ESGiQ Right Arrow ESG Framework Overview Part 2: Narrow Frameworks

ESG Framework Overview Part 2: Narrow Frameworks

calender Last Updated: May 12, 2021

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In part two of the frameworks overview, the following includes a description of those frameworks that are more narrow in scope, with a focus primarily on sustainability or have specific industries or sectors defined. 

Sustainability Accounting Standards Board (SASB) – Summary 

The Sustainability Accounting Standards Board’s (‘SASB’) standards aim to guide the disclosure of financially material sustainability information by companies to their investors. The SASB standards identify the subset of environmental, social, and governance issues most relevant to financial performance in each of 77 industries. Standards are designed to help companies disclose financially-material sustainability information to investors. 

The Sustainability Accounting Standards Board (‘SASB’) is an independent non-profit organization that sets standards to guide the disclosure of financially material sustainability information by companies to their investors. The SASB Standards identify the subset of environmental, social, and governance issues most relevant to financial performance in each of 77 industries. Standards are designed to help companies disclose financially-material sustainability information to investors. 

SASB standards address ESG disclosures in the below set of industry categories: 

  • Consumer Goods 
  • Extractives & Minerals Processing 
  • Financials 
  • Food & Beverage 
  • Health Care 
  • Infrastructure 
  • Renewable Resources & Alternative Energy 
  • Resource Transformation 
  • Services 
  • Technology & Communications 
  • Transportation 

SASB recognizes that there is much ESG and sustainability information disclosed publicly, and that it can therefore often be difficult to identify and assess which information is most useful for making financially related decisions. With this in mind, SASB identifies financially material issues, which are the issues that are reasonably likely to impact the financial condition or operating performance of a company and therefore are most important to investors. This task can be carried out through a ‘materiality map’ accessible on SASB website. 

Carbon Disclosure Project – Summary  

Run by the Carbon Disclosure Project (‘CDP’), the CDP global environmental disclosure system aims to support organizations, cities, states and regions in measuring and addressing their risks and opportunities on climate change, water security and deforestation, enabling them to disclose environmental information at the request of their stakeholders.  

The Carbon Disclosure Project (‘CDP’) is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. CDP provides a global environmental disclosure system aimed to support organizations, cities, states and regions to measure and manage their risks and opportunities on climate change, water security and deforestation.  

More specifically, CDP provides companies with the platform to disclose environmental information at the request of their stakeholders. In addition, companies disclosing to their investors and customers through CDP can gain tangible business benefits, such as: 

  • protect and improve the company’s reputation 
  • boost competitive advantage 
  • get ahead of regulation 
  • uncover risks and opportunities 
  • track and benchmark progress 

Task Force on Climate-related Financial Disclosures – Summary 

Issued by the Task Force on Climate-related Financial Disclosures (‘TCFD’), as established by the Financial Stability Board, the TCFD recommendations on climate-related financial disclosures are designed to enable decision-useful, forward-looking information that can be included in financial filings, addressing 4 main thematic areas: 1) governance; 2) strategy; 3) risk management; and 4) metrics and targets. 

The Task Force on Climate-related Financial Disclosures (‘TCFD’), as established by the Financial Stability Board, aims to develop recommendations for more effective climate-related disclosures that could promote more informed investment, credit, and insurance underwriting decisions and, in turn, enable stakeholders to understand better the concentrations of carbon-related assets in the financial sector and the financial system’s exposures to climate-related risks.  

Specifically, the TCFD issued recommendations on climate-related financial disclosures, which are described into more detail within the final report on the same. The recommendations, designed to enable decision-useful, forward-looking information that can be included in financial filings, are structured around 4 thematic areas: 

  • governance 
  • strategy 
  • risk management 
  • metrics and targets 

Leverage OneTrust ESG to enable effective climate-related disclosures and collect appropriate information to include in financial filings by complying with the TCFD recommendations. 

Climate Disclosure Standards Boards – Summary 

Published by the Climate Disclosure Standards Boards (‘CDSB’), the CDSB framework for reporting environmental and climate change information is built to: 1) align with and complement the objective of financial reporting; 2) encourage standardization of environmental information reporting; 3) enable and encourage investor sustainable decision making on the allocation of financial capital; and 4) support compliance with regulatory and reporting requirements on the provision of environmental information.  

The Climate Disclosure Standards Boards (‘CDSB’), an international consortium of business and environmental NGOs, is committed to advancing and aligning the global mainstream corporate reporting model to equate natural capital with financial capital. 

The CDSB Framework for reporting environmental and climate change information aims to, among other things:  

  • align with and complement the objective of financial reporting,  
  • encourage standardization of environmental information reporting 
  • enable and encourage investor decision making on the allocation of financial capital10 to activities that supports environmental protection 
  • support compliance with regulatory and other reporting requirements on the provision of environmental information 

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