Sustainability Frameworks: ESG Reporting

ecoHQ is publishing a blog series for those who want to know more about Sustainability, Net Zero, ESG and Carbon Footprinting or Carbon Credits.
In this four-part article series, you will learn about the critical components of Corporate Sustainability – Net Zero, ESG and Carbon Footprint Consulting. 
In Part 1  and Part 2, we laid down the basics of the Net Zero promise and the importance of ESG reporting. We previously covered ESG investments as well.
In Part 3, we explore frameworks for ESG assessments.

You’d assume that for a concept that was globally recognised a decade ago as vital to our planet’s very survival, we’d have ironed out the specifics already. Unfortunately, there still isn’t a set international standard for ESG assessments.

The process so far has been largely organic – entities from all over the world trying their hand at it, learning from theirs and each other’s mistakes, and course correcting along the way.

The advantage of an organic process is that eventually the creativities of a 100 different frameworks will democratically boil down to a standardisation that is both flexible and reliable. But this is a delayed benefit.

The cons of having no set yardstick and simply relying on this organic process are that today, each company can manipulate their reports, hiding and reveal as is convenient, to produce the most investor-friendly narrative. Furthermore, the existence of multiple reporting frameworks is confusing to small-businesses, who don’t have the resources to validate each.

Alas, that’s the landscape in which we must function today. Let’s take a look at some of the most popular ESG reporting frameworks and understand how to interpret them.

Towards Net Zero: ESG Reporting

We have covered what Net Zero and ESG are and now it’s time to understand how ESG assists businesses with maintaining a responsible investing course while assessing their performance and championing transparency. 

ESG reporting substantiates a corporation’s sustainability efforts, going a long way in satisfying stakeholders’ demands for transparency and accountability. And while it’s voluntary, future-forward businesses view it as a necessary step in communicating their ESG criteria. 

Moreover, access to data is becoming increasingly easier, driving a surge in ESG reporting.

As more and more investors add sustainable companies to their portfolios, ESG’s prominence will grow. It’s also probably why more corporations link executive incentives to ESG performance

Here are some major components of the ESG framework that aid companies in meeting their net-zero targets:

ESG Assessment Frameworks
  1. Carbon Disclosure Project (CDP) 

CDP, founded in 2010, is a non-profit organisation running the global carbon disclosure system for countries, companies and investors to manage environmental impact. Primarily, the project focuses on carbon emissions, water security and forests.

Today, over 18,000 companies and investors with assets of more than US$130 trillion disclose ESG initiatives through CDP. That’s because the framework has the most comprehensive dataset on corporate and city actions against climate change.

CDP uses the information acquired from its annual reporting process and scores companies based on their ESG performance every year. Investors can then use these scores to inform their decisions.

In 2015, CDP introduced quality-reviewed GHG emissions data, which has since been widely used for investment decisions and carbon risk assessments.

  1. Sustainability Accounting Standards Board (SASB)

SASB consists of standards for 77 industries that companies can use to report their materiality assessment information and industry-based sustainability risk disclosures.

These standards were developed with evidence-based research, broad and balanced participation from companies, investors and experts, and oversight from the independent SASB Standards Board.

In August 2022, IFRS Foundation assumed responsibility for SASB as it merged with the Value Reporting Foundation to form a new entity, ISSB.

  1. International Sustainability Standards Board (ISSB)

Formed by the merger of the Value Reporting Foundation and the Sustainability Accounting Standards Board (SASB), ISSB has been built on SASB’s standards.

ISSB establishes a global baseline for disclosure standards that meet investors’ needs. Moving forward, ISSB intends to provide a comprehensive reporting framework across enterprise value drivers and standards, fueling global sustainability performance. 

  1. Science Based Targets initiative (SBTi)

SBTi is a partnership between CDP, World Resources Institute (WRI), United Nations Global Compact and World Wide Fund for Nature (WWF). It’s also the lead partner of the Business Ambition for 1.5oC campaign.

The initiative defines and promotes the best practices to reduce emissions and set net-zero targets aligning with climate science. It guides organisations on a clearly-defined path to combat emissions according to the Paris Agreement Goals.

SBTi independently evaluates and approves science-based targets set by companies, keeping its strict criteria in mind. Organisations must follow a five-step process to set science-based targets – Commit, Develop, Submit, Communicate and Disclose.

Over 2,200 companies have set science-based targets leading the transition to net zero, with more joining the fray. 

  1. Global Reporting Initiative (GRI)

GRI became the world’s first global standard for sustainability when it was launched in 1997. It was developed in response to the notable Exxon Valdez oil spill by the Coalition for Environmentally Responsible Economies (CERES) and UN Environment Program (UNEP).

More than 25 years later, GRI remains one of the most widely used sustainability reporting frameworks globally. It includes three sets of standards – universal, topic-specific and sector standards.

Over 10,000 organisations in 100 countries use this framework to measure and communicate their impact on people, the planet and profit.

GRI is a leading enabler in ensuring transparency and effective dialogue between companies and stakeholders.

  1. Task Force on Climate-related Financial Disclosures (TCFD)

As the name suggests, TCFD was created by the Financial Stability Board (FSB) to share climate disclosures that help assess risks. 

It offers disclosures in four key areas – governance, strategy, risk management and metrics – that impact financial performance. These risks could arise due to increasing temperatures, climate-related policies and emerging technologies. 

TCFD helps investors make better-informed decisions for capital allocation and companies to evaluate short, mid and long-term risks better. 

  1. Sustainable Finance Disclosure Regulation (SFDR)

SFDR, active since March 2021, is a comprehensive sustainability disclosure framework covering a wide range of ESG metrics.

The framework is a fundamental pillar of the European Union’s (EU) Sustainable Finance Agenda and a core part of its 2018 Sustainable Finance Action Plan, which includes Taxonomy Regulation and Low Carbon Benchmarks Regulation.

SFDR was introduced as a European regulation to improve transparency for sustainable investment products and sustainability claims and to prevent greenwashing.

  1. Morgan Stanley Capital International (MSCI)

MSCI is ‘a leading provider of critical decision support tools and services for the global investment community’.

Morgan Stanley comes with a data-rich heritage that translates into MSCI. Its first ESG index was launched in 1990, and since 1999, MSCI has been rating companies based on industry material ESG risks.

Over 1,700 pension funds, asset managers, consultants, advisers, banks and insurers follow the framework for sustainability disclosures.

It supports clients in understanding and analysing key sustainability risk drivers to build better portfolios. Investors can also use MSCI’s insights to improve transparency across the investment process.

Comprehensive ESG reporting enables businesses to take big strides in sustainability. But it works even better in association with Carbon Footprint Consulting – the next step towards net zero.

Find out more in Part 4


The article was strategised by Deepa Sai

Ayesha is a freelance writer and editor with 5+ years of experience building brands online. She works extensively with B2B businesses in SaaS (Sales, Marketing & Ecommerce) and Sustainability. Previously a social media manager, she now loves writing long-form articles backed by meticulous research. Connect with her on LinkedIn

 The article was edited by A. Ashni, a freelance writer, editor, and translator. Her research expertise lies in sustainability, gender, and disability. When not working, she’s rescuing animals and fundraising for stray population control in Mumbai.


Published by ecoHQ

ecoHQ is a platform advocating for sustainability and conscious consumerism in India. At ecoHQ, we help Indians make educated choices about sustainable practices through awareness, advocacy and accountability. We spread awareness about sustainable development, advocate conscious growth and help brands be accountable for responsible solutions. Our ultimate goal is educating you to make the right choices for our people and planet.

2 thoughts on “Sustainability Frameworks: ESG Reporting

Leave a Reply