like SASB and CDSB. It emphasises the financial importance (materiality) of sustainability risks.
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• Countries actively considering adoption of IFRS S1 / S2 standards include:‍
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  • Australia: The Commonwealth Treasury is working on implementing mandatory climate-related financial disclosure requirements, which are expected to be aligned with the ISSB standards.‍
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  • Japan: The Financial Services Agency of Japan and the Ministry of Economy, Trade and Industry are monitoring the ISSB's developments and appear supportive of its goals. Discussions on potential adoption are underway.‍
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  • Hong Kong: The Hong Kong Institute of Certified Public Accountants (HKICPA) has expressed strong support for the ISSB standards and is encouraging their adoption in Hong Kong. The Securities and Futures Commission (SFC) is also following the ISSB's developments with interest.‍
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  • Singapore: The Monetary Authority of Singapore (MAS) has publicly endorsed the ISSB standards and is collaborating with IOSCO to promote global sustainability reporting standards. While not a formal adoption, it suggests Singapore is likely to move towards ISSB alignment.‍
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  • Malaysia: The Malaysian Accounting Standards Board (MASB) has recently launched a consultation on climate reporting requirements, suggesting a potential move towards ISSB-aligned standards.

• Task Force on Climate-related Financial Disclosures (TCFD): This framework focuses specifically on climate change. It helps companies disclose the risks and opportunities they face due to climate change, which is crucial information for investors.
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• TCFD vs ISSB: What's the Difference? The TCFD recommendations played a key role in shaping the ISSB's initial sustainability disclosure standards. While the TCFD remains a valuable resource, the ISSB standards are expected to become the leading framework for climate-related disclosures in the future.
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• European Sustainability Reporting Standards (ESRS): This standardised framework is used to comply with the Corporate Sustainability Reporting Directive (CSRD) in the European Union. It's mandatory for certain companies operating in the EU.
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• The US Securities and Exchange Commission (SEC): The SEC has not yet finalised comprehensive ESG reporting standards, but they are actively considering rule proposals. Notably, in March 2024, they adopted final rules for mandatory climate-related disclosures, expected to take effect later this year. Companies listed on US stock exchanges should stay informed about the SEC's evolving requirements and consider how they might impact their ESG reporting strategy.
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• For the latest information on the SEC's rulemaking activity, please visit their website: https://www.sec.gov/rules/rulemaking-activity.

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Additional Frameworks to Consider:

• CDP (formerly Carbon Disclosure Project): This non-profit organisation focuses on environmental disclosure. They provide letter grades on a company's impacts related to climate change, water security, and deforestation.
• Greenhouse Gas Protocol (GHG Protocol): This framework provides widely used standards for calculating and measuring a company's carbon emissions (Scopes 1, 2, and 3).

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The specific frameworks you need to use will depend on several factors, including industry, location, and size. It's best to consult with local experts for the most suitable approach for your unique situation.

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