Story
Published on
Tags
- May 4, 2023 in
- Carbon Neutrality,
- Carbon Offsets
Share
Story
Published on
Tags
- May 4, 2023 in
- Carbon Neutrality,
- Carbon Offsets
![Sustainability Reporting Frameworks, Standards, and Protocols: A Complete Guide (1) Sustainability Reporting Frameworks, Standards, and Protocols: A Complete Guide (1)](https://i0.wp.com/carbonbetter.com/wp-content/uploads/2021/09/Screen-Shot-2021-09-02-at-11.56.11-AM.png)
FW Sustainability Report
Learn more about how Fierce Whiskers has made sustainable choices every step of the way by downloading its full sustainability report.
DOWNLOAD NOW
![Sustainability Reporting Frameworks, Standards, and Protocols: A Complete Guide (2) Sustainability Reporting Frameworks, Standards, and Protocols: A Complete Guide (2)](https://i0.wp.com/carbonbetter.com/wp-content/uploads/2022/09/Sustainability-Report-Whitepaper.png)
SUSTAINABILITY REPORTING OVERVIEW
Sustainability reporting serves as a valuable tool to achieve corporate commitments and better manage climate-related business risks. This white paper walks you through what’s typically included and what should be considered.
DOWNLOAD NOW
A guide to understanding the sustainability reporting ecosystem used for voluntary disclosures, as well as relevant regulations.
By Nicole Sullivan
As businesses and their stakeholders, including but not limited to customers, investors, and employees, increasingly recognize the importance of environmental, social, and governance (ESG) performance, it’s essential to understand how various sustainability reporting mechanisms work together to enable effective voluntary disclosure of these factors. In this post, we will focus on the “E” aspect of ESG, exploring the world of sustainability reporting frameworks, standards, and corresponding protocols that organizations can use to voluntarily disclose climate impacts, risks, and other environmental factors, such as water and plastic waste. Following these reporting structures is not required when reporting voluntarily. However, they can be very helpful. Some frameworks even offer industry-specific protocols, while others can be applied to both organizations and municipalities.
We will also show the relevance between common frameworks and upcoming or proposed regulations that would affect some United States (US) businesses, including the Securities and Exchange Commission (SEC) climate disclosure rule, the federal supplier rule, and the European Union’s (EU’s) Corporate Sustainability Reporting Directive (CSRD). Join us as we navigate the complex landscape of sustainability reporting and its essential components.
Understanding the Sustainability Reporting Ecosystem
To get a handle on the reporting ecosystem, first, it’s essential to differentiate between its various components:
Frameworks
Sustainability reporting frameworks, also referred to as ESG frameworks or ESG reporting frameworks, are high-level guidelines or approaches that provide organizations with a structure to identify, assess, and report on sustainability issues relevant to their operations. These frameworks allow companies to benchmark their performance against industry peers and global best practices, and to communicate their progress to stakeholders, including investors, regulators, customers, and employees.
There are several well-known sustainability reporting frameworks, such as the CDP (formerly the Carbon Disclosure Project), the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-related Financial Disclosures (TCFD). Each framework has its unique focus, but they all share the common goal of promoting transparency, comparability, and accountability in sustainability reporting.
Standards
Standards are the more detailed and specific guidelines that build upon the principles set forth by frameworks. They outline the precise requirements, metrics, and indicators organizations should use to report on specific sustainability topics. Standards enable comparability across organizations and sectors by providing a common language and set of metrics to measure and disclose sustainability performance.
Standards vary depending on the framework and the industry sector. For example, the GRI offers a set of universal standards applicable to all organizations, as well as topic-specific standards that address industry-specific issues. The SASB, on the other hand, focuses on industry-specific standards designed to capture the financially material ESG issues for companies within a particular sector.
Protocols
Protocols are the specific tools, methodologies, or instructions that help organizations to measure, monitor, and report their sustainability performance in line with the chosen framework and standards. Protocols can be separate from or built-in as part of the frameworks.
Protocols offer detailed guidance on how to collect, calculate, and disclose data consistently and accurately. In addition, they can address various aspects of sustainability reporting, such as greenhouse gas (GHG) emissions accounting, water usage, waste management, energy usage, and plastic waste generated.
Some protocols, like the GHG Protocol, can be used across different frameworks, as they provide universally accepted measurement and reporting methodologies for GHG emissions. Other protocols may be more specific to a particular framework or industry. For example, the GRI has its own set of protocols embedded within its standards.
![Sustainability Reporting Frameworks, Standards, and Protocols: A Complete Guide (3) Sustainability Reporting Frameworks, Standards, and Protocols: A Complete Guide (3)](https://i0.wp.com/carbonbetter.com/wp-content/uploads/2023/05/esg-reporting-frameworks-ecosystem.png)
Additional Components in the Sustainability Reporting Ecosystem
In addition to frameworks, standards, and protocols, the sustainability reporting ecosystem comprises several other components. Ratings evaluate and score organizations’ sustainability performance based on specific criteria, while rankings compare and list organizations’ performance relative to peers or industry benchmarks. Regulations, established by governmental or regulatory bodies, set mandatory sustainability reporting requirements. Global goals, such as the United Nations (UN) Sustainable Development Goals (SDGs), provide a set of universal targets and objectives to guide sustainability efforts. Finally, principles, like the UN Global Compact, define foundational commitments and values that shape organizations’ sustainability strategies. These components work in concert, complementing and supporting each other throughout the reporting process to create a cohesive sustainability reporting system.
Frameworks, Standards, Protocols, and Relevant Regulations
Now that we’ve covered each component individually, below is a chart that illustrates the complex interplay between frameworks, standards, protocols, and relevant regulations in the sustainability reporting ecosystem. These components work together to create a comprehensive and robust reporting landscape that enables organizations to effectively and voluntarily disclose their environmental performance.