As the European Sustainability Reporting Standards (ESRS) come into force, companies are gearing up to comply with the granular disclosure requirements mandated by this new regulatory regime. While the ESRS define what information needs to be reported, they don't always prescribe the methodologies for calculating certain metrics or performing assessments.

This is where external frameworks and standards prove invaluable. By integrating leading sustainability frameworks into their ESRS reporting processes, companies can benefit from well-established practices, enhance credibility, and streamline efforts. Let's explore some key frameworks that can support robust ESRS reporting.

The GHG Protocol Corporate Standards

For disclosures on greenhouse gas emissions across all scopes, the ESRS relies heavily on the GHG Protocol's suite of corporate accounting and reporting standards developed by WBCSD and WRI. This framework provides detailed guidance on:

By aligning with the GHG Protocol from the outset, companies can ensure their ESRS climate-related disclosures follow international best practices in emissions accounting.

The Task Force on Climate-Related Financial Disclosures (TCFD)

The TCFD recommendations, backed by leading banks and companies, provide a framework for evaluating and reporting climate-related risks and opportunities. Several TCFD elements around governance, strategy, risk management, and metrics/targets have been incorporated into the ESRS's climate change requirements.

Following the TCFD framework enables companies to structure their processes, analyses, and disclosures in line with the ESRS's expectations for a robust climate risk assessment and action plan. This includes qualitative and quantitative details like scenario analyses, transition plans, risk quantifications, and metrics monitoring.

Science-Based Targets initiative (SBTi)

As part of the ESRS, companies need to disclose their emissions reduction targets, whether they are science-based, and detail their climate action plans. The SBTi's comprehensive methodologies, validation protocols, and technical resources can guide the setting of ambitious, credible net-zero goals fully aligned with climate science.

Sector Guides like SASB and GRI

For many industry-specific sustainability topics, the ESRS will likely integrate disclosure metrics and methodologies from established sector-specific guidance like:

Leveraging such sector-specific resources will be crucial for companies to streamline their ESRS reporting in accordance with industry realities and stakeholder expectations.

Ongoing Evolution

While some frameworks like GHG Protocol are explicitly incorporated into the ESRS today, EFRAG and the EU will continue efforts to harmonize and align ESRS with other leading global initiatives in the coming years. The ISSB's new global baseline being developed for sustainability disclosures will likely influence ESRS's direction as well.

Companies can stay ahead by proactively integrating relevant third-party frameworks and methodologies into their ESRS reporting architecture from the ground up. Not only will it enhance disclosure quality, but also facilitate greater alignment with rapidly evolving sustainability reporting landscapes down the line.

Embedding global best practices through such reputable sustainability frameworks is pivotal for companies to deliver credible, decision-useful ESRS reporting. Those that effectively navigate this ecosystem can gain a competitive edge through robust ESG accountability and performance.