05-10-2021 14:21

GRI, SASB, CDP – Making sense of overlapping sustainability and climate disclosures

Need help navigating the jungle of standards and frameworks for voluntary ESG disclosures? Nordea’s Sustainable Finance Advisory team brings you a guide to the most important sustainability reporting initiatives, how they relate to each other and which ones to use.

Back in early 2020, we wrote about the dizzying array of acronyms when it comes to sustainability disclosures in Unscrambling the alphabet soup of ESG reporting. Since then, progress has been made to harmonise some of the different reporting frameworks and standards.

In this guide, we provide an updated overview of common ESG reporting initiatives, highlighting the links and differences. We also share our recommendations for which frameworks companies should take into account in their sustainability reporting.

An overview of ESG reporting initiatives

Initiative Name Theme Description
GRI Global Reporting Initiative General Sector-overarching sustainability reporting standards aiming to inform all stakeholders.
SASB Sustainability Accounting Standards Board General Sector-specific reporting framework focused on financial materiality and geared towards investors and capital providers.
UN SDG United Nations Sustainable Development Goals General A pact signed by businesses pledging to adopt sustainable business practices aligned with the Sustainable Development Goals.
IIRC International Integrated Reporting Council General Integrated reporting framework aiming to link traditional financial and sustainability disclosure. Recently merged with SASB in the Value Reporting Foundation.
CDP Carbon Disclosure Project Climate Non-profit with a focus on data collection and content for climate reporting.
CDSB Climate Disclosure Standards Board Climate Non-profit global environment disclosure framework geared towards investors and financial markets.
TCFD Task Force on Climate-Related Financial Disclosures Climate Climate-related risk disclosure focused on financial impacts of ESG risks.
GHG Protocol Greenhouse Gas Protocol Climate Greenhouse gas accounting standards and comprehensive calculation guides.
SBTi Science Based Targets Initiative Climate Association approving emission targets in line with the Paris Agreement (a 1.5C reduction by 2030).

1. Industry leaders GRI and SASB are making increasing harmonisation progress, and it makes sense to report under both.

The Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), the two most commonly used framework and standard setting agencies, are cooperating to harmonise disclosure frameworks. GRI was one of the first movers in corporate sustainability disclosure. Established in 1997, GRI provides a global, sector-agnostic disclosure standard for company operations’ impact on stakeholders at large. SASB, established in 2011, takes a financial materiality-based approach to sustainability disclosure, aiming to provide a more sector-focused view on the financial impacts of ESG issues on a company.

While some stakeholders may have a preference for one over the other, the two frameworks are ultimately complimentary and mutually supportive. While GRI covers the organisation’s impact on the economy, the environment and society, SASB is focused on financially material sustainability topics. SASB’s more industry-specific framework traditionally catered more to investors. However, as investors’ desire to understand both societal as well as financial impact is growing, disclosures covered by both SASB and GRI are now considered an important part of company analysis. Geographically, although SASB was historically more strongly anchored in the North American market, the framework is gaining significance in the European (and Nordic) markets.

Cementing their harmonisation, GRI and SASB issued a guide on alignment to both initiatives in April 2021. The guidance highlights that, for sampled companies, GRI serves as the general disclosure guideline, while SASB enhances the reporting through more data-driven information specifically geared towards investors and providers of financial capital.

Reporting under both initiatives lays the groundwork for issuers to effectively communicate their progress on sustainability-related issues and to differentiate themselves from peers. While investors are increasingly seeking detailed disclosures, the societal impact perspective is important for communicating relevance and real-world progress. We therefore recommend using the SASB and GRI frameworks together in order to facilitate and guide this approach to reporting.

Reporting under both GRI and SASB lays the groundwork for issuers to effectively communicate their progress on sustainability-related issues and to differentiate themselves from peers.

2. Climate disclosures are becoming increasingly interlinked and also mandatory.

The market offers a myriad of climate-specific disclosure frameworks, aiming to boost transparency of GHG emissions performance and provide insight into the extent of a company’s alignment with the Paris Agreement.  The most prominent initiatives in this area are the Task Force on Climate-Related Financial Disclosures (TCFD), which has been endorsed by the EU and has made its way into regulatory requirements elsewhere, and CDP (formerly the Carbon Disclosure Project), which has been successful in standardising corporate carbon disclosures across industries.

CDP disclosure consists of an extensive climate questionnaire to be filled out directly by the company. The TCFD framework, on the other hand, outlines best-practice recommendations for disclosing a corporate’s approach to climate risk management and its ultimate impact on company strategy and targets. The CDP questionnaire centres largely on performance, requiring detailed emissions disclosure covering both operations and supply chain. The TCFD recommendations, however, require that companies examine management structures, incentives and targets. Complementing both initiatives, the Science Based Targets Initiative (SBTi) provides a forward-looking assessment of whether climate targets are aligned with the Paris Agreement.

We recommend that corporates become familiar with the requirements of all three initiatives. In addition to signalling to the market a well-developed approach to climate risk, the disclosure and review process can be a useful tool for companies to assess the extent of their exposure, identify opportunities and highlight areas for development in climate governance or strategy.

To help corporates on this path, CDP has now aligned over 25 of the questions within the Governance, Risks & Opportunities, Strategy, Targets and Emissions sections of its questionnaire with the TCFD recommendations. In addition, it has provided additional sector alignment guidance for “high impact sectors such as financial services, energy, agriculture, transport and materials.”

In further alignment news, there is an ongoing initiative among the five leading sustainability reporting organisations (GRI, SASB, IIRC, CDP and CDSB) to simplify corporate sustainability reporting by developing a joint market guidance to bridge the gap between financial reporting and sustainability reporting.

When it comes to climate-specific disclosure frameworks, we recommend that corporates become familiar with the requirements of the TCFD, CDP and SBTi.

3. Harmonisation of climate reporting has yet to spread to other environmental and social-related disclosures.

While climate reporting is becoming a case study for the successful alignment of initiatives, it may take some time to see the same degree of alignment across social or other environmental impact reporting.

An EU consultation is currently underway on the upcoming social taxonomy, a first draft of which is to be released this autumn for feedback. In the realm of regulatory initiatives, the choice for reporting on social factors is largely limited to general frameworks such as GRI and SASB. As opposed to climate, there are few targeted reporting initiatives covering these areas of impact. As the social pillar is gaining significance, some sectors such as real estate are developing more meaningful metrics and reporting standards for social issues, such as access to affordable housing and the contribution of buildings to the local community. We expect this development to spread to other industries in the near future.

The headline goals and indicators of the UN Sustainable Development Goals (SGDs) have made their way into the corporate lexicon over recent years, with many companies and investors striving to quantify their contribution to the fulfilment of the SDGs. While efforts to understand and communicate positive impact are commended, the SDGs are not universally applicable, having been designed in the context of driving sustainable development. It may be difficult for companies that only operate in the Nordics, for example, to communicate social impact under the SGDs due to the regulatory regime under which the company operates and the strong social support structure in the region.

The lack of clear, comparable and quantifiable metrics that appropriately capture social impact is perhaps the greatest challenge in the development of universal social reporting standards. The quantifiable, scientific backdrop to the assessment of climate targets and trajectories, such as that used by the SBTi, is more difficult to apply in a social impact context. Although guidance and frameworks do exist, they are not always applicable across geographies or industries. We therefore recommend that companies closely evaluate the relevance of social impact metrics prior to reporting.


Lea Gamsjäger
Nordea Sustainable Finance Advisory
David Ray
Nordea Sustainable Finance Advisory

Nordea Sustainable Finance Advisory

Nordea's Sustainable Finance Advisory team helps clients navigate fundamental changes in the financial markets as the global economy shifts towards becoming sustainable and low-carbon. Find out more about our sustainable product offerings and holistic advisory services.

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