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ESG Frameworks

ESG frameworks

What are ESG frameworks?

ESG frameworks are structured frameworks or guidelines that provide a standardized approach for companies to assess, measure, and report their Environmental, Social, and Governance (ESG) performance.

These frameworks help companies organise and disclose relevant information on their sustainability practices, allowing stakeholders to compare and evaluate ESG performance across different organisations consistently.

There are several prominent ESG frameworks commonly used by companies:

Global Reporting Initiative (GRI)

GRI provides a comprehensive framework for sustainability reporting, covering a wide range of ESG topics. It offers guidelines and indicators to assist companies in disclosing their economic, environmental, and social impacts.

Sustainability Accounting Standards Board (SASB)

SASB provides industry-specific standards for reporting financially material ESG information. It focuses on identifying and reporting ESG factors most likely to impact the financial performance of companies within specific industries.

Task Force on Climate-related Financial Disclosures (TCFD)

TCFD provides recommendations for companies to disclose climate-related financial risks and opportunities. It encourages companies to assess and report on climate-related risks in their governance, strategy, risk management, and metrics.

Carbon Disclosure Project (CDP)

CDP focuses specifically on carbon emissions and climate change-related disclosures. It requests companies to report their environmental impact, carbon footprint, and climate change-related risks and opportunities.

United Nations Sustainable Development Goals

The SDGs provide a set of 17 global goals to address major social and environmental challenges, such as poverty, inequality, climate change, and sustainable consumption. Companies can align their sustainability efforts with specific SDGs and report their contributions to the goals.

These frameworks provide guidance on relevant ESG indicators, reporting requirements, and disclosure methodologies. They help companies structure their ESG reporting, enhance transparency, and enable stakeholders to assess and compare ESG performance across organisations. Companies can choose to adopt one or multiple frameworks based on their specific needs, industry focus, and stakeholder expectations.
Benchmark

Benchmarking Voluntary ESG Frameworks

Voluntary ESG reporting frameworks provide flexibility for organisations to choose the relevant questions and topics to report on based on their industry and materiality. Here are some notable voluntary ESG frameworks

Global Real Estate Sustainability Benchmark

GRESB is a global tool used predominately by investors to assess the sustainability performance of real estate and infrastructure portfolios and assets worldwide. GRESB Assessments provide investors and asset managers with material insights into the sustainability performance of a company’s real assets. These performance insights are aligned with international reporting frameworks such as the GRI and Principles for Responsible Investment (PRI). Assessment participants receive comparative business intelligence on where they stand against their peers, a roadmap with actions they can take to improve their ESG performance and a communication platform to engage with investors. Investors use the ESG data and GRESB analytical tools to improve the sustainability performance of their investment portfolios, engage with managers and prepare for increasingly rigorous ESG obligations.

​CDP Climate A List

CDP’s Climate A List recognizes companies leading in climate action and disclosure. It assesses companies’ efforts in addressing climate change risks and opportunities, focusing on greenhouse gas emissions reduction, energy efficiency, and climate governance.

These benchmark frameworks help investors, stakeholders, and companies assess ESG performance, identify leaders in sustainability, and make informed decisions. Companies can utilize these frameworks to benchmark their ESG practices, identify areas for improvement, and strive for better performance compared to peers.
Voluntary ESG Reportings

Voluntary ESG Frameworks

Voluntary ESG reporting frameworks provide flexibility for organisations to choose the relevant questions and topics to report on based on their industry and materiality. Here are some notable voluntary ESG frameworks

Global Reporting Initiative (GRI)

GRI offers globally applicable guidance through its standards, which cover materiality, management reporting, and disclosure for a comprehensive range of sustainability issues. Many organisations use GRI Standards to prepare their sustainability reports, selecting the relevant topic-specific standards to report on material topics.

Task Force on Climate-related Financial Disclosures (TCFD)

TCFD focuses specifically on climate-related risks and opportunities. It helps organisations articulate the impact of ESG performance on future financial performance and value creation. TCFD's recommendations address governance, strategy, risk management, and metrics/targets related to climate-related issues.

Value Reporting Foundation (VRF)

VRF resulted from the merger of SASB and IIRC. It sets standards for disclosing financially material sustainability information to investors. SASB Standards cover ESG issues across 77 industry standards, enabling organisations to share outward ESG impacts with investors, debt holders, and internal stakeholders.

Each framework operates differently:

  • GRI Standards provide comprehensive guidance for material topics, with organisations selecting relevant standards to report on economic, environmental, and social aspects.
  • TCFD focuses on climate-related risks and opportunities, addressing governance, strategy, risk management, and metrics/targets related to climate impacts.
  • SASB Standards offer specific industry-based standards to disclose ESG metrics, enabling organisations to report transparently and relevantly to investors.
Companies such as asset management firms, manufacturing giants, and specialised industries utilize these frameworks to disclose ESG metrics and communicate their sustainability performance to stakeholders. Selecting the appropriate framework depends on the organisation’s reporting objectives, material topics, and stakeholder requirements.
Framework INDICES

Main Sustainability Indices and Ratings

Dow Jones Sustainability Indices (DJSI)

DJSI evaluates the sustainability performance of companies based on economic, environmental, and social dimensions. It ranks companies within various industry sectors, providing an indication of their sustainability leadership.

MSCI ESG Research

MSCI ESG Research offers ESG ratings and indices that assess companies' exposure to ESG risks and opportunities. These ratings and indices serve as benchmarks for investors looking to incorporate ESG considerations into their investment decisions.

FTSE4Good Index Series

The FTSE4Good Index Series measures the ESG performance of companies based on globally recognized standards. It includes criteria related to environmental sustainability, social responsibility, and corporate governance.

Corporate Knights Global 100

The Corporate Knights Global 100 is an index that ranks the world's most sustainable companies. It evaluates companies based on a range of ESG indicators, including resource management, employee diversity, clean revenue, and more.

Sustainalytics

Sustainalytics provides ESG research, ratings, and indices that assess companies' ESG performance. These benchmarks enable investors to compare companies based on various ESG criteria and identify sustainability leaders.

ESG Frameworks

Choosing the right ESG Framework

Selecting the appropriate ESG (Environmental, Social, and Governance) framework for your organisation involves considering various factors. Here are key considerations to help you choose the right ESG framework
Relevance to Your Industry
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Look for frameworks that are relevant to your industry and specific ESG focus areas. Different frameworks may have sector-specific indicators and guidelines that align with your organisation's operations and impact.
Reporting Requirements
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Consider the reporting requirements of the framework. Assess whether the framework's reporting standards align with your organisation's capacity to collect and report data effectively. Evaluate the level of transparency and disclosure expected by the framework.
Materiality & Stakeholder Expectations
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Consider the reporting requirements of the framework. Assess whether the framework's reporting standards align with your organisation's capacity to collect and report data effectively. Evaluate the level of transparency and disclosure expected by the framework.
Recognition and Credibility
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Consider the recognition and credibility of the framework within your industry and among investors, stakeholders, and peers. Widely recognized frameworks often provide more credibility and comparability in evaluating ESG performance.
Compatibility with Other Frameworks
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Evaluate whether the framework aligns or complements other frameworks or reporting initiatives that your organisation may be using. Integration with other frameworks can enhance consistency and reduce duplication of efforts.
Reporting and Data Collection Efforts
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Assess the feasibility and resources required to implement the framework. Consider the availability and accessibility of the data required by the framework, as well as the tools and systems needed for data collection, analysis, and reporting.
Investor and Stakeholder Preferences
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Consider the preferences of your investors, stakeholders, and customers. Some stakeholders may have specific expectations or preferences for certain ESG frameworks, and aligning with their preferences can enhance stakeholder engagement and trust.
Evolving Standards and Regulatory Landscape
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Stay informed about emerging ESG reporting standards and regulatory requirements. Choose a framework that is adaptable to evolving standards and can help your organisation stay ahead of regulatory changes.
Frameworks

Mandatory ESG Frameworks

Regulatory ESG reporting frameworks differ from benchmark frameworks as they require all responses, without necessarily providing a scoring mechanism. These frameworks are mandated by government bodies.

Sustainable Finance Disclosure Regulation (SFDR)

SFDR aims to standardize ESG reporting for financial products and entities within the EU. It requires reporters to publish a Principal Adverse Impact (PAI) statement that discloses various quantitative indicators, including weighted averages of ESG metrics for investments and emissions from their own activities. SFDR aligns with the EU taxonomy and the proposed EU Corporate Sustainability Reporting Directive (CSRD) to advance sustainable finance in the EU.

Corporate Sustainability Reporting Directive (CSRD)

CSRD sets rules for organisations to report sustainability disclosures across environmental and social issues within the European Union. It requires organisations to report according to European Sustainability Reporting Standards (ESRS). CSRD emphasizes the double materiality concept, considering financial and societal impacts. It includes reporting on business strategy to mitigate risks related to environmental and social issues, and it values social metrics such as employee health, human rights, and anti-corruption. CSRD applies to EU companies, EU subsidiaries of non-EU companies, and non-European companies with significant EU presence.

Streamlined Energy and Carbon Reporting (SECR)

SECR is the UK government’s guidance for organisations required to disclose their energy use, GHG emissions, and related information. It applies to quoted companies, large unquoted companies, and limited liability partnerships. Quoted companies must disclose energy use, Scope 1 and 2 GHG emissions, and at least one emissions intensity metric. Unquoted large companies and LLPs must report UK energy use, associated GHG emissions, and at least one intensity metric.

National Greenhouse and Energy Reporting (NGER)

NGER is Australia’s national framework for reporting company information on greenhouse gas (GHG) emissions, energy production, and consumption. Regulated by the Clean Energy Regulator, it collects data on GHGs such as CO2, CH4, N2O, SF6, and specified hydrofluorocarbons and perfluorocarbons. The data must enable external audits to verify its relevance, completeness, consistency, transparency, and accuracy.

Regulatory ESG reporting frameworks differ from benchmark frameworks as they require all responses, without necessarily providing a scoring mechanism. These frameworks are mandated by government bodies.

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We are an exclusive Sustainability and ESG Executive Search and Recruitment Agency, offering both permanent and temporary contracts recruitment solutions, across all sectors. We assist employers find their next great hire in ESG and Sustainability Integration/ Green Energy & CleanTech/ Responsible Investment, Sustainable Finance & Impact Investing.

The Paris Agreement at COP21 identified capacity building as a core challenge our governments, institutions, organisations and civil society need to overcome to build a sustainable world.
Companies need to build business strategies and develop activities to keep growing and create value for their shareholders without exhausting resources or harming future generations. Therefore, engaging in building a decarbonised and equitable economy is at the core of their mission and success in the long term. Their ability to build resilience of human and ecological systems will enable them to navigate this ever-evolving world.
As a recruitment agency, we truly believe, we have a substantial part to play in equipping those thriving businesses with the best candidates to conquer those challenges.
Our purpose is to support businesses in their sustainability journey by connecting them with the best talents in the ESG and Sustainability job market.
We focus to provide tailored solutions to our clients’ needs and enhance candidates’s experience in finding their ideal jobs.

Qualifications and Education: Building Expertise in the Field

In terms of qualifications, academic programs and certifications in sustainability and ESG management have gained prominence. Universities and professional organisations offer courses and certifications that equip individuals with the necessary knowledge and skills to excel in the field. Additionally, relevant degrees in environmental science, sustainability, business administration, and finance are highly valued by employers.
The ESG and sustainability job market is experiencing significant growth and offers diverse opportunities for professionals. Dedicated roles, as well as the integration of ESG knowledge into traditional job functions, highlight the increasing importance of sustainability in business strategies. Specialized skills, regulatory expertise, and industry knowledge are highly sought after.
​As companies strive to embed ESG practices into their operations, professionals with ESG expertise will continue to play a crucial role in driving positive change and shaping a sustainable future.

Diverse Opportunities: ESG and Sustainability Across Industries

The ESG and sustainability job market is not limited to specific industries. While sectors such as renewable energy, cleantech, and sustainable finance have a well-established presence, organisations across diverse industries are recognizing the need to prioritize ESG and sustainability practices. From manufacturing and retail to technology and healthcare, professionals with ESG expertise are sought after to drive sustainability initiatives and help companies future-proof their operations.

Navigating the Regulatory Landscape: Compliance and Governance Expertise

The increasing regulatory focus on ESG factors has led to a rise in demand for professionals who can navigate the evolving compliance landscape. Knowledge of relevant regulations and frameworks, such as the Task Force on Climate-related Financial Disclosures (TCFD) and the United Nations Sustainable Development Goals (SDGs), is highly valued. This includes expertise in managing ESG risks, conducting audits and assessments, and implementing sustainable governance structures.

Specialised Skills and Knowledge: Key Areas in High Demand

The ESG and sustainability job market also offers opportunities for specialised skills and knowledge. Professionals with expertise in renewable energy, circular economy, sustainable supply chain management, impact investing, and environmental conservation are in high demand. Additionally, individuals with experience in sustainability reporting frameworks, such as the Global Reporting Initiative (GRI) or Sustainability Accounting Standards Board (SASB), are sought after to ensure transparent and standardized reporting.

ESG Expertise in Traditional Job Roles: The Integration of Sustainability Principles

Another emerging trend is the growing importance of ESG expertise in traditional job roles. Professionals in finance, legal, marketing, operations, and human resources are increasingly expected to have a solid understanding of ESG principles and their implications for their respective fields. For example, financial analysts need to assess the financial risks and opportunities associated with ESG factors, while marketing professionals must effectively communicate a company’s sustainability initiatives to consumers.

Dedicated ESG and Sustainability Roles: A Shift Towards Holistic Approaches

One significant trend in the job market is the rise in dedicated ESG and sustainability roles. Previously, these responsibilities were often dispersed across different departments, such as corporate social responsibility, environmental management, or investor relations. However, as companies recognize the need for a holistic approach, they are creating specialised positions such as ESG managers, ESG analysts, and corporate sustainability officers. These roles focus on integrating ESG considerations into business strategies, measuring and reporting on sustainability performance, and engaging with stakeholders.

ESG and Sustainability Job Market Trends

The ESG (Environmental, Social, and Governance) and sustainability integration job market has experienced significant growth and transformation in recent years. As companies worldwide recognize the importance of incorporating ESG principles into their operations, the demand for professionals with expertise in this field has surged. This article will explore the evolving landscape of the ESG and sustainability job market, highlighting key trends and opportunities.
The integration of ESG and sustainability practices into business strategies has become a top priority for organisations across industries. This shift is driven by various factors, including the increasing awareness of climate change, social justice issues, and corporate governance standards. As a result, companies are actively seeking professionals who can navigate the complexities of ESG and sustainability and drive positive change within their organizations.