The 4 Major ESG Frameworks

How ESG Compliance Frameworks Work

Any ESG implementation project uses a series of compliance frameworks (also known as compliance programs).

A compliance framework is a set of principles-based rules and best practices used to decide how information is determined to be material in the first place. Compliance frameworks also lay out how useful information ought to be organized and presented in disclosures and reports.  

These ESG frameworks provide two major benefits for any organization undergoing ESG implementation:

  1. The frameworks will simplify the process of selecting and implementing ESG/sustainability best practices to ensure the efficient and effective integration of ESG throughout the organization.
  2. The frameworks will ensure the credibility of systems and processes used in the integration of ESG/sustainability into the organization. As a result, stakeholders will know relevant metrics, disclosures, reports, and actions are accurate and reliable.

We encourage broad adoption and use of the standards and metrics provided by these frameworks. 

The four major ESG compliance frameworks are as follows:

Sustainability Accounting Standards Board (SASB)

The Sustainability Accounting Standards Board (SASB) is an ESG framework that sets policies for the disclosure of financial sustainability information by companies to their investors.  SASB Standards are designed to identify a minimum set of sustainability issues most likely to impact the operating performance or financial condition of the typical company in an industry, regardless of location. 

Task Force for Climate-Related Financial Disclosures (TCFD)

The Financial Stability Board, which promotes international financial stability by coordinating national financial authorities and international standard-setting bodies as they work toward developing strong regulatory, supervisory, and other financial sector policies, established the Task Force on Climate-related Financial Disclosures (TCFD). They established the TCFD to develop recommendations for more effective climate-related disclosures that could promote more informed investment, credit, and insurance underwriting decisions and enable stakeholders to understand better the concentrations of carbon-related assets in the financial sector and the financial system’s exposures to climate-related risks.

International Integrated Reporting Council (IIRC)

The International Integrated Reporting Council (IIRC) was formed in August 2010 with the objective to create a globally accepted framework for a process that results in communications by an organization about value creation over time. In June 2021, the IIRC merged with the Sustainability Accounting Standards Board (SASB) to form the Value Reporting Foundation (VRF). The objective of the merger was to provide investors and corporates with a comprehensive corporate reporting framework across the full range of enterprise value drivers and standards to drive global sustainability performance.

Global Reporting Initiative (GRI)

The GRI (Global Reporting Initiative) is an independent, international organization that helps businesses and other organizations take responsibility for their impacts, by providing them with the global common language to communicate those impacts. They provide the world’s most widely used standards for sustainability reporting – the GRI Standards.