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Environmental, Social, and Governance (ESG) investing?has gained immense popularity in recent times, and investors are now expecting more from organizations than ever before. In order to cater to these demands, transparent, accurate, and timely reporting have become essential. However, with a plethora of ESG reporting frameworks available, it can be overwhelming to decide where to begin. So, the question arises, which framework should a company choose to start with?
In this article, we will?take a look at what an ESG reporting framework is before briefly?diving into 6 of the most common ESG reporting frameworks including GRI, CDP, TCFD, SASB, ISSB, and CSRD. After reading, don’t forget to check out the latest FigBytes webinar, Become an MVP of ESG, now on-demand!
What Are ESG Reporting Frameworks and Standards??
An ESG framework is a set of guidelines for preparing ESG reports and disclosures. An ESG standard is a prescribed methodology for preparing ESG reports and disclosures. The difference is a framework allows for some flexibility in defining the direction of the report, whereas a standard contains specific and detailed criteria or metrics that should be included in any report or disclosure.???
ESG reporting frameworks and disclosure standards play a vital role in standardizing?ESG reporting. In the absence of such frameworks, corporations might cherry-pick the metrics that paint them in a favorable light. Consequently, investors may find it challenging to pinpoint organizations that are genuinely committed to achieving their sustainability objectives while minimizing their adverse impact on the environment and society.