ESG Reporting: Global Frameworks, Standards, and Regulations

Navigating the landscape of ESG reporting is complex, and understanding the variety of frameworks, standards, and regulations in place worldwide and which ones your company must comply with can be extremely difficult. Find out more about the differences between frameworks, standards, and regulations and what is mandated by differing countries.

ESG Reporting Frameworks

ESG reporting frameworks provide overarching guidelines for companies to structure and disclose their sustainability efforts. These frameworks serve as foundational tools for standardising ESG disclosures.

1. Task Force on Climate-related Financial Disclosures (TCFD)

• Established by the Financial Stability Board (FSB) to improve and standardise climate-related financial disclosures.
• Focuses on governance, strategy, risk management, and metrics related to climate risks and opportunities.
• Increasingly mandated by governments worldwide.
  

2. Global Reporting Initiative (GRI)

• One of the most widely used ESG frameworks globally.
• Covers environmental, social, and governance topics in depth, with a strong emphasis on materiality and stakeholder impact.
• Compatible with multiple regulatory requirements and standards.
  

3. International Sustainability Standards Board (ISSB) IFRS Sustainability Standards

• Formed by the IFRS Foundation to create a global baseline for ESG disclosures.
• ISSB’s IFRS S1 (General Requirements for Sustainability Disclosure) and IFRS S2 (Climate-related Disclosures) are set to become primary reporting standards.
• Expected to be widely adopted.
  

4. Sustainability Accounting Standards Board (SASB)

• Provides industry-specific ESG reporting guidance.
• Helps companies identify financially material sustainability factors relevant to investors.
• Now integrated into ISSB standards.
  

5. CDP (formerly Carbon Disclosure Project)

• Focuses on environmental disclosure, including carbon emissions, water security, and deforestation.
• Used by investors and regulators to assess corporate climate action.
• Aligns with TCFD and ISSB standards.
  

ESG Reporting Standards

Unlike frameworks, ESG reporting standards define specific metrics, methodologies, and disclosures companies should follow when reporting their ESG performance.

1. European Sustainability Reporting Standards (ESRS)

• Developed under the Corporate Sustainability Reporting Directive (CSRD) in the EU.
• Requires comprehensive ESG disclosures aligned with EU Taxonomy and global reporting expectations.
• Applies to approximately 50,000 companies operating in the EU.

2. Greenhouse Gas (GHG) Protocol

• Provides a globally recognised framework for measuring and managing greenhouse gas emissions.
• Defines Scope 1 (direct), Scope 2 (indirect), and Scope 3 (value chain emissions).
• Used in various regulatory and voluntary ESG reporting schemes.
  

3. Science-Based Targets Initiative (SBTi)

• Helps companies set climate goals aligned with the Paris Agreement.
• Provides methodologies for achieving net-zero emissions.
• Recognised by investors and regulators worldwide.
  

ESG Reporting Regulations

ESG reporting regulations are implemented by governments and regulatory bodies and companies must comply.

European Union

• Corporate Sustainability Reporting Directive (CSRD)
  • Requires detailed ESG disclosures under European Sustainability Reporting Standards (ESRS).
  • Applies to EU-listed and non-EU companies with significant operations in Europe.
• EU Taxonomy Regulation
  • Defines sustainable economic activities.
  • Helps businesses and investors avoid greenwashing.
    

United Kingdom

• Sustainability Disclosure Requirements (SDR)
  • Introduces stricter ESG reporting for financial institutions and large companies.
• Mandatory TCFD Reporting
  • Applies to UK-listed companies and financial entities.
• Green Taxonomy (Upcoming)
  • Will align with EU Taxonomy to define sustainable economic activities.
    

United States

• SEC Climate Disclosure Rules (Pending Finalisation)
  • Would require companies to report Scope 1, 2, and, in some cases, Scope 3 emissions.
  • Expected to mandate climate risk disclosures in line with TCFD.
• California Climate Accountability Package
  • Requires companies with over $1 billion in revenue to disclose emissions and climate-related risks.
    

Australia

• Australian Sustainability Disclosure Standards (ASDS) (2024-2025 Implementation)
  • Aligns with ISSB and TCFD for climate-related disclosures.
• Modern Slavery Act
  • Requires businesses to report on supply chain risks related to forced labor.
    

Asia

• China: Green Finance Guidelines, upcoming mandatory ESG disclosures for large firms.
• Japan: TCFD-aligned disclosures required for Tokyo Stock Exchange-listed companies.
• Singapore: SGX Sustainability Reporting, mandatory for publicly listed companies.
• India: Business Responsibility and Sustainability Reporting (BRSR), mandatory for the top 1,000 companies.

Navigating ESG reporting is becoming increasingly complex as governments worldwide introduce new standards and regulations. Businesses must align with major frameworks whilst also ensuring compliance with country-specific regulations.

By adopting robust ESG reporting practices, companies can enhance transparency, attract responsible investment, and mitigate sustainability-related risks.

Using an end-to-end reporting software like neoeco ensures compliance and simplifies and streamlines the entire reporting process - from data collection to creating instant audit-ready reports across multiple frameworks.

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