ESG Explained: Understanding the Framework, Standards and Gail’s

Key Differences Between ESG Frameworks and Standards

Have you ever felt confused about the terms ESG frameworks and standards? They are often used interchangeably, but they serve clear purposes in implementing sustainable solutions and sustainability reporting. If you have wondered about these terms, here’s a breakdown of their differences:

Definition and Purpose

• Frameworks:
  
  • Provide guidelines or overarching principles to structure ESG reporting.
  • Focus on what to report and how to align disclosures with specific goals or audiences.
  • Flexible and adaptable to different industries and organisations.
  • Example: GRI, TCFD, SASB.
• Standards:
  
  • Provide specific, measurable criteria or rules to ensure consistent and comparable ESG reporting.
  • Focus on how to report, specifying metrics, methodologies, and disclosures.
  • More rigid and detailed, ensuring uniformity across reports.
  • Example: ISO 14064 (Greenhouse Gas Accounting), GHG Protocol.

Key Differences

Aspect	Frameworks	Standards
Purpose	Guide reporting structure	Ensure consistency and comparability
Flexibility	Broad principles, adaptable	Specific and detailed requirements
Scope	High-level focus on what to report	Narrow, metric-focused
Examples	GRI, SASB, TCFD, CDP	GHG Protocol, ISO 14064, SASB metrics
Industry Usage	Broad applicability, sector-agnostic	Often industry-specific
Output	Narrative-focused reports	Metric-driven, comparable data

Examples of Frameworks vs. Standards

Framework Examples

• GRI (Global Reporting Initiative): High-level guidance to report on ESG impacts (broadly structured).
• TCFD (Task Force on Climate-related Financial Disclosures): Recommends how to disclose climate risks and opportunities.
• SASB (Sustainability Accounting Standards Board): Combines framework and industry-specific metrics.

Standard Examples

• GHG Protocol: Offers standardised methodologies for calculating and reporting greenhouse gas emissions.
• ISO 14064: Defines requirements for carbon reporting and verification.
• IFRS S1 and S2 Standards (by ISSB): Provides standardised sustainability and climate-related financial disclosures.

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Standards and Framework Use Cases

PLease note that your idustry and often, regulatory requirement will determine the structure and methodologies you need for a trustworthy and effective reporting.

Scenario	Framework or Standard?	Reason
Structuring a report to meet stakeholder expectations	Framework	Offers flexibility for tailoring reports.
Measuring and reporting carbon emissions	Standard	Provides specific methodologies for consistency.
Aligning disclosures with climate-related risks	Framework (e.g., TCFD)	Focuses on high-level strategy and governance.
Reporting compliance with emissions reduction targets	Standard	Ensures measurable, comparable data.

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Complementary Nature and Use

Frameworks and standards are complementary rather than exclusive:

• Frameworks help organisations structure and decide what to include in their report.
• Standards ensure accuracy, reliability, and comparability of the data disclosed.

For example, a company may use GRI to guide its reporting structure, SASB for sector-specific topics, and the GHG Protocol to report its carbon emissions. Although the high degree of variability in the use cases between standards and frameworks can present its own dificulty, however, once you found the appropriate standard and framework for your sector, you can focus on the long term effect of developing a low carbon, more sustaianble buisness operation.