SUSTAINABLE DEVELOPMENT GOALS (SDGS)
SDG is a set of goals set forth by the United Nations with the intention to ensure a sustainable future. The goals represent 17 sustainable themes with 169 part goals, all to be achieved by 2030. “In June 1992, at the Earth Summit in Rio de Janeiro, Brazil, more than 178 countries adopted Agenda 21 (https://sustainabledevelopment.un.org/outcomedocuments/agenda21, a comprehensive plan of action to build a global partnership for sustainable development to improve human lives and protect the environment.” Many companies align a number of the SDGs with the company's purpose and overall strategy.
UNITED NATIONS GLOBAL COMPACT
The UN Nations Global Compact a UN initiative that encourages companies to commit to sustainable and social responsible polices as well as reporting on implementation and progress. The initiative is built on ten principles. “By incorporating the Ten Principles of the UN Global Compact into strategies, policies and procedures, and establishing a culture of integrity, companies are not only upholding their basic responsibilities to people and planet, but also setting the stage for long-term success.” There are local chapters in which enable networking with like-minded in your country – share challenges and success stories.
GLOBAL REPORTING INITIATIVE (GRI)
GRI an international independent standards organization that support companies, governments and other organizations in understanding and communicating their impact on climate, human rights and corruption. GRI’s framework for sustainability reporting are widely used standards (free to public). The organization also acknowledge that industries differ in their impact on the climate, economy and community at large hence have also made available sector standards. GRI frameworks put emphasis on accountability and transparency. GRI 101 is set up to help companies getting started with the reporting process.
PRINCIPLES FOR RESPONSIBLE INVESTMENT (PRI)
PRI is an independent organization, in which “encourages investors to use responsible investment to enhance returns and better manage risks, but does not operate for its own profit; it engages with global policymakers but is not associated with any government; it is supported by, but not part of, the United Nations.” PRI offers reporting process, guidelines, data portal, investment tools, case studies, webinars and events to keep investors informed on how to integrate ESG into their investment strategies.
INTERNATIONAL INTEGRATED REPORTING COUNCIL (IIRC)
IIRC is a global coalition of regulators, investors, companies, standard setters, the accounting profession, academia and NGOs. The coalition work towards aligning capital allocation and companies’ sustainability efforts via integrated reporting. “An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term.”
DOW JONES SUSTAINABILITY INDEX (DJSI)
DJSI is a global index consisting of the top 10% of the largest 2,500 stocks in the S&P Global Broad Market Index based on their sustainability and environmental practices.” The companies listed are reviewed on an annual basis to see if they follow the sustainability guidelines. Companies may be removed from the index based on a number of ethical exclusions as well as damaging reputation (in the media) related to ESG issues (human rights, labor disputes, workplace safety, illegal commercial activities, fraud, negative environmental impact).
CLIMATE DISCLOSURE STANDARDS BOARD (CDSB)
CDSB is an international consortium of business and environmental NGOs. The consortium provides a framework for reporting environmental information that can be integrated into mainstream reports. CDSB state that investors, analysts, companies, regulators, stock exchanges and accounting firms will benefit from their framework.
SUSTAINABILITY ACCOUNTING STANDARDS BOARD (SASB)
SASB is an independent non-profit organization that sets standards to guide the disclosure of financially material sustainability information by companies to their investors. SASB Standards identify the subset of environmental, social, and governance (ESG) issues most relevant to financial performance in each of 77 industries. SASB also provides education and other resources that advance the use and understanding of its Standards.” I suggest you have a look at the organization’s conceptual framework, in which provides insight into audience, core objectives, guiding principles, accounting metrics and more.
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD)
TCFD is an organization that was established in December of 2015 with the goal of developing a set of voluntary climate-related financial risk disclosures which can be adopted by companies so that those companies can inform investors and other members of the public about the risks they face related to climate change. The organization was formed by the Financial Stability Board (FSB) as a means of coordinating disclosures among companies impacted by climate change.” I suggest you have a look at the TCFD’s status report from 2020 that deliver useful information about users feedback (effective climate-related financial disclosures including targets related to GHG emissions), reviewing implementation challenges, case studies on implementation, and initiatives supporting TCFD (including government and regulatory efforts). Interesting read on an oil major being pushed to adopt the TCFD framework.
CERTIFIED B CORPORATION
CBC is a private verification and certification administered by B Lab which has set up an ESG impact assessment. The certification is for companies that balances purpose and profit. Companies are tracked on their social and environmental performance in their pursuit for “positive impact for their employees, communities, and the environment.” The certification consists of three pillars: performance, legal and transparency.
Poseidon Principles is a framework for evaluating and disclosing climate alignment of financial institutions providing services to ship finance and the maritime industry. The principles are fully aligned with the International Maritime Organization’s, IMO (https://www.imo.org/) ambitions for GHG emissions reduction and decarbonization of shipping. The framework is built on four principles: assessment, accountability, enforcement and transparency. Recommended video
Most of the larger companies have their reporting under control, but I hope that the overview of the various frameworks for reporting will be of help to the ones that are not familiar with the most common that are currently in use. The UK government have published a useful guide with frameworks for non-financial reporting. They have also made a list of FTSE 100 companies and their reporting practices, see page 132 onwards. Worth noting is that last year, five of the larger organizations (CDP, CDSB, GRI, IIRC, SASB) announced that collaboration is key in a complex reporting world hence they set forth a common agenda for working together for improving sustainability reporting. “Transparent measurement and disclosure of sustainability performance is now considered to be a fundamental part of effective business management, and essential for preserving trust in the business as a force of good.”
A recent article by edie.net newsroom stated that “more than 20% of the world's largest corporates, worth sales of more than $14trn, have now committed to net-zero targets, but more transparency and short-term targets are required to navigate potential greenwash issues.” A statement that supports the importance of ensuring credible reporting on the journey towards your net-zero target.
As a closing remark, Climate Action 100+ have newly released a benchmark report that measured the progress of large corporations with a net-zero target. “Almost three-quarters of the companies have committed to aligning with the Task Force for Climate-Related Financial Disclosures (TCFD) recommendations. However, only 10% use climate-scenario planning that includes the 1.5-degrees Celsius scenario and encompasses the entire company.” Read more about the findings in the edie.net article and review the full report here.