Understanding the alphabet soup of ESG reporting
Here’s a note from Prerana Tirodkar:
Understanding the alphabet soup of ESG reporting and acronyms:
1. ISSB (International Sustainability Standards Board) was formed to unify sustainability disclosure standards.
2. Fundamentally, there are four main categories in this alphabet soup: standards, frameworks, ratings, and indices.
➡ Standards that govern the metrics and provide specific rules for ESG measurement and disclosure.
eg: Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB).
➡ Frameworks are high-level guidelines for how information should be disclosed.
eg: Carbon Disclosure Standards Board (CDSB), International Integrated Reporting Council (IIRC), Carbon Disclosure Project (CDP), and Task Force on Climate-related Financial Disclosures (TCFD)
➡ Ratings include agencies that collate information through surveys and other methodologies to gather ESG data from different organizations.
➡ Indices compile data into a single metric to represent a particular market or strategy.
eg: Dow Jones Sustainability Indices (DJSJ), FTSE4GOOD and Bloomberg