The Participants’ frameworks and standards are the resources most often employed by organisations seeking to report on ESG issues (e.g. climate change) and to integrate financial and non-financial risks and opportunities into their reporting.
Each of the five Participants has a unique outlook and ambition when it comes to reporting, with each serving different user needs. Notwithstanding these differences, the frameworks and standards can be used together to prepare effective and
high-quality disclosures. An overview of the outlook and ambition of each Participant and how its standards or framework support(s) the achievement of these ambitions is presented below. Given the Project’s focus on alignment with the TCFD recommendations, the following section also explains how climate-related issues are considered.
Building on this overview, the Participants have developed a series of Frequently Asked Questions (FAQs) that set out how the different frameworks and standards can be used to fulfil varied and differing reporting ambitions, as presented in Section 3.
CDP wants to see a thriving economy that works for people and planet in the long term. To achieve this, it focuses investors, policymakers, companies, cities, states and regions on taking urgent action to build a truly sustainable economy.
CDP runs a global disclosure system7 that enables companies, cities, states and regions to measure and manage their environmental risks, opportunities and impacts. More than 7,000 companies respond to CDP’s climate change, water security and forests questionnaires annually at the request of more than 525 investors with US$96 trillion in assets and 125 large purchasing organisations. CDP provides data users with critical financial and non-financial information to integrate sustainability into their investment and decision-making processes.
CDP’s questionnaires gather both qualitative and quantitative information from across governance, strategy, risk, impact and performance. To aid comparability and ensure comprehensiveness, CDP includes sector-specific questions and data points; for example, the climate change questionnaire incorporates sector-specific questions for high-impact sectors, such as agricultural commodities, oil and gas, cement, and transport services. In 2018, CDP aligned its climate change questionnaire with the TCFD.
CDSB’s mission is to create the enabling conditions for material climate change and environmental information to be integrated into mainstream reports. This facilitates the assessment of the relationship between specific environmental matters and the organisation’s strategy and financial performance for the benefit
CDSB does this by offering companies the CDSB Framework8 for reporting natural capital and environmental information with the same rigour as financial information. The CDSB Framework helps companies to provide investors with decision-useful environmental information via mainstream corporate reports, enhancing the efficient allocation of financial capital in support of sustainable and climate-resilient economies. Regulators also benefit from the compliance-ready materials that CDSB produces.
The CDSB Framework is composed of seven guiding principles and 12 reporting requirements. These set out the how and the what, respectively, for reporting relevant and material environmental and climate-related information in mainstream annual reports.
GRI, an independent, international organisation, helps businesses and governments worldwide understand and communicate their impact on critical sustainability issues, such as climate change, human rights, governance and social well-being. This enables real action to create social, environmental and economic benefits for everyone.
GRI Sustainability Reporting Standards9 (GRI Standards) are the most widely adopted global standards for sustainability reporting. Sustainability reporting, as promoted by the GRI Standards, is an organisation’s practice of reporting publicly on its contributions – positive or negative – towards sustainable development. The Standards are designed to enhance the global comparability and quality of information on these impacts, thereby enabling greater organisational transparency and accountability.
The GRI Standards are structured as a set of interrelated, modular standards. Three universal Standards apply to every organisation preparing a sustainability report. An organisation further selects from the set of topic-specific standards for reporting on its material topics. These standards are organised into three series – economic, environmental and social.
The GRI Standards contain several topic-specific standards for organisations to use to report climate change where they identify it as a material topic, i.e. GRI 305: Emissions 2016; GRI 302: Energy 2016; GRI 303: Water and Effluents 2018; and GRI 201: Economic Performance 2016, Disclosure 201-2 (related to financial implications and other risks and opportunities due to climate change).
The IIRC is a global coalition of regulators, investors, companies, standard setters, the accounting profession and NGOs. Its mission is to establish integrated thinking and reporting within mainstream business practice as the norm in the public and private sectors. Its vision is to align capital allocation and corporate behaviour to wider goals of financial stability and sustainable development through the cycle of integrated thinking and reporting.
An integrated report is a concise communication about how an organisation’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value over the short, medium and long term. The International <IR> Framework10 sets out seven guiding principles and eight content elements to govern the overall content of an integrated report, as well as providing organisations with additional general guidance relating to fundamental concepts of integrated reporting.
The IIRC recognises the increasing importance of climate change to the ability of all organisations to create value over time and, therefore, the need to address climate-related risks and opportunities in an integrated report.
The mission of the SASB Foundation is to establish industry-specific disclosure standards across environmental, social, and governance topics that facilitate communication between companies and investors about financially material, decision-useful information. Such information should be relevant, reliable and comparable across companies on a global basis.
The SASB Foundation envisions an investment universe where a shared understanding of companies’ sustainability performance enables companies and investors to make informed decisions that drive improved sustainability outcomes and thereby lead to improved long-term value creation.
The SASB Foundation has established an independent standard-setting arm, the Sustainability Accounting Standards Board, that sets sustainability disclosure standards that are industry-specific and tied to the concept of materiality to investors. The standards are intended to capture sustainability matters that are financially material–reasonably likely to have a material impact on financial performance or condition.
Climate risk is nearly ubiquitous, appearing in 69 of the 77 SASB Standards,11 but it manifests in industry-specific ways. SASB Standards enable TCFD disclosure by providing industry-specific metrics to evaluate company exposure to and management of climate-related risks and opportunities.
7 Available online: https://www.cdp.net/en/guidance
8 Available online: https://www.cdsb.net/sites/default/files/cdsb_framework_2.1.pdf
9 Available online: https://www.globalreporting.org/standards/
10 Available online: http://integratedreporting.org/wp-content/uploads/2015/03/13-12-08-THE-INTERNATIONAL-IR-FRAMEWORK-2-1.pdf
11 Available online: https://www.sasb.org/standards-overview/