ESG reporting has become essential but increasingly complex, making it vital for companies to understand the difference between frameworks (the “what” and “why” of disclosure) and standards (the “how”). By using both effectively, organizations can navigate rising regulatory demands, improve data quality, strengthen stakeholder trust, and turn sustainability reporting from a compliance exercise into a strategic advantage.
In the modern business ecosystem, ESG—Environmental, Social, and Governance—is a fundamental measure of corporate health. As stakeholder scrutiny intensifies, so too does the complexity of documenting performance. Businesses navigating this landscape often find themselves tangled in an alphabet soup of acronyms.
We believe that understanding the difference between ESG frameworks and standards is the critical first step to turning compliance into a competitive advantage. Here, our guide breaks down the essential tools organizations use to measure, manage, and report their sustainability journey, staying ahead of emerging ESG trends.
What Are ESG Frameworks and Standards?
ESG frameworks and standards are essential tools guiding organizations in measuring, managing, and publicly reporting their ESG-related risks and performance. They bring structure and credibility to sustainability efforts. Frameworks provide the “why” and “what”. They offer the overarching structure, principles, and concepts that guide how an organization should prepare its disclosure, focusing on defining materiality and which topics matter to stakeholders.
Standards provide the “how”. They are highly prescriptive, specifying the actual reporting metrics, protocols, and disclosure requirements for specific topics (e.g., how to measure carbon emissions) to ensure the data is consistent and comparable. By using both, a company can define its reporting strategy (framework) and ensure its underlying data is robust (standard).
Why Use an ESG Reporting Framework?
Frameworks enhance transparency, credibility, and regulatory compliance, support stronger decision-making by integrating ESG into strategy, and unlock access to ESG-focused capital by meeting investor expectations.
We are committed to using ESG reporting frameworks, and our experience with them has seen several key benefits:
- Standardization and transparency provided by frameworks allow stakeholders to compare performance within and across industries.
- Credibility and trust are built by using internationally recognized frameworks.
- Regulatory compliance is often mandated by regulators and stock exchanges (like TCFD).
- Better decision-making results from integrating ESG factors into core business strategy for enhanced resilience.
- Attracting Capital is facilitated, as frameworks are prerequisites for attracting the large pool of ESG investing capital dedicated to responsible portfolios.
Key Differences Between Frameworks and Standards
While frameworks guide what information should be reported and how it is organized, standards specify the exact metrics and protocols required, meaning companies often use a framework like TCFD to shape strategy and a standard like SASB to report the data itself.
The distinction between frameworks and standards is subtle but important for proper implementation. Frameworks offer the guiding principles, scope, and content organization, defining the ‘what’ should be disclosed. Standards, however, specify the specific metrics, protocols, and disclosure requirements, defining how it should be measured and ensuring the underlying data quality. For example, a company might use the TCFD framework to set the strategy and the SASB standard to report the specific industry-relevant data metrics used within that strategy.
The Most Common ESG Frameworks Explained
Common ESG frameworks include; GRI that supports broad, impact-focused reporting for multiple stakeholders; SASB for industry-specific, financially material metrics; TCFD structures climate-risk disclosures; CDP benchmarks environmental impacts; the UN SDGs guide alignment with global priorities; and ISSB consolidates major frameworks into a global baseline for investor-focused reporting.
GRI (Global Reporting Initiative)
GRI is the most widely adopted global framework, focused on multi-stakeholder accountability. It requires reporting on the organization’s impacts on the economy, environment, and people, making it suitable for comprehensive, outward-facing transparency across large, diverse organizations.
SASB (Sustainability Accounting Standards Board)
Now part of the IFRS Foundation, SASB provides industry-specific standards across 77 sectors. Its focus is strictly on financial materiality—the ESG topics most likely to affect a company’s enterprise value, primarily targeting investors with highly prescriptive, quantifiable metrics.
TCFD (Task Force on Climate-Related Financial Disclosures)
TCFD provides the leading framework for companies to disclose climate-related financial risks and opportunities. It is structured around four pillars: Governance, Strategy, Risk Management, and Metrics & Targets, making climate disclosure comparable to traditional financial reporting.
CDP (Carbon Disclosure Project)
CDP operates a global environmental disclosure system where companies report detailed information on their climate change, water security, and deforestation impacts. It acts as a crucial benchmarking tool for investors, scoring submissions annually.
UN SDGs (Sustainable Development Goals)
The 17 UN SDGs serve as a universal blueprint for a sustainable future. Companies use the SDGs to align their corporate strategy and social impact initiatives with global priorities, demonstrating their contribution to broader societal goals.
ISSB (International Sustainability Standards Board): The New Global Baseline
Formed by the IFRS Foundation, the ISSB is establishing a comprehensive global baseline for sustainability disclosures primarily targeted at investors. It aims to integrate and supersede core elements of SASB and TCFD, creating a consolidated, globally consistent standard to reduce fragmentation.
Mandatory vs. Voluntary Reporting: Navigating the Compliance Maze
Voluntary reporting is driven by market expectations and investor engagement, while mandatory reporting is legally enforced by governments and exchanges, with a clear trend toward formerly voluntary areas becoming regulated requirements.
The reporting landscape is rapidly shifting.
- Voluntary reporting is company-led, driven by market demand and investor relations.
- Mandatory reporting is required by governments (like the EU’s CSRD) or stock exchanges, with failure to comply risking significant penalties.
The trend is clear: areas initially covered by voluntary frameworks are quickly being codified into mandatory law, making proactive adoption essential.
How to Choose the Right ESG Framework for Your Organization
As a better waste company, we are committed to continuously educating ourselves to build safe and equitable practices that positively impact all communities.
Greg Lettieri, Co-Founder + CEO, RTS
Organizations must select frameworks based on materiality, stakeholder needs, geographic regulatory requirements, and the practicality of measuring ESG data—especially in areas like waste management—within existing operational systems.
Selecting the right framework requires strategic alignment with organizational needs:
- Materiality involves focusing on frameworks (like SASB) addressing the most financially significant ESG topics for your industry.
- Stakeholder Focus dictates whether you prioritize investor needs (TCFD/ISSB) or broader audiences (GRI).
- Geographic Relevance ensures the framework satisfies regional mandates (e.g., CSRD).
- Ease of Implementation means selecting standards where the necessary ESG Data is measurable and obtainable within your current operational systems, particularly concerning areas like ESG Waste Management protocols.
Challenges Companies Face in Aligning ESG Standards
Companies struggle with conflicting disclosure requirements, limited data quality (particularly Scope 3), insufficient internal expertise for technical standards, and continuously evolving regulations such as the transition to ISSB.
Despite the drive toward harmonization, common obstacles persist: conflicting requirements across frameworks, a pervasive lack of quality data (especially for Scope 3 emissions), internal capacity issues to manage technical rigor, and continually evolving regulatory expectations like the transition to ISSB.
Technology’s Role in ESG Data Collection and Reporting
Digital ESG platforms automate complex data gathering, calculate metrics, map information across multiple standards, and integrate with financial systems to improve accuracy, reduce manual work, and support advanced risk modeling.
Digital tools are essential for overcoming data hurdles and ensuring accuracy. ESG data platforms automate the collection of vast amounts of raw data from operational systems. Technology uses analytics to automatically calculate complex metrics and maps them to multiple standards simultaneously, significantly reducing manual effort. Critically, these platforms integrate with financial systems, allowing companies to conduct robust risk modeling.
The Future of ESG: Toward Global Harmonization
The future is defined by convergence. The ISSB signifies the strongest push yet toward a single, global baseline standard for investor-focused disclosures. This, combined with regulatory alignment, suggests the market will settle on a core set of highly standardized, verifiable, and comparable metrics. Investor demand for high-quality, integrated ESG data will continue to be the primary engine driving this global harmonization.
Conclusion: From Compliance to Impact
Understanding ESG frameworks is a core competence for business survival and its something that we feel strongly about at RTS. Organizations must view these tools not merely as reporting obligations but as strategic assets. By adopting a structured approach, companies can move beyond ticking boxes to actively measure, manage, and drive meaningful environmental and social impact, ultimately unlocking long-term competitive advantage and trust.
SOURCES
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RTS. (n.d.). Top ESG trends. https://www.rts.com/blog/top-esg-trends/
RTS. (n.d.). ESG and waste management. https://www.rts.com/blog/esg-waste-management/
RTS. (n.d.). What is ESG investing? https://www.rts.com/resources/guides/what-is-esg-investing/
SASB. (n.d.). SASB standards. https://sasb.ifrs.org/standards/
Global Reporting Initiative. (n.d.). GRI: Global reporting standards for sustainability. https://www.globalreporting.org/
SASB. (n.d.). SASB standards overview. https://sasb.ifrs.org/
Task Force on Climate-related Financial Disclosures. (n.d.). TCFD recommendations. https://www.fsb-tcfd.org/
CDP. (n.d.). Why disclose? https://cdp.net/en/disclose/why-disclose
Global Society. (n.d.). The United Nations Sustainable Development Goals: Towards a more just and sustainable future. https://www.globalsociety.earth/post/the-united-nations-sustainable-development-goals-towards-a-more-just-and-sustainable-future
IFRS. (n.d.). Introduction to ISSB and IFRS sustainability disclosure standards. https://www.ifrs.org/sustainability/knowledge-hub/introduction-to-issb-and-ifrs-sustainability-disclosure-standards/
Carbon Trust. (n.d.). What are scope 3 emissions and why do they matter? https://www.carbontrust.com/en-eu/our-work-and-impact/guides-reports-and-tools/what-are-scope-3-emissions-and-why-do-they-matter