Navigating the fragmented landscape of sustainability reporting frameworks Navigating the fragmented landscape of sustainability reporting frameworks

The number of corporate sustainability reports published each year has increased exponentially over the past decade. As one point of reference, the percentage of companies on the S&P 500 Index that published an annual sustainability report rose from 20% to 86% between 2011 and 2018.

As sustainability reporting has risen in popularity, so too have the frameworks designed to provide guidance on what and how to report, such as GRI and SASB. To add to the confusion, there’s also been a proliferation of sustainability raters and rankers, such as CDP, DJSI and MSCI, that are often discussed alongside the aforementioned frameworks—creating a veritable alphabet soup of acronyms for companies to wade through.

So how are you to decide which framework is right for your organization, or does a choice even need to be made? Let’s explore.


Defining our terms

To keep things as clear as possible, in this piece “sustainability reporting framework” will only be used to refer to a framework that provides detailed standards with specific metrics. This does not include issue or sector-specific sustainability standards or reporting recommendations, such as the TCFD (which is designed to help companies oversee and manage climate-related risks only). Along this vein, organizations such as CDSB that have emerged to help reporting entities align disparate reporting frameworks into a streamlined structure, but do not publish their own standards with specific metrics, are also beyond the scope of this discussion.

Now that we’ve covered what, for the purposes of this piece, a sustainability reporting framework isn’t, let’s dig into what it is and, most importantly, which one is right for your organization.


GRI vs. SASB: The fundamental differences

GRI and SASB publish the predominate sustainability reporting frameworks. Founded over a decade before SASB, GRI is by far the more widely adopted of the two. According to the organization, of the world’s largest 250 corporations, 92% report on their sustainability performance and 74% of these use GRI’s Standards to do so.

While in many ways GRI and SASB’s frameworks serve the same function—providing guidance on what and how to report—they do so in rather different ways. When it comes down to it, I see five fundamental differences between GRI and SASB, noted below.


1. Type of Reporting Entity: SASB standards are intended to be used by businesses, while GRI Standards are designed for use by a broader range of organizations, including those in the public and non-profit sectors.


2. Target Audience: SASB standards are intended to help businesses communicate sustainability information to U.S. investors as their primary audience for sustainability reporting. As such, the standards cover a limited number of highly quantitative topics. On the other hand, GRI’s guidance is designed for companies to voluntarily report to a variety of stakeholders—such as employees, policy makers, suppliers, customers, communities and others, in addition to investors— on a broad array of topics.


3. Disclosure Format: GRI Standards are typically used to develop and design sustainability reports. However, SASB can be used within the context of a sustainability report or mandatory fillings for investors (financial disclosures such as SEC 10-K, 20-F fillings). Additionally, SASB’s metrics map to existing ESG data fields available on platforms such as Bloomberg terminal. 


4. View on Materiality: The concept of materiality is foundational in both frameworks. In GRI, the findings of an organization’s individual materiality assessment should dictate what issues are covered within their sustainability report. Conversely, SASB pre-identifies which sustainability issues are likely to affect the financial condition or operating performance of companies within a specific industry and advises reporting entities to base their sustainability disclosures on these issues. Both frameworks also differ in their perspectives on materiality. By zeroing in on the impacts of an organization on the world around it, GRI’s approach is outward-looking. Whereas SASB’s view on materiality revolves around the impacts of sustainability topics on a company’s financial condition or operating performance, suggesting is more inward-looking approach. Read more on this point from Ethical Corporation here.

As an aside, SASB’s interactive Materiality Map is a valuable reference for all companies, regardless of the reporting framework they choose.


5. Customization: SASB has published 77 industry-specific standards, whereas GRI’s Standards are not industry or sector-specific. 


Deciding which framework is right for you

In March 2017, leaders from GRI and SASB co-authored an op-ed in which they outline the primary differences and similarities between the two frameworks and argued that deciding between GRI and SASB is a false choice.

While, technically speaking, this is true, it may be unrealistic for an organization to align with more than one reporting framework. Among other challenges, doing so might require them to recalculate their sustainability performance based on differences in how certain topics are measured in each framework. On a topic like energy, for example, SASB’s standards include data disclosures on the percentage of grid electricity and renewables used, where GRI’s Standards do not.

In 2018, GRI and SASB announced a two-year project to harmonize the frameworks, identify areas where they are already similar and areas where they do not overlap. Once complete, this project will go a long way in encouraging companies to recognize the advantages of using both frameworks together.

In the meantime, see below for a decision tree to help decide which framework is right for your organization.

Another route

But what if your organization would rather integrate sustainability into your annual disclosures of financial performance? In this case, IIRC’s Integrated Report <IR> might be a better route.

The <IR> Framework provides principles-based guidance for companies and other organizations wishing to integrate their sustainability and financial disclosures within a single report. Unlike GRI or SASB standards, it does not prescribe specific key performance indicators, measurement methods or the disclosure of individual matters, but does include a small number of requirements that are to be applied before an integrated report can claim to be in accordance with the Framework. While <IR> does not meet our definition for a sustainability reporting framework, it is an excellent option to consider for organizations seeking a more integrated approach.


Eager to learn more?

See below for a cheat sheet with more information on the sustainability reporting frameworks published by GRI, SASB and IIRC. Please also feel free to reach me at to learn more about how Salterbaxter can help you navigate the (often confusing) world of sustainability reporting.

Read the cheat sheet here.


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