Issue link: https://resources.tangoanalytics.com/i/1508314
03 A wide range of constituencies including investors, clients, companies, policymakers, regulators, NGOs, and civil society use sustainability reporting to meet their information needs. Some reporting schemas address a broad audience and others cater to the needs of highly specific stakeholders with niche KPIs like financial impact data. Audience and Relevant Stakeholders: 06 A narrow reporting framework may deal specifically with one aspect of the ESG landscape such as reporting on solely climate/environmental metrics. Reporting schemes of a broader scope address the full range of the Environmental, Social, and Governance umbrella, corporate responsibility topics, and Sustainable Development goals. ESG Scope of Reporting: 04 A reporting framework may focus exclusively on sustainability risk factors and metrics that are materially relevant to enterprise value and the financial impacts on the company itself. Or, frameworks may doubly focus on the external impacts a company is having on society and the environment. Only referencing the former constitutes single materiality, and addressing both concepts is considered double materiality. Materiality: 02 These indices give scores on ESG compliance data values of an organization, rank peers against one another, and often look to reporting standards and frameworks to create the rating system and analytics. Companies publish ESG scores from organizations such as Bloomberg, S&P Dow Jones Indices (S&P DJI), and others. Ratings will measure the degree to which a company's economic value is at risk due to ESG factors and therefore whether a company is investable Rankers and Raters: 07 If a framework is flexible, companies drafting reports may have more autonomy in choosing what topics to report on based on their own materiality assessments. More prescriptive standards require more rigid adherence to specific reporting information, topics, or questions. Prescriptive vs. Flexible: 08 It's important to keep in mind that your sustainability data, once gathered, can be used across various different frameworks. For example, the SASB and GRI are currently working together to make it easier for companies to use both sets of standards, which are designed to fulfill different purposes. Companies generally report to or disclose information based on multiple standards at once. Using Multiple Frameworks in Tandem with Each Other: 05 There are several disclosure systems that address the need for industry-specific criteria or rankings. Industry: Understanding the differences between these concepts is crucial in deciphering the various frameworks and piecing together how they overlap or work together in their usefulness to your business. Below is a table cross comparing important frameworks with these defining variables: Sustainability & Energy Management Simplified