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.
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. |
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.