20 July 2022

How to measure
sustainability

As sustainability becomes more important to investors and consumers, companies are increasingly looking to produce ESG reports. This article shows the frameworks used to measure your sustainability efforts.

Because there are no official standardised requirements for sustainability reporting, several frameworks have emerged. The most popular of these are the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).

Each has slightly different areas of focus, be that in purpose, audience or methodology. By considering your audience, risks that directly affect your business, and the ease of data collection required to satisfy each framework, you should be able to choose one or two that represent your individual goals.

Used by public and private companies across industries and sectors, GRI is the most widely adopted reporting method in the world, and when used in conjunction with the SASB, for example, would satisfy an investor-led audience.

To better align sustainability reporting frameworks, the International Integrated Reporting Council established the Corporate Reporting Dialogue in 2014, which could lead to changes in regulation and even a single global regulator for corporate reporting.

Sustainability standards and frameworks

  1. Global Reporting Initiative (GRI)

    • What is it? GRI standards show a company’s impacts on the environment, society and the economy. Applicable to businesses of all sizes, GRI is the most widely adopted reporting methodology in the world.
    • Who will be interested? General Audience
    • How to use the framework: Presented annually, the GRI requires organisations to present data related to its relevant material topics, or provide a valid reason for its omission.To increase transparency, alongside these disclosures, a GRI content index is required to summarise an organisation’s reported information and the location stakeholders can find it.SASB standards are industry-specific, meaning their usage is different for each reporter.

    Find out more: globalreporting.org/

  2. Sustainability Accounting Standards Board (SASB)

    • What is it? Focussed specifically on those metrics of interest to investors, SASB highlights the financial impacts of sustainability on the business.
    • Who will be interested? Investors
    • How to use the framework: SASB standards are industry-specific, meaning their usage is different for each reporter.Because they’re targetted at investors, individual companies should each determine which disclosure topics are financially material to their business, and report against those. Following this method reduces unnecessary costs and minimises noise.

    Find out more: sasb.org/implementation-primer/

  3. <IR> Framework

    • What is it? Originally published by the International Integrated Reporting Council (IIRC) (now the Value Reporting Foundation (VRF)), The <IR> FrameworkIIRC aims to support businesses to focus on value creation over the short, medium and long term, through integrated thinking and reporting.
    • Who will be interested? Investors mainly, but also all stakeholders
    • How to use the framework: Principles-based, the IR framework doesn’t prescribe key performance indicators or measurement methods, but rather provides guidance as to what information to include in an integrated report. These principles include strategic focus and future orientation, materiality, reliability and completeness.

    Find out more: integratedreporting.org/resource/international-ir-framework/

72% of investors surveyed say they conduct a structured, methodical evaluation of nonfinancial disclosures - 2020 EY Global CCaSS Institutional Investor survey

  1. Taskforce for Climate Disclosure (TCFD)

    • What is it? Structured around four pillars – Governance, Strategy, Risk Management and Metrics and Targets – TCFD recommendations apply across sectors.
      TCFD reporting requirements are the chosen standard for UK reporting.
    • Who will be interested? Investors
    • How to use the framework: Applied on a case-by-case basis, companies should undertake an initial risk assessment to determine the weight to be placed on each of the four pillars.They should then report on the disclosures on a ‘comply or explain’ basis.

    Find out more: fsb-tcfd.org/

  1. Sustainability Development Goals (SDGs)

    • What is it? Adopted by the United Nations in 2015, SDGs are not strictly a reporting standard but represent a set of global goals for protecting the planet, ending poverty, and ensuring all people enjoy peace and prosperity.
    • Who will be interested? All stakeholders
    • How to use the framework: Companies should first prioritise the most relevant SDGs to them, and explain why they have done so.They should set SMART goals against these chosen SDGs and disclose both positive and negative impacts.To add credibility, these goals should be referenced in the CEO’s statement, showing their importance to the company from the top down.

    Find out more: sdgs.un.org/goals/

  1. CDP (formerly the Carbon Disclosure Project)

    • What is it? A global disclosure system, CDP drives companies to reduce their greenhouse gas emissions, safeguard water resources and protect forests. These disclosures can then be publicised through the sustainability report.
    • Who will be interested? Investors
    • How to use the framework: Data collected on environmental impact is submitted to CDP’s online recording platform.This data can then be used to improve the company’s performance.This data, along with other findings from the CDP, can be presented to stakeholders.This data is also presented to the market through reports, analyses and company scoring.

    Find out more: cdp.net/en

Download your guide to sustainability report design

Are you looking to publish your first sustainability report, or improve the design of your current offering?

Download our guide to sustainability report design and learn:

✅ The most popular reporting frameworks and how to use them
✅ The five key steps to successful sustainability reporting
✅ Our top tips for excellent report design

DOWNLOAD


Partner with JDJ for your sustainability report design

If you want to partner with an external agency, JDJ has over 10 years of experience designing reports for financial, educational, professional and technology companies in the UK and the US. Knowledgeable about the major sustainability reporting frameworks and with a proven track record of producing reports which inspire investors, consumers and internal stakeholders alike, we’d love to help on your sustainability reporting journey.

CONTACT US

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