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GRI, IRF and SASB: Updated guidance on reporting frameworks

So many frameworks, so little time.

For those tasked with communicating their organization’s sustainability information, these are challenging times. What to communicate and to whom, and which tools to use, always have been pain points. Add to that the recent increases in the types and volume of data; the number of reporting frameworks, standards and recommendations to handle it; and the interest from disparate stakeholder audiences with different needs — all without a significant increase in people dedicated to reporting.

Boards, top management, investor relations and human resource leaders, along with those in sustainability, EH&S and marketing and communications, have become more involved as a result. This has added yet more challenges, such as agreement on approach across the departments involved; and motivating and gathering data from many subject matter experts across an organization.

Here, we briefly compare three of the most globally well-known frameworks (see graphic) and summarize what you need to know to understand the difference and the benefits of using each:

  • GRI: The Global Reporting Initiative puts out the GRI Standards, which provide guidance across environmental, social and economic factors for all stakeholders, including investors, whereas the other major frameworks are primarily investor-focused. Several thousand organizations worldwide use the GRI framework — which is among the most well-known and the standard for the United Nations Global Compact — to issue sustainability reports. For reports led by those outside investor relations, GRI is likely the safest bet — it covers the most categories of sustainability activity, along with room to tell stories behind the data that is more likely to satisfy stakeholders such as customers, employees and NGOs.
  • IIRC: The International Integrated Reporting Council, which puts out the Integrated Reporting Framework (IRF), urges companies to issue "concise" integrated reports (combining traditional, annual financial with ESG data) that detail "… the creation of value in the short, medium and long term." International/global investors, lenders and insurers are the primary audience for these reports. Integrated reporters have been found to be more likely to treat sustainability information as material to investment decisions, making it easier for investors to review such information as part of normal research processes.
  • SASB: The Sustainability Accounting Standards Board issues standards that are more inward-looking, focused more on how sustainability issues affect the company and its financial performance. SASB’s most distinctive contribution are the 70-plus industry categories for which it has developed standards. This, along with SASB materiality maps, may be particularly helpful for newer reporters in determining what is material for reporting, and for more standardized benchmarking. Jennifer Pontzer, managing director and COO at ISOS Group, indicates that more reporters are including SASB metrics within their sustainability reports and finding value in its materiality maps.

Other frameworks and questionnaires of note include the CDP, Dow Jones Sustainability Index (DJSI), and the U.N. Sustainable Development Goals (SDGs). Unlike GRI, SASB and IIRC, CDP does not gather data or provide guidance on social or certain types of environmental factors. Also different is that CDP provides a questionnaire, as does the DJSI, to gather the data it does collect for its investor audiences. The SDGs are a set of global goals for sustainable development and are very influential — and many companies are mapping their efforts to specific SDGs in their reporting.

Key audiences for sustainability information include customers, investors, NGOs, governments and employees. However, not all of these stakeholders get their sustainability information directly from company reports. Consumers and other "non-professional" audiences continue to rely primarily on what they find in digestible bits in online search efforts, social and traditional media, the corporate website and marketing communications.

Without a concerted effort, a report that is dozens of pages won’t appeal to a casual reader, although with planning and use of multiple levels of information, pieces can fuel targeted content bites for multiple platforms and channels, while the report itself becomes scannable.

Without a concerted effort, a report that is dozens of pages won’t appeal to a casual reader.
More recently, investors, especially institutional investors with longer-term time horizons, increasingly have turned to environmental, social and governance (ESG) data sources, such as MSCI and Sustainalytics. These firms digest company reports, but also collect and analyze many other public data sources to provide specific summaries and data sets for what investors need in their decision-making. Companies sharing data and analysis themselves are helping frame that discussion.

So many frameworks, what to do?

In the interests of helping organizations sort through it all and maximize reporting effectiveness, the Corporate Reporting Dialogue (CRD) seeks to "identify [how] respective frameworks, standards and related requirements can be explained and aligned … through its Better Alignment Project" (BAP). The CRD recently reported its initial BAP findings. The report is consistent with what we describe above and includes a helpful set of FAQs that show how the frameworks and standards can be used individually and together. Guidance from those FAQs show:

  • how the main existing frameworks and standards are substantially aligned and complement each other;
  • why GRI Standards are the most relevant for developing a separate sustainability report serving the needs of multiple stakeholders; and
  • why SASB is one of two sustainability frameworks and standards designed specifically for communication of financially material issues to investors.

Meanwhile, the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) released its annual update in June. The TCFD is a widely supported effort, although early indications are that companies need guidance in integrating its recommendations.

That’s where the standards and frameworks play an immediate role. CRD’s members have mapped their frameworks against the TCFD recommendations and are identifying opportunities for alignment of metrics where possible across all their reporting frameworks. They’ve found that they have no conflict with TCFD’s seven principles for effective disclosure; and that they are well aligned with the TCFD’s 11 recommended disclosures.

Watch for TCFD's scenario analyses recommendations to play a role in sustainability reporting beyond climate impacts, given their ability to make sustainability impacts and their risks, costs and opportunities more tangible. These analyses will be useful for all stakeholders in communicating and prioritizing common goals.

The State of Integrated and Sustainability Reporting 2018 (Sustainable Investments Institute) revealed that nearly all (97 percent) of S&P 500 reporting companies chose to "customize extant sustainability reporting models — in style, format and content — instead of closely following any one framework." So, many reporters are finding their goals best met by taking what works for them from the different frameworks — something the frameworks themselves, through the CRD, suggest is a good approach.

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