ESG Framework

January 2024 – Environmental, Social, and Governance (ESG) is a framework that helps investors evaluate how a company manages risk and opportunities around sustainability issues. ESG metrics are non-financial indicators that evaluate companies’ ESG performance. ESG reporting is the public disclosure of ESG data. An ESG framework is a structured approach to ESG reporting. Using an ESG framework produces measurable results. ESG standards translate ESG framework principles into action by specifying factors such as metrics, methodologies, and reporting formats. The commonly used ESG reporting standards include Task Force on Climate related Financial Disclosures (TCFD) and United Nations Global Compact (UNGC). ESG compliance refers to meeting ESG guidelines established by regulatory bodies. An ESG rating, also called an ESG score, provides a benchmark for investors to evaluate a company’s ESG performance and compare it to other companies. In 2009, the Sustainable Stock Exchanges (SSE) initiative was established to promote corporate transparency and performance on ESG issues.

In this slideshow, you will learn about the definition, aspects, stakeholders, benefits, challenges, implementation, standards, UN policy, and global statistics of ESG reporting frameworks.