ESG Frameworks Overview

ESG Frameworks Overview

This ESG course is available as a face to face event or as a virtual, online training!

A growing number of investors, both institutional and retail (non-institutional), and in developed and emerging markets alike, look at ESG risks as a testing ground for their portfolio companies. The ones that perform well on ESG are well-positioned for the future and have better chances of adapting their products and services to a global consumer base that is increasingly pushing for environmental protection, respect for human rights and corporate transparency. The number of financial institutions that integrate ESG in their decision-making processes is on the rise globally, and it is expected to increase in a post-Covid economy as studies have shown that companies with high ESG ratings held up better than their competitors during the crisis.

The Global Reporting Initiative(GRI) and the Sustainability Accounting Standards Board(SASB) represent two of the most referenced and ubiquitous sustainability and ESG reporting frameworks in the world. 

GRI’s framework for ESG reporting helps companies identify, gather, and report this information in a clear and comparable manner. First launched in 2000, GRI’s ESG reporting framework is now the most widely used[1] by multinational organizations, governments, small and medium enterprises (SMEs), NGOs and industry groups in more than 90 countries. In 2017, 63 percent of the largest 100 companies (N100), and 73 percent of the Global Fortune 250 (G250) reported applying the GRI reporting framework.

SASB Standards are financially material and help to identify the subset of ESG issues most relevant to financial performance in each of 77 industries. SASB Standards are developed based on extensive feedback from companies, investors, and other market participants as part of a transparent, publicly documented process. Not all sustainability issues matter equally to each industry, and the same sustainability issue can manifest differently across industries--that's why SASB Standards are industry-specific.

The World Bank Environmental and Social Framework offers broad and systematic coverage of environmental and social risks. It makes important advances in areas such as transparency, non-discrimination, public participation, and accountability—including expanded roles for grievance mechanisms. It brings the World Bank’s environmental and social protections into closer harmony with those of other development institutions. We have elected to include the World Bank Framework, as it is often applied in diligence of projects and investments in the global south.

The Financial Stability Board created the Task Force on Climate-related Financial Disclosures(TCFD) to improve and increase reporting of climate-related financial information. TCFD reporting is organized into:

• Governance: Disclose the organization’s governance around climate-related risks and opportunities.
• Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning where such information is material.
• Risk Management: Disclose how the organization identifies, assesses, and manages climate-related risks.
• Metrics & Targets: Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.

Notably, these four sections are being used in the development of the forthcoming International Sustainability Standards Board (ISSB) ESG reporting framework and so, are relevant and material to any company or organization seeking to present its ESG performance in alignment with current and future reporting frameworks.

This course will enable participants to learn fundamental ESG reporting concepts and frameworks, workshop how to apply the ESG disclosures and return to their offices with practical tools they can immediately apply when consolidating and communicating their work and how it contributes to ESG performance.