Sustainability frameworks are used by companies to disclose their environmental, social and governance (ESG) risks and opportunities to investors and stakeholders. ESG frameworks build confidence with investors, showcasing transparency and accountability of business practices. An ESG framework monitors high level progress by tracking key factors for achieving company goals, shaping policies and informing decision making for long term sustainable growth.
Futureproof’s Key Sustainability Frameworks
- Sustainability Accounting Standards Board (SASB), is a solid reference point for regulation as most investors use SASB for their investments.
- Global Reporting Initiative (GRI) provides the global terminology for sustainable reporting when assessing a company’s sustainable performance.
- Task Force on Climate-Related Financial Disclosures (TCFD) framework, now overseen by the International Sustainability Standards Board (ISSB), helps companies disclose their climate-risk information.
- Carbon Disclosure Project (CDP) is used by companies to disclose environmental information to stakeholders.
- The UN Sustainable Development Goals (UNSDGs) are another set of global objectives used to measure progress on social, environmental and economic indicators. The UNSDGs are a set of principles encouraging companies to develop sustainable and socially responsible policies.
What to Include in Your ESG Framework
The above sustainability frameworks provide a set of global standards and data indicators to measure ESG performance. Common material topics and metrics included in the sustainability frameworks include, but are not limited to:
- GHG emissions
- Energy
- Health and safety
- Water management
- Community engagement
- Waste
- Economic performance
- Traditional owners
- Business ethics
- Risk management
- Diversity and inclusion
- Employee development
- Data and cyber security
Sustainability Framework Next Steps
With a lengthy list of topics to consider, selecting a suitable ESG framework is usually done after stakeholder mapping and materiality assessment to determine a company’s material topic priorities. It is imperative that a company adopts a strategic approach to prioritising topics that addresses impacts on stakeholders, communities and the environment.
Once all the information has been disclosed using a suitable sustainability framework, fund managers and ratings agencies are able to select and screen companies based on their ESG performance. A rigorous ESG strategy can help attract more investors, build customer confidence, improve financial performance and develop sustainable long-term operations, while gaining a competitive edge in your industry.
Our team of ESG consultants can guide you through the best framework for your company.
Contact us today.