Sustainability Standards and Frameworks

TCFD is a principles-based framework that offers a set of recommendations for organisations to address climate risks and opportunities by disclosing information related to governance, strategy, risk management, and metrics and targets. 

Climate-related risks are divided into two major categories, transition risks and physical risks. Climate-related opportunities include resource efficiency and cost savings, the adoption of low-emission energy sources, development of new products and services, access to new markets, and building resilience along the supply chain. 

Supporters of TCFD have grown to over 2600 around the world by October 2021. Various jurisdictions are taking steps to encourage or mandate TCFD aligned disclosure requirements.  

SASB is a set of 77 Industry Standards. Published in 2018, SASB Standards provide a complete set of globally applicable industry-specific standards which identify the minimal set of financially material sustainability topics and their associated metrics for a typical company in an industry. 

Financial impactful is a key concept in SASB Standards. SASB stresses that financial factors and sustainability topics are interconnected, and thus a sustainability factor is not included as a SASB disclosure topic without evidence of financial impact. 

SASB Disclosure Topics are industry-specific versions of sustainability issues. Each SASB Standard contains accounting metrics, technical protocols and activity metrics.   

There has been a dramatic increase in investors around the world using and licensing the SASB standards, representing over US$71 trillion AUM. At least 30 stewardship, proxy voting, and/or policy guidelines reference SASB, often along with TCFD.  

The first version of the GRI guidelines was launched in 2000. In 2016, GRI transitioned from providing guidelines to setting the first global standards for sustainability reporting – the GRI Standards.  

The GRI standards consist of Universal standards and Topic standards. The Universal standards, originally released in 2016, has recently been updated with some significant changes, which will be effective on 1 January 2023.  The new Universal Standards clarify GRI’s emphasis on sustainability impacts, including human rights as the main driver of materiality, while the current standards involve two dimensions of materiality, or what was called ‘double materiality’. Furthermore, the new GRI 3 Material Topics provides step-by-step guidance on how to identify and assess impacts and how to determine material topics for reporting. 

The GRI Standards are generally industry agnostic. In October 2021, GRI published its very first Sector Standard for oil and gas. The GRI Sector Program will develop standards for 40 sectors.  

An integrated report is a concise communication about how an organisation’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation, preservation or erosion of value over the short, medium and long term. An Integrated Report provides users a holistic view of an organisation, enhances transparency and helps build trust. 

At the heart of <IR> is the growing realisation that a wide range of factors, referred to as the six capitals in the <IR> Framework, determine the value of an organisation. Value creation is a fundamental concept of the <IR> Framework. 

Another core concept of the Framework is integrated thinking, which takes into account the connectivity and interdependencies between capitals, stakeholders’ needs and interests, external environment, risks and opportunities, the organisation’s activities, and performance and outcomes. Integrated thinking leads to integrated decision-making and actions that consider the creation of value over the short, medium and long term.  

Over 2,500 businesses in more than 75 countries have implemented Integrated Reporting <IR> since 2013 and the number continues to grow.