4 Sustainability Reporting Frameworks to Help Your Organisation Set Targets
SBTi, GRI, ISO & SASB.
There is an increasing number of reporting frameworks and standards being introduced on a global scale, as Environmental, Social, and Governance (ESG) and sustainability reporting comes to the forefront of business agendas.
Frameworks provide principles-based guidance on how information is structured, and prepared, and under which broad topics. Standards complement this by providing in depth replicable requirements for what metrics should be reported. As ESG plays an increasingly prominent role in both the public and private spheres, organisations, businesses and EnergyElephant users are often required to or are advised to adhere to one or more of these reporting frameworks. We have compiled a short guide of common reporting frameworks and their uses, that are widely implemented on a global scale.
Science-based targets initiative (SBTi) provide a clearly-defined pathway for companies to reduce greenhouse gas (GHG) emissions, helping prevent the worst impacts of climate change and future-proof business growth. These targets are in line with the Paris Agreement goals, with a 1.5 degrees Celsius warming goal. Under SBTi, organisations will follow the GHG Protocol Corporate Standard, both Scope 1 and Scope 2. All major private business are encouraged to join, however, SBTi does not currently assess targets for cities, local governments, public sector institutions, educational institutions or non-profit organizations. SBTi recommendations are important for transparency and best practices, but are not required by law.
The structure of the SBTi process is detailed here:
Step 1: Commit, submit a letter establishing your intent to set a science-based target.
Step 2: Develop, work on an emissions reduction target in line with the SBTi’s criteria. Organisations have 24 months to submit their target.
Step 3: Submit, present your target to the SBTi for official validation, which will go through an initial screening to ensure basic criteria are met.
Step 4: Validation, once a target submission passes the initial screening, companies will be asked to sign the target validation service contract. The SBTi will then assess the submitted targets and communicate its decision within 30 business days of contract execution.
Step 5: Communicate, organisations can now announce their official science-based target and inform stakeholders.
Step 6: Disclose, report on company-wide emissions and track target progress annually.
The Global Reporting Initiative (GRI) Standards are the first global standards for sustainability reporting, they are the most widely used framework, and are overlooked and defined by the Global Sustainability Standards Board (GSSB). The GRI Standards are a modular system comprising three series of Standards: the GRI Universal Standards, the GRI Sector Standards, and the GRI Topic Standards. Each Standard contains disclosures. The disclosures can have requirements and can also include recommendations. Requirements list the information an organization must report or instructions it must comply with and report in accordance with the GRI Standards. Recommendations indicate that certain information, or a particular course of action, is encouraged though not compulsory.
The GRI Sustainability Reporting Standards are for voluntary use by organisations for reporting on the economic, environmental, and social dimensions of their activities, products, and services. Organisations can either use the GRI Standards to prepare a sustainability report in accordance with the Standards or use selected Standards, or parts of their content, to report information for specific users or purposes, such as reporting their climate change impacts for their investors and consumers.
Under GRI Standards the organisation reports on all its material topics and related impacts and how it manages these topics. The report may be published in various formats, it can also be contained in whichever report the organisation chooses, i.e. in the annual report or as a standalone sustainability report. Reports must contain a GRI content index, which provides an overview of the reported information. The content index makes reported information traceable and increases the report’s credibility and transparency.
The International Organization for Standardization (ISO) created ISO 14001 Environmental Management, which is an internationally agreed standard that sets out the requirements for an environmental management system. It helps organisations improve their environmental performance through more efficient use of resources and reduction of waste. It does this by providing a framework that any organisation can opt to voluntarily follow and implement.
ISO 14001 is voluntary and aimed at allowing organisations to effectively monitor their environmental-related risks and opportunities. ISO 14001 can be certified through a third party audit, however, ISO does not perform certification and accredited certification to ISO 14001 is not a requirement. Organisations can use the standard without going through the accredited certification process.
The Sustainability Accounting Standards Board (SASB) set standards focused on the financial impacts of sustainability. There are 77 standards, that focus on different sectors within different industries, i.e. organisations follow the standards that relate to their specific sector. SASB Standards are designed for communication by companies to investors about how sustainability issues impact long-term enterprise value. Standards provide specific, detailed, and replicable requirements for what should be reported for each topic, including metrics. The SASB standards provide guidance on what information should be disclosed, as well as recommendations on how and where this information should be disclosed. SASB standards can be used by organisations alongside other frameworks to disclose ESG metrics and meet the needs of a multifaceted audience.
By reporting under these widely used frameworks and standards, organisations can reap a variety of benefits. It can aid in ensuring compliance with current and future statutory and regulatory requirements. It can provide a competitive and financial advantage through improved energy effectiveness as well as other ESG measures. It can also improve stakeholder confidence and company reputation. It offers all these business advantages whilst also allowing your organisation to play its part in reducing environmental impacts on a global scale. By adhering to these framework discussed, you are helping both your organisation and the planet.