ESG Frameworks
Article

ESG Frameworks

September 13, 2022

The number of ESG (Environmental Social Governance) frameworks is overwhelming. How do you know which is best for your company and stakeholders? In this guide, we discuss the basics of ESG frameworks – what they are, the different types available, their importance, and the steps necessary to select a framework.

Table of Contents


What Is an ESG Framework?

ESG frameworks (also referred to as standards or guidelines) provide organizations with a structure for planning, measuring, and reporting upon ESG initiatives. They simplify the ESG reporting process by highlighting key factors organizations should focus on and measure. These frameworks include standards or goals that can be used to gauge effectiveness of an ESG strategy and highlight what should be included with ESG disclosures


What Are the Different Types of ESG Frameworks?

There are a few different types or categories of frameworks that organizations can choose from depending on their needs, goals, and potential requirements. We review assessment, reporting, disclosure, and scoring frameworks below.

ESG Assessment Frameworks

Assessment frameworks are used most often to evaluate materiality or risk up front as part of ESG strategy. Some ESG consulting firms have even developed their own assessment frameworks.

ESG assessment framework examples include the B Impact Assessment and S&P Global Corporate Sustainability Assessment (CSA).

ESG Reporting Frameworks

Reporting frameworks (also sometimes referred to as voluntary or guiding frameworks) are used to guide organizations in ESG strategy and reporting efforts by outlining standards or benchmarks to consider. Most of the time when you hear “ESG framework,” “reporting” is the implied context. Many organizations use these frameworks to help develop their ESG strategy and measure their success. ESG scores are typically not included within these frameworks.

ESG reporting framework examples include GRI and UN SDG. See our Top ESG Reporting Frameworks comparison below for more examples.

ESG Disclosure Frameworks

Disclosure frameworks (also referred to as governance or regulatory frameworks) are reporting frameworks that additionally guide business compliance with ESG regulations and requirements. Currently, the US does not require disclosure. However, some countries do have requirements. See ESG Disclosure Regulation for details.

For example, the European Union (EU) utilizes the SFDR (Sustainable Finance Disclosure Regulation) framework, and Australia uses the NGER (National Greenhouse and Energy Reporting) framework. Some additional ESG disclosure framework examples include GRI, SASB, and TCFD.

ESG Scoring Frameworks

Scoring frameworks assist ESG benchmarking through measurable ratings. Many of the frameworks included in this category provide scorecards or ratings after an ESG assessment or survey is completed. These metrics are then used to benchmark organizations against others and can be disclosed with reports as ESG scores.

ESG scoring framework examples include CDP and S&P Global.

ESG Combination Frameworks

Some ESG frameworks combine the types mentioned above. For example, GRI and TCFD are both reporting and disclosure frameworks. CDP is an assessment, reporting, disclosure, and scoring framework. B Impact and S&P Global are both assessment and scoring frameworks. Keep this in mind when selecting an ESG framework best for you.


Why Is an ESG Framework Important?

Frameworks are vital to help you navigate the complex realm of ESG.

  • Understand material impact and risks
  • Learn standards and guidance for reporting
  • Understand ESG factors with respect to business financial performance
  • Help translate sustainability factors into long-term value
  • Measure impact that can be compared with peers
  • Communicate effectively with stakeholders
  • Meet regulatory requirements

Top ESG Frameworks

Here’s our high-level comparison of the most popular ESG frameworks. Details for each framework follow the infographic.

Top ESG Frameworks Infographic

Want to display this infographic on your site? Copy and paste the following code. Be sure to include attribution to armaninollp.com with this graphic.

Details on the most popular ESG frameworks below, in alphabetical order:


B Corp Impact Assessment

  • Framework Type: Assessment, Scoring
  • Audience: For-profit organizations that wish to plan or measure how business performance impacts society and the environment. Suits a broad stakeholder audience and those working toward B Corp certification.
  • Disclosure: No
  • ESG Score: Yes (B Impact)
  • Certification Available: Yes - B Corp Certification
  • Limitations: Only available in for-profit sectors; nonprofit and government entities are not eligible. Very resource and time-intensive to complete. The assessment is not free.
  • Cost: $150 USD non-refundable fee for B Impact Assessment submission. For certification, annual fees start at $2,000/year and go up based on annual sales revenue. See detailed B Corp fee structure.
  • Reporting Process: Companies complete the B Impact Assessment to receive a peer comparison report and use SDG Action Manager and B Corp certification resources to assist reporting. (“SDG Action Manager” is a joint initiative between B Lab and UN Global Compact to help plan and track initiatives tied to UN SDGs.)

    B Impact Assessment includes some industry-specific questions. Industries that have a greater carbon footprint have the potential to earn more points for their impact score. Thus, a manufacturer of goods like Patagonia has a higher potential score than a service provider like Armanino.

CDP Framework

(Formerly “Carbon Disclosure Project”)

  • Framework Type: Assessment, Reporting, Disclosure, Scoring
  • Audience: Any organization, city, state, or region looking to report on environmental factors for a stakeholder audience of investors, lenders, policymakers, and customers while complying with Task Force on Climate-related Financial Disclosure (TCFD) recommendations.
  • Disclosure: Yes
  • ESG Score: Yes - CDP Score
  • Certification Available: No
  • Limitations: Primary focus on environmental factors and some governmental factors as it pertains to the environment. Little to no focus on social. Very resource and time-intensive to complete.
  • Reporting Process: Companies use the questionnaires -- CDP Climate Change, CDP Forests, and CDP Water Security -- along with the CDP framework to guide reporting which is fully aligned with TCFD recommendations. *Submit questionnaires by July 27, 2022 to be eligible for 2022 scoring.

Note: CDP is helping inform global climate standards as part of the new ISSB (International Sustainability Standards Board).


CDSB Framework - Climate Disclosure Standards Board

  • Framework Type: Reporting, Disclosure
  • Audience: Any organization looking to report on environmental and social data as part of corporate reports (e.g., annual reports, Form 10-K) for a broad stakeholder audience while complying with TCFD recommendations.
  • Disclosure: Yes
  • ESG Score: No
  • Certification Available: No
  • Limitations: Framework is being rolled into the new ISSB standard; website is no longer being updated.
  • Cost: Free and available online.
  • Reporting Process: Companies use the CDSB framework to guide reporting and disclosure in accordance with TCFD recommendations. Specific guidance is available for climate, water, biodiversity, and social initiatives.

Note: On Jan 31, 2022, CDSB was consolidated into the new ISSB (International Sustainability Standards Board).


GRI Framework - Global Reporting Initiative

  • Framework Type: Reporting, Disclosure
  • Audience: Companies seeking industry-specific guidance across 40 sectors on sustainability reporting for a broad stakeholder audience.
  • Disclosure: Yes
  • ESG Score: No
  • Certification Available: Yes - GRI Professional Certification
  • Limitations: Very resource and time-intensive to complete. Requires comprehensive economic, social, environmental data.
  • Cost: Free and available online
  • Reporting Process: Companies follow GRI standards to develop their own sustainability reports and disclosures.

61% of European sustainability reporters use the GRI framework.
- Source: LSEG Guide to ESG Reporting


Integrated Reporting Framework - IIRC (International Integrated Reporting Council)

  • Framework Type: Reporting
  • Audience: Companies seeking a standalone report format that integrates sustainability and financial reporting for a broad stakeholder audience.
  • Disclosure: No
  • ESG Score: No
  • Certification Available: No
  • Limitations: IIRC just merged with ISSB, and the International Sustainability Standards Board reporting requirements are not yet complete.
  • Cost: Free and available online
  • Reporting Process: Companies use the Integrated Reporting Framework to complete reporting.

In 2021, IIRC and SASB merged to become the Value Reporting Foundation (VRF). In June 2022, VRF merged into IFRS (International Financial Reporting Standards) as part of the new ISSB (International Sustainability Standards Board). ISSB plans to build upon the “Integrated Reporting Framework” when defining its global standards for sustainability disclosure reporting.


SASB Framework - Sustainability Accounting Standards Board

  • Framework Type: Assessment, Reporting, Disclosure
  • Audience: Companies seeking industry-specific guidance in reporting primarily for financial analysts, investors, and policymakers. (SASB includes ESG issues relevant to financial performance for 77 industries.)
  • Disclosure: Yes
  • ESG Score: No
  • Certification Available: No
  • Limitations: SASB just merged with ISSB, and the International Sustainability Standards Board reporting requirements are not yet complete.
  • Cost: Free and available online
  • Reporting Process: SASB Materiality Finder is used to assess industry-specific ESG issues. Organizations then follow SASB standards to develop their own reports and disclosures.

In 2021, SASB and IIRC merged to become the Value Reporting Foundation (VRF). In June 2022, VRF merged into IFRS (International Financial Reporting Standards) as part of the new ISSB (International Sustainability Standards Board). ISSB plans to build upon SASB standards when defining its global standards for industry-specific sustainability disclosures.


S&P Global Corporate Sustainability Assessment (CSA)

(Formerly known as “SAM.” Acquired by S&P in Jan 2020.)
  • Framework Type: Assessment, Scoring
  • Audience: Companies seeking industry-specific reporting for financial analysts, lenders, and investors that desire to see their performance compared to other organizations.
  • Disclosure: No
  • ESG Score: Yes - CSA Score
  • Certification Available: No
  • Limitations: Framework is focused around the assessment with no specific guidance for reporting or disclosure regulations.
  • Cost: FREE assessment as long as the company is willing to have their data published on the S&P Global platform.
  • Reporting Process: Companies complete one of 61 industry-specific questionnaires as part of the S&P Global Corporate Sustainability Assessment and receive a report with benchmarks.

TCFD Framework - Task Force on Climate-Related Financial Disclosures

  • Framework Type: Reporting, Disclosure, Scoring
  • Audience: Companies reporting for lenders, insurers, investors, and regulators, especially those conducting business within the UK.*
  • Disclosure: Yes
  • ESG Score: Yes (Links to CDP Score)
  • Certification Available: No
  • Limitations: Climate and governance focus only.
  • Cost: Free and available online
  • Reporting Process: Companies follow TCFD recommendations (Oct 2021 - PDF) to develop their own reports and disclosures. (The 2021 recommendations expand upon to the 2017 edition to include guidance for 8 industries or sectors.)

Note: *The UK is considering adopting TCFD recommendations in its legislation. The US's SEC Climate Disclosure rule is based on TCFD. This framework is also informing climate disclosure standards for the ISSB (International Sustainability Standards Board).


UN SDG Framework - United Nations Sustainable Development Goals


WEF (World Economic Forum) Stakeholder Capitalism Metrics

  • Framework Type: Reporting
  • Audience: Companies seeking a framework with quantifiable metrics to use with reporting for a broad stakeholder audience.
  • Disclosure: Yes
  • ESG Score: No
  • Certification Available: No
  • Limitations: WEF (World Economic Forum) metrics draw from multiple other sources (e.g., GRI, SASB, WBCSD, CDSB, EPIC, etc.), so revisions to the framework can come from multiple directions.
  • Cost: Free and available online
  • Reporting Process: Companies follow the Stakeholder Capitalism Metrics to develop reports.

Note: WEF is helping to inform metrics for the new ISSB (International Sustainability Standards Board).


ISSB (International Sustainability Standards Board) Sustainability Disclosure Standards ** NEW **

  • Framework Type: Reporting, Disclosure
  • Audience: Companies seeking standardized reporting for financial analysts and investors.
  • Disclosure: Yes
  • ESG Score: TBD
  • Certification Available: Not currently planned
  • Limitations: ISSB was newly formed in 2022 with standards, resources, and tools still in development.
  • Cost: Free and available online (anticipated availability at end of 2022)
  • Reporting Process: TBD. (See ISSB FAQs for latest updates.)

In 2022, the International Sustainability Standards Board (ISSB) newly formed as a global initiative to define better standards for sustainability and ESG disclosure. It’s a sister body to the International Accounting Standards Board (IASB.) The ISSB standards aim to build upon the following frameworks:

  • CDSB Framework
  • Integrated Reporting Framework
  • SASB Standards
  • TCFD Recommendations
  • WEF Stakeholder Capitalism Metrics

ISSB recommends that companies “continue using their voluntary frameworks and guidance as appropriate.” Using frameworks from the list above will likely aid an easier transition when the new standards are available.


How to Choose the Best ESG Framework

Companies must take time to consider their options before deciding which framework is the best fit. There are a few key steps to take during this process:

  1. Consider disclosure requirements: Companies who must disclose ESG initiatives should first choose a framework that meets reporting and disclosure standards. These requirements vary by country.
  2. Consider ESG goals: Companies must consider their overarching ESG goals first. The chosen ESG framework should provide standards that align with those goals. ESG goals can be determined by completing an ESG materiality assessment and defining an ESG strategy.
  3. Consider certification availability. ESG is a complex ever-changing space. Certification process can internally help educate your organization while publicly demonstrating your commitment to ESG policy and continuous improvement.
  4. Analyze industry and business model fit: Most ESG frameworks are designed for all industries. However, some are a better fit for specific business models, locations, or other factors. The GRESB Framework uniquely provides guidance for the real estate industry. SASB and GRI Frameworks include industry-specific materiality issues for a wide variety of industries, but are not focused on any single industry.
  5. Select a framework relevant for the target audience: The framework organizations choose depends greatly on whom they report to. For example, investors might want to see more in-depth detail about ESG goals and performance than employees. Regulators and insurers might want to see more about material usage and risk management.
  6. Choose based on impact focus. Frameworks like CDP, SASB, and TCFD focus on ESG factors that influence business financial health. While B Corp, GRI, and UN SDGs focus on how the business can impact ESG. Financial materiality is a great place to start; companies should expand their approach and framework toolset as their ESG journey matures.
  7. Do NOT limit yourself to one framework. Many companies use multiple frameworks to optimally aid assessments, strategy, and reporting. (See ESG reporting examples for samples of different ESG framework combinations.)

Ready to Select Your ESG Framework?

Selecting the right framework for building your ESG program and reports can be a challenge. Armanino is experienced with numerous, diverse frameworks. Contact our ESG consultants today to help determine the best ESG frameworks for your business.

ESG Questions?

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From risk assessments and framework selection to report guidance and independent assurance of data, our team can assist your ESG strategy and efforts.