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14 January 2025 Posted by Elite Asia Marketing ESG No Comments

Six Major ESG Frameworks You Need to Know: Which One is Right For You?

It’s one thing to plan an ESG strategy—outlining goals, implementing initiatives, and aiming to improve your ESG rating to gain investor trust. It’s another thing entirely to report your efforts in a way that’s accurate, meaningful, and credible. ESG reporting isn’t always straightforward. While some areas, such as carbon footprint, require meticulous calculations, others—like social initiatives—are more difficult to quantify and translate into a report.

This is where ESG frameworks prove invaluable. Designed by nonprofits, NGOs, and business groups, they provide standardised guidelines to help businesses report ESG performance consistently and credibly. Each framework has its own focus, metrics, and approach, leading to the inevitable question: which one should you use?

With so many options—GRI, GRESB, TCFD, SASB, UNGC, and IIRC—it can feel like sorting through an overwhelming alphabet soup of standards. Let’s break it down and focus on the six most widely used ESG frameworks to help you decide what fits your business best. 

The Big Six ESG Frameworks

Though the ESG reporting landscape is broad, six frameworks dominate the field, offering different strengths depending on your company’s priorities and goals.

GRI (Global Reporting Initiative) is one of the most comprehensive and widely used ESG frameworks. It provides a flexible reporting structure suitable for all industries, with a focus on transparency and stakeholder engagement. GRI framework covers a wide range of sustainability topics, from environmental impact to labour practices. We have covered a detailed guide to GRI reporting standards here. Elite Asia is also part of GRI Certified Community since 2023 in our commitment to take part on sustainability reporting.

GRESB (Global Real Estate Sustainability Benchmark) caters specifically to the real estate sector. It assesses the environmental, social, and governance performance of real estate and infrastructure portfolios, offering a standardised way to compare sustainability efforts within the industry.

TCFD (Task Force on Climate-related Financial Disclosures) concentrates on climate-related risks and opportunities. Its guidelines help companies identify, measure, and disclose the financial impact of climate change on their operations, making it essential for businesses addressing climate risks.

SASB (Sustainability Accounting Standards Board) focuses on financially material ESG factors relevant to specific industries. By linking sustainability efforts directly to financial performance, SASB is particularly useful for companies targeting investors.

UNGC (United Nations Global Compact) aligns ESG reporting with ten universally recognised principles, covering human rights, labour standards, environmental protection, and anti-corruption. It’s ideal for companies seeking to demonstrate alignment with global sustainability goals.

IIRC (International Integrated Reporting Council) promotes integrated reporting, which combines financial and non-financial information to present a holistic view of value creation over time. This framework suits businesses looking to merge ESG performance with financial disclosures.

Infographic - Get To Know ESG Frameworks

What Is the Most Common ESG Framework?

Of these, GRI remains the most widely adopted globally, thanks to its comprehensive coverage and adaptability across industries. However, its broad scope may not be the best fit for every organisation. For instance, companies in the real estate sector may find GRESB more relevant, while those with significant climate-related concerns might prioritise TCFD.

Choosing the most suitable framework often depends on your business’s unique needs and the audience you want to address.

How to Choose the Right ESG Framework

With so many frameworks available, which one is perfect for your company/ organisation? Choosing the right ESG framework starts with understanding your business priorities and aligning them with your sustainability goals. Ask the right questions and narrow your focus, and you will be able to identify the frameworks that best fit your needs.

What Are You Trying to Achieve with Your ESG Reporting?

Begin by defining the purpose of your ESG reporting. Is your goal to enhance transparency and build trust with stakeholders? Are you aiming to attract investors by showcasing your company’s financial resilience and sustainability efforts? Or perhaps your focus is regulatory compliance in a specific region. Clarity on your objectives will help you identify frameworks that align with your intended outcomes.

Consider Your Industry

Your industry can significantly influence the frameworks that suit your business. For example, a real estate company might prioritise GRESB due to its industry-specific benchmarks, while a financial institution may find TCFD invaluable for addressing climate-related risks. Tailored frameworks like these can provide more relevant insights and reporting guidelines compared to broader frameworks such as GRI.

Consider Your Capacity for Reporting

The complexity of data collection and analysis required by ESG frameworks varies. Some, like IIRC, demand significant resources to integrate financial and non-financial information into a unified report. Others, such as SASB, may focus on narrower, industry-specific metrics, making them easier to implement. Evaluate your company’s internal capacity for data management, and don’t hesitate to seek external support if needed.

Decide on Your Materiality Focus

Materiality refers to the ESG factors most relevant to your business and stakeholders. For some organisations, financial materiality—ESG factors directly affecting profitability—is paramount, making SASB a natural choice. Others may prioritise stakeholder materiality, focusing on broader social and environmental impacts that align with GRI or UNGC guidelines. The decision isn’t always binary. Many organisations combine frameworks to address multiple reporting needs, ensuring that their disclosures are both comprehensive and tailored to specific audiences.

Identify the Largest Impact

Every business has areas where it creates the most significant ESG impact, whether positive or negative. Identifying these impact areas can guide your choice of frameworks. For instance, a company with high exposure to climate-related risks might prioritise TCFD, while an organisation with a heavy reliance on physical assets, such as real estate, could benefit from using GRESB to benchmark and improve its sustainability performance.

Still feeling lost? Imagine we’re evaluating an insurance company. This company operates in a sector heavily influenced by climate risks—rising global temperatures, extreme weather events, and sea-level rise are all critical concerns. To manage and disclose these risks effectively, the company could adopt TCFD, which provides a framework for assessing and reporting on the financial impacts of climate change. Pairing TCFD with SASB would further allow the insurer to disclose financially material ESG factors that resonate with investors, such as underwriting policies for carbon-intensive industries.

Can You Use Multiple ESG Frameworks?

Yes, and many companies do. In fact, using multiple frameworks can provide a more comprehensive picture of your ESG performance. For instance, a company might use GRI for broad sustainability reporting, SASB for financially material metrics, and TCFD to address climate-related risks.

The key is to maintain consistency across frameworks. Your reports should complement rather than contradict each other, ensuring they align with your overall sustainability strategy.

Finally, Using ESG Framework to Your Reporting

ESG reporting is more than a regulatory requirement; it’s an opportunity to demonstrate your commitment to sustainability, build trust with stakeholders, and differentiate your business in an increasingly competitive marketplace. Choosing the right ESG framework—or combination of frameworks—allows you to communicate your efforts clearly and effectively.

The abundance of frameworks may seem overwhelming at first, but understanding their unique strengths makes the decision easier. By aligning your choice with your business’s goals, you can turn ESG reporting into a powerful strategic asset.

It is okay you’re not sure where to start. After all, ESG frameworks are very complex and it is impossible to understand everything about them in one sitting–let alone implementing one in your disclosure. Elite Asia’s ESG experts can help you analyse your ESG efforts, identify the most suitable frameworks for your reporting, or even manage the entire ESG reporting process on your behalf. Let us take the complexity out of ESG reporting, so you can focus on making a real impact.

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