10 top ESG reporting frameworks explained and compared

What is an ESG reporting framework?

ESG frameworks include a mix of platforms, standards and recommendations that guide companies through the ESG reporting process and shape the reports they produce. Various frameworks are available, each with its own set of KPIs and reporting requirements or guidelines. But many of them are now integrated or aligned and can be used together. That's partly the result of ongoing efforts to consolidate and unify what's often described as an alphabet soup of different reporting frameworks.

The available frameworks cover a wide range of ESG factors, such as greenhouse gas emissions, energy consumption, climate change, labor practices, data privacy, community engagement, human rights, board diversity and executive compensation. They're developed by a combination of industry and standards groups as well as nonprofit organizations and international bodies.

Why is ESG reporting important?

ESG reporting helps companies demonstrate their commitment to sustainable growth and responsible business practices. It also shows an organization's progress toward meeting its goals on environmental sustainability, social issues and corporate governance. The reports, generally done on an annual basis, include details on different ESG metrics used to measure performance in those three areas in both quantitative and qualitative ways. They often also list the long-term objectives of ESG strategies and provide updates on key milestones.

Such disclosures can make companies more attractive to investors and customers that consider ESG factors in buying decisions. Surveys show sizable numbers of them do. For example, 54% of 2,820 individual investors surveyed by Morgan Stanley in October 2023 said they expected to increase their sustainable investments during the next 12 months. And in a survey of 20,662 consumers worldwide, conducted by PwC in early 2024, 46% said they purposefully buy products that are more sustainable or have a reduced climate impact compared to other options.

There are internal benefits, too. ESG reporting supports regulatory compliance efforts and helps companies manage ESG and business sustainability risks in their operations. The compliance aspect is becoming even more important due to increasing regulations that require reporting.

At this point, most ESG reporting is done on a voluntary basis. But government mandates on disclosures of sustainability and ESG information are also now being put in place. Most prominently, the European Union's Corporate Sustainability Reporting Directive went into force in January 2023. The CSRD will require about 50,000 companies to report on business risks and opportunities related to social and environmental issues as well as the impact of their operations on people and the environment; the reporting requirements take effect in stages starting in 2025.

A related measure, the Corporate Sustainability Due Diligence Directive (CSDDD), went into force in July 2024 and will start taking effect in 2027. Its main provisions will require companies to identify and act on adverse human rights and environmental impacts, both internally and in their supply chains. But the CSDDD also requires annual reporting on due diligence initiatives. Qualifying companies subject to the CSRD are expected to include the due diligence information in the reports they file under that directive.

In the U.S., the Securities and Exchange Commission finalized a set of climate risk disclosure rules for publicly traded companies in March 2024. The SEC stayed their implementation after lawsuits were filed seeking to block the rules. But if they do take effect as approved, they would require annual disclosures of climate-related risks with a material impact on business strategies or financial performance. Those impacts and actions to mitigate or adapt to the risks would also need to be reported.

Different types of ESG frameworks and standards

A distinction can be made between ESG frameworks and standards. At a high level, their purpose and uses are different. According to the SASB Standards website, sustainability frameworks "provide principles-based guidance on how information is structured, how it is prepared and what broad topics are covered. Meanwhile, standards provide specific, detailed and repeatable requirements for what should be reported for each topic, including metrics." In practice, though, the two are commonly conflated as different types of frameworks.

For example, Nareit, an organization formally known as the National Association of Real Estate Investment Trusts, grouped ESG frameworks into these two primary categories in a widely cited 2019 report:

1. Voluntary disclosure frameworks. These provide a platform and mechanisms for ESG disclosures that are applicable to organizations across different industry sectors and regions. Reporting is commonly done through online surveys or questionnaires that are then scored.
2. Guidance frameworks. Akin to standards, they provide specific topics, methodologies and metrics for companies to use in reporting on their ESG performance.

Nareit also identified the scoring services offered by third-party aggregators as a third ESG framework category. More commonly known as ESG rating agencies and data providers, these are vendors that assess the ESG performance of companies based on publicly available data, including reports submitted through the other types of frameworks. They then issue ESG scores to companies, either in the form of a numerical score or a letter rating.

Popular ESG reporting frameworks and standards

There's no single framework or standard for ESG reporting -- nor is there likely to be, as much as that would simplify the reporting landscape. The lack of standardization is one of the top ESG reporting challenges that companies face. But several standards groups have merged, and various frameworks are being consolidated, integrated or aligned, as mentioned previously. That makes the list of relevant ones something of a moving target while things continue to shake out.

The following are some of the most prominent ESG frameworks, with details on where they now stand. The unranked list was compiled based on a combination of historical developments, current trends and research by TechTarget editors. It's organized on a topical basis and to highlight connections between different frameworks plus recent unification moves.

1. IFRS Sustainability Disclosure Standards

These standards, first released in June 2023, are being developed by the International Sustainability Standards Board. The ISSB was set up in 2021 by the International Financial Reporting Standards (IFRS) Foundation -- its goal is to create a set of standards that can be used globally to report sustainability-related ESG data to investors. The IFRS standards build on the existing SASB Standards and also incorporate elements of other frameworks and standards, as detailed in the following sections. Initially, there are two standards: one for general disclosures of sustainability-related financial information and the other for disclosing specific information about climate-related risks and opportunities. In 2024, the ISSB launched projects to research possible new standards for disclosures on biodiversity and human capital issues. The latter would involve a company's own employees plus workers at suppliers and other business partners.

2. SASB Standards

Originally developed by the now-defunct Sustainability Accounting Standards Board and released in 2018, the SASB Standards contain specifications on disclosing financially material sustainability information across 77 industries. The framework lists subsets of relevant ESG issues for each industry, including markets for different IT products and services. In 2021, SASB was consolidated into the Value Reporting Foundation, which then was absorbed by the IFRS Foundation in 2022. As a result, the ISSB now oversees the SASB Standards. It encourages their continued use by companies that prefer them to the IFRS ones and says it still plans to maintain and update them.

3. GRI Standards

Developed by the Global Reporting Initiative, the GRI Standards are a modular framework that includes sets of universal, sector-specific and topic-based sustainability reporting standards. Companies can also use them to disclose the impacts their business operations have on the economy, the environment and people. The first version was published in 2000 as the GRI Guidelines; after several updates, GRI released its formal standards in 2016. It then began adding the topic standards in 2019 and the sector ones in 2021. Officially, the standards are overseen by the Global Sustainability Standards Board, an independent body that GRI set up in 2015. GRI and the ISSB are working jointly to identify and align common disclosures in their respective standards, which will remain separate.

4. CDP

The Carbon Disclosure Project was founded in 2000 and is now known simply as CDP. It operates a namesake environmental disclosure system that companies can use to report on business risks and opportunities related to climate change, water security and deforestation. CDP then gives them letter-grade scores in each area that can be viewed by various stakeholders. Previously, companies filled out separate questionnaires on the different topics. The questionnaires were combined in 2024, but CDP is still issuing separate scores. In addition, the integrated questionnaire has been aligned with the IFRS standard on climate-related disclosures, which is now the baseline for CDP's questions on climate issues. More than 23,000 companies worldwide, including over 3,700 in North America, used the disclosure system in 2023, according to CDP. City governments can also use it to report on their climate action efforts and other environmental data.

5. TCFD Recommendations

The Task Force on Climate-related Financial Disclosures, commonly known as the TCFD, developed these recommendations on the information that companies should disclose about the financial risks they face due to climate change. The TCFD was created in 2015 by the Financial Stability Board, which monitors the global financial system and recommends actions to strengthen it. In this case, the goal was to help investors, lenders and insurance underwriters assess how climate risks could affect a company's financial performance. Released in 2017, the 11 recommendations focus on four core elements: governance, strategy, risk management, and metrics and targets. Over time, more than 4,000 companies declared support for the TCFD Recommendations. Several countries have mandated reporting that's aligned with them, including the SEC's rules on climate-related risk disclosures. The recommendations were incorporated into the IFRS disclosure standards, which led the TCFD to disband in October 2023. The ISSB took over responsibility for monitoring use of the recommendations in 2024.

6. CDSB Framework

This framework was developed by the Climate Disclosure Standards Board (CDSB) to support the inclusion of ESG reporting in mainstream corporate reports, such as annual reports and 10-K filings. The first version of the framework, released in 2010, focused on climate change issues; an update that incorporated broader environmental reporting became available in 2015; and another that added information on ESG's social factors followed in 2022. At its height, the CDSB Framework was being used by 374 companies in 32 countries, according to the CDSB's website. But the CDSB was consolidated into the IFRS Foundation in 2022, and the IFRS climate disclosure standard effectively replaces the CDSB Framework. Its technical guidance was "part of the evidence base" for that standard, according to the ISSB. While the framework is still available to use, no further development of it is planned.

7. TNFD Recommendations

Modeled on the TCFD's guidelines, this is a set of 14 recommendations for disclosing information about business risks and impacts related to nature and biodiversity issues. The TNFD Recommendations were published in September 2023 by the Taskforce on Nature-related Financial Disclosures, which also provided guidance on implementing them. The TNFD, which was created in 2021, includes 40 senior executives from financial institutions, companies in other industries and professional services firms. Its recommendations are structured similarly to the TCFD ones around disclosures on nature-related governance, strategy, risk and impact management, and metrics and targets. As of June 2024, more than 400 organizations had said they would adopt the recommendations, according to the TNFD. Also that month, the ISSB said it's considering how it can build upon the TNFD Recommendations as part of the possible new IFRS standard on biodiversity disclosures.

8. European Sustainability Reporting Standards

Unlike the standards listed in the previous sections, the European Sustainability Reporting Standards (ESRS) are mandatory ones that companies must use in filing the reports required by the EU's CSRD. They were developed by EFRAG, an independent association formerly known as the European Financial Reporting Advisory Group that was assigned to create the standards. The ESRS include two general standards -- one details things such as concepts, principles and how reports must be structured, while the other outlines required disclosures on business operations, ESG materiality assessments, compliance practices and other general characteristics. Another 10 standards cover reporting requirements on specific ESG topics. The ESRS align or support interoperability with many of the voluntary frameworks and standards, including the GRI and IFRS standards, the CDP questionnaire and the TCFD and TNFD recommendations.

9. United Nations Global Compact

Formed in 2000, the UN Global Compact bills itself as "the world's largest corporate sustainability initiative." It focuses on aligning business strategies and operations with a set of 10 principles on human rights, labor practices, the environment and anti-corruption measures. Participating companies file an annual Communication on Progress (CoP) report that details their adherence to the principles. More than 20,000 companies and 3,800 other organizations now submit reports, according to the Global Compact. In 2023, it launched a new digital platform for CoP submissions that replaced the original narrative format with a standardized questionnaire. In addition, businesses can report on their contribution to and impact on the U.N.'s broader Sustainable Development Goals through a separate platform that blends the Global Compact's principles and the GRI Standards.

10. Workforce Disclosure Initiative

Created in 2016 by ShareAction, a charity that supports responsible investment practices with an ESG focus, the Workforce Disclosure Initiative offers a platform for reporting data on workforce practices and management. The WDI framework is modeled on the CDP's disclosure system: Participating companies fill out an online survey and get a "disclosure scorecard" they can use to benchmark themselves against business peers. Currently, about 170 large companies worldwide complete the annual survey, which asks about topics that include workplace health and safety, policies and practices to support employee well-being, and treatment of both internal employees and supply chain workers. The reported data is also shared with more than 50 institutional investors that support the initiative. In February 2024, ShareAction transferred oversight of the WDI to the Thomson Reuters Foundation.

How to decide which frameworks to use

There are more than a dozen ESG reporting frameworks overall, each with its own metrics and reporting requirements. It can be confusing to try to sort out which one -- or combination of them -- will best suit your organization, especially with the field of ESG reporting undergoing rapid change due to the development of the IFRS standards and the new regulatory requirements.

One obvious factor to consider is the type of ESG information your organization is looking to report on and which framework or frameworks will best support that. Regulatory mandates on reporting also must be factored into the decision-making process, of course. Other potential considerations for choosing among ESG frameworks include the industry an organization is in and the types of information that different stakeholders want to see in reports.

Because various reporting frameworks were created for different purposes, it's common for companies to use more than one. That makes integration and alignment between frameworks another key consideration. Helpfully, the ongoing consolidation and collaboration moves are making it easier to combine various frameworks as needed to support ESG reporting efforts.

TechTarget industry editor Craig Stedman updated this article in August 2024 for timeliness and to add new information.

Lauren Gibbons Paul is a freelance writer and editor who has covered IT topics for more than 20 years, specializing in the application of technology to drive business value.