IFRS Foundation

Choosing the Right Tools for the Job

Note: As of August 2022, the International Sustainability Standards Board (ISSB) of the IFRS Foundation assumed responsibility for the SASB Standards. The ISSB has committed to maintain, enhance and evolve the SASB Standards and encourages preparers and investors to continue to use the SASB Standards. The ISSB has confirmed that industry-specific disclosures are required and, in the absence of specific IFRS Sustainability Disclosure Standards, companies must consider the SASB Standards to identify sustainability-related risks, opportunities and related information to disclose. The guidance in this Implementation Primer is intended to serve as a useful reference for entities applying the SASB Standards independently from the ISSB Standards. Entities using the SASB Standards as part of their implementation of ISSB Standards should consider the relevant ISSB application guidance.

Implementation Primer

However, the utility of data for decision making depends almost entirely on the intended use and the specific user. In recent decades, a variety of approaches have emerged for companies to use in measuring and reporting sustainability information. Historically, much of this information has been gathered and reported for a broad base of potential users, which may in some cases limit its applicability to more specific users, such as investors who need comparable, consistent, and reliable data across a broad universe of companies.

As companies look to develop investor-focused sustainability reporting, they can benefit from taking the following steps:

Key Steps Toward Selecting the Right Disclosure Frameworks

  1. Develop a general understanding of the various frameworks and standards available for measuring, managing, and reporting sustainability information;
  2. Identify and prioritise target audiences and communications objectives;
  3. Engage with target audiences and review peer disclosure to better understand information needs and expectations; and
  4. Select frameworks to best address those needs.

Understand Your Options

A range of frameworks and standards exist for measuring, managing, and reporting sustainability information. Each of the following approaches (as well as others not listed) serves a different purpose, covering different topics, leveraging different channels of disclosure, and supplying information tailored to different audiences. Although the table below provides a general description of each approach and its objectives, these frameworks and standards are used—both alone and in conjunction—in a variety of ways by reporting companies.

These different approaches are described in more detail in the “Sustainability Reporting Frameworks” sidebar below. For more information on how these and other approaches to sustainability reporting differ and complement one another, see the Better Alignment Project: Driving Alignment in Climate Reporting report, available at the Corporate Reporting Dialogue website.

In addition to SASB Standards, companies commonly use the following sustainability reporting frameworks and standards, which are described here in their own words.

CDP (formerly Carbon Disclosure Project):
CDP wants to see a thriving economy that works for people and planet in the long term. To achieve this, it focuses investors, policymakers, companies, cities, states and regions on taking urgent action to build a truly sustainable economy.

CDP runs a global disclosure system that enables companies, cities, states and regions to measure and manage their environmental risks, opportunities, and impacts. More than 7,000 companies respond to CDP’s climate change, water security, and forests questionnaires annually at the request of more than 525 investors with US$96 trillion in assets and 125 large purchasing organisations. CDP provides data users with critical financial and non-financial information to integrate sustainability into their investment and decision-making processes.

CDP’s questionnaires gather both qualitative and quantitative information from across governance, strategy, risk, impact, and performance. To aid comparability and ensure comprehensiveness, CDP includes sector-specific questions and data points; for example, the climate change questionnaire incorporates sector-specific questions for high-impact sectors, such as agricultural commodities, oil and gas, cement, and transport services. In 2018, CDP aligned its climate change questionnaire with the TCFD.

Climate Disclosure Standards Board (CDSB):
CDSB’s mission is to create the enabling conditions for material climate change and environmental information to be integrated into mainstream reports. This facilitates the assessment of the relationship between specific environmental matters and the organisation’s strategy and financial performance for the benefit of investors.

CDSB does this by offering companies the CDSB Framework for reporting natural capital and environmental information with the same rigor as financial information. The CDSB Framework helps companies to provide investors with decision-useful environmental information via mainstream corporate reports, enhancing the efficient allocation of financial capital in support of sustainable and climate-resilient economies. Regulators also benefit from the compliance-ready materials that CDSB produces.

The CDSB Framework is composed of seven guiding principles and 12 reporting requirements. These set out the how and the what, respectively, for reporting relevant and material environmental and climate-related information in mainstream annual reports.

Note: The CDSB Framework has been consolidated into the materials of the IFRS Foundation as implementation guidance.


Global Reporting Initiative (GRI):
GRI, an independent, international organisation, helps businesses and governments  worldwide understand and communicate their impact on critical sustainability issues, such as climate change, human rights, governance and social wellbeing. This enables real action to create social, environmental and economic benefits for everyone.

GRI Sustainability Reporting Standards (GRI Standards) are the most widely adopted global standards for sustainability reporting. Sustainability reporting, as promoted by the GRI Standards, is an organisation’s practice of reporting publicly on its contributions—positive or negative—toward sustainable development. The GRI Standards are designed to enhance the global comparability and quality of information on these impacts, thereby enabling greater organisational transparency and accountability.

The GRI Standards are structured as a set of interrelated, modular standards. Three universal GRI Standards apply to every organisation preparing a sustainability report. An organisation further selects from the set of topic-specific standards for reporting on its material topics. These standards are organised into three series—economic, environmental and social.

The GRI Standards contain several topic-specific standards for organisations to use to report climate change where they identify it as a material topic, i.e. GRI 305: Emissions 2016; GRI 302: Energy 2016; GRI 303: Water and Effluents 2018; and GRI 201: Economic Performance 2016, Disclosure 201-2 (related to financial implications and other risks and opportunities due to climate change).

Integrated Reporting <IR>:
The IIRC is a global coalition of regulators, investors, companies, standard setters, the accounting profession and NGOs. Its mission is to establish integrated thinking and reporting within mainstream business practice as the norm in the public and private sectors. Its vision is to align capital allocation and corporate behaviour to wider goals of financial stability and sustainable development through the cycle of integrated thinking and reporting.

An integrated report is a concise communication about how an organisation’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value over the short, medium and long term. The International <IR> Framework sets out seven guiding principles and eight content elements to govern the overall content of an integrated report, as well as providing organisations with additional general guidance relating to fundamental concepts of integrated reporting.

The IIRC recognises the increasing importance of climate change to the ability of all organisations to create value over time and, therefore, the need to address climate-related risks and opportunities in an integrated report.

Note: The Integrated Reporting Framework has been consolidated into the materials of the IFRS Foundation.

Task Force on Climate-related Financial Disclosures (TCFD):
Established by the Financial Stability Board, the TCFD has developed recommendations for voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders. The recommendations of the TCFD were published in June 2017.

The Task Force developed four widely adoptable recommendations on climate-related financial disclosures applicable to organisations across sectors and jurisdictions. In developing its recommendations, the Task Force considered the challenges for preparers of disclosures as well as the benefits of such disclosures to investors, lenders, and insurance underwriters. To achieve this balance, the Task Force engaged in significant outreach and consultation with users and preparers of disclosures and drew upon existing climate-related disclosure regimes. The insights gained from the outreach and consultations directly informed the development of the recommendations.

The Task Force structured its recommendations around four thematic areas that represent core elements of how organisations operate—governance, strategy, risk management, and metrics and targets. The four overarching recommendations are supported by key climate-related financial disclosures—referred to as recommended disclosures—that build out the framework with information that will help investors and others understand how reporting organisations think about and assess climate-related risks and opportunities. In addition, there is guidance to support all organisations in developing climate-related financial disclosures consistent with the recommendations and recommended disclosures as well as supplemental guidance for specific sectors.

Note: The [draft] IFRS Sustainability Disclosure Standards build upon the recommendations of the TCFD.

SASB connects businesses and investors on the financial impacts of sustainability. SASB does this by developing and maintaining robust disclosure standards that enable companies around the world to identify, manage, and communicate financially material sustainability information to investors. SASB Standards are evidence-based, developed with broad market participation, and are designed to be cost-effective for companies and decision-useful for investors. The standards can be used to enhance all core communications with investors, including annual reports to shareholders, financial filings, sustainability reports, investor relations websites, and more.

SASB Standards Cover a Subset of Sustainability Information for Investors

By understanding its options, a company can more effectively target sustainability information to specific audiences for specific purposes. In the context of the broader sustainability reporting landscape, SASB Standards provide a unique complement to other commonly used frameworks. For example, the standards can be used alongside reporting intended for a broader range of stakeholders, such as employees, local communities, customers, suppliers, and others. Meanwhile, SASB Standards serve as a practical tool for implementing other, principles-based frameworks focused on providing financially material information to the investor community.

As you review the sustainability disclosure frameworks available to you, a handful of key characteristics may help enhance understanding:

  • Does the disclosure framework cover a single theme (e.g., climate change) or a broader range of environmental, social, and governance issues?
  • Does the disclosure framework provide principles-based guidance or specific performance metrics?
  • Is there a specific target audience for the disclosure framework or a broad range?
  • Does the disclosure framework take the same approach to companies across every industry oremphasisee comparability among peers within an industry?

Develop Disclosure Objectives

Corporate disclosure, like any form of communication, is most effective when it is tailored to its audience. Therefore, a company can more readily select the appropriate disclosure frameworks by identifying who it intends to receive the information. Ideally, companies should identify and prioritise their target audiences and set communications objectives for each one. Audiences may include shareholders as well as a range of other stakeholders, including creditors, ratings agencies, customers, employees, communities, civil society and governmental organisations. Communications objectives may vary for these audiences. For example, they may include one or more of the following:

  • For shareholders and other providers of capital: Disclosing information about performance on the sustainability topics most relevant to a company’s long-term financial performance.
  • For communities, customers, employees, suppliers, civil society, governments, and investors: Reporting information about the organisation’s impacts on society and the environment.
  • For investors, lenders, ratings agencies, and insurance underwriters: Reporting how the company oversees and manages the climate-related risks and opportunities it faces.

Over time, as a company develops greater proficiency in disclosing sustainability information, it may wish to consider setting more specific communications objectives (e.g., consistent, comparable, reliable disclosure in accordance with SASB Standards). More precise objectives can help a company more readily identify risks to achieving those objectives and establish more effective controls to mitigate the risks.

Understand Audience Needs and Expectations

Corporations across a variety of industries employ user-centred design to optimise products around how customers want or need to use their products. Those same companies—and all organisations—can use a similar approach to produce more effective sustainability disclosure.

Even high-quality data can have limited utility if it doesn’t meet the ­­­needs and expectations of its intended users. For this reason, a company should take steps to clearly identify:

  • The needs of its key audiences, the type of information they’re looking for, and how they plan to use it; ­­
  • The expectations of these audiences, which are largely shaped by peer disclosure practices.

Audience Needs

Even within a given audience type, variability is likely to exist. For companies seeking to communicate sustainability information to investors, different investors may have unique information needs. For example, investors’ interests often vary by region, sector, and investment strategy. A company is therefore likely to benefit from considering a diversity of perspectives and specific use cases from among its key shareholders. By engaging with these investors to better understand their sustainability-related priorities, a company can more readily determine how to incorporate relevant information into its investor communications.

For example, a company may wish to solicit input on the following:

  • Does the investor prefer a specific framework or combination of frameworks?
  • Which sustainability topics are most important to the investor? Why?
  • What associated performance metrics are most relevant to and useful for the investor’s decision making?
  • How frequently is the information needed or desired?
  • In which reporting channel(s) would the information be most useful?
  • Does the investor rely on a third-party ESG ratings agency, and if so, which one?

Engaging with investors to better understand their information needs may be particularly helpful to companies just beginning their sustainability reporting journeys.   Many investors have published policy statements, proxy voting guidelines, or other ESG disclosure guidance for their portfolio companies. Such documents are a useful resource for identifying the preferences of your key shareholders.

Many companies approach sustainability reporting by asking themselves what story they want to tell. The more important question may be, “What story does our target audience need to hear?” Often, the best way to understand the needs and expectations of a specific audience is also the simplest: Ask them.

For example, consider The Travelers Companies’ implementation of SASB Standards. As Yafit Cohn, the company’s Vice President, Chief Sustainability Officer and Group General Counsel, has pointed out, “a foundational part of our process was meeting with our large institutional investors, representing half of our shares outstanding, to solicit their views, preferences, and guidance with respect to ESG disclosure.” Among other findings, Travelers “observed significant investor momentum behind SASB Standards and the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).” Cohn has said that “the conversations we had with our investor base confirmed how essential it is for us to draft a coherent and comprehensive narrative, specifically for investors, about Travelers’ approach to ESG and how we are managing risks and availing ourselves of opportunities to enhance the long-term economic sustainability of our company.”[1] Travelers proceeded to use the learnings from its investor engagements in deciding on its approach to reporting, the frameworks and standards with which it has aligned its disclosures, and the specific topics it covers on its sustainability site.

Laurel Peacock, Sustainability Director at NRG Energy, agrees. “We had an investor road show where our CSO went along with the CEO, CFO, Head of IR, and others to talk with shareholders about ESG, and we had those face-to-face conversations to learn, ‘Are we providing the information you need?’ ‘What other information can we get you?’” she says. “All our communications come down to the audience.” Based in part on feedback from investors and other stakeholders, NRG has developed an approach to sustainability disclosure that illustrates the complementary nature of the disclosure frameworks it uses, which include SASB Standards, GRI standards, CDP disclosures, and the TCFD recommendations.

Similarly, for Vornado Realty Trust, “Our decision to disclose through SASB came out of stakeholder engagement with our largest institutional investors,” according to Senior Vice President of Energy & Sustainability Daniel Egan. “I’ve been fortunate to have exposure to the stakeholders we think are most valuable—investors, tenants, employees, and local governments—to understand their needs,” he says. “We did a series of one-off ESG engagement calls with our largest investors and nearly 100 percent had either heard of SASB, worked for a [SASB Investor Advisory Group] member organisation, or were just very supportive of organizing our disclosure according to the SASB framework.”

A company may also wish to extend its consideration of the target audience beyond identifying specific topics and metrics to determining how that information should be presented. For example, Nike chose to report its SASB disclosures in a standalone table rather than weaving the data throughout its sustainability report. After all, “The information they [investors and professional stakeholders] are looking for should be easily accessible,” said Director of Purpose Communications and Reporting, Alex Hausman.

Finally, it’s important to remember that not every investor has the same information needs, so what works for one might not satisfy another. “[Our] support of SASB does not diminish the value we place in other comprehensive or issue-specific ESG disclosure frameworks that call for more comprehensive transparency such as GRI, CDP, or the UN Guiding Principles Reporting Framework addressing human rights,” according to Heidi Soumerai, Managing Director at Boston Trust Walden. She points to greenhouse gas emissions (GHG) data as an example. Although SASB Standards include a Scope 1 GHG metric for 23 of 77 industries, Walden believes all companies should report this information. “In our view, SASB’s industry-based materiality framework does not encompass some system-wide indicators that contribute to improved economic (and societal) outcomes long term,” she has said. Thus, for many companies, using a combination of disclosure frameworks may be the most effective way to meet the information needs of a key audience or audiences.

[1] Remarks of Yafit Cohn, The Travelers Companies, Inc., SEC Investor Advisory Committee Discussion Regarding Disclosures on Sustainability and ESG Topics (December 13, 2018).

SASB Resources: Engaging with Investors

SASB publications can be valuable resources for companies seeking to prepare for engagements with investors and to gain insights into how investors are using sustainability information. The SASB Engagement Guide includes industry-specific questions companies may hear from investors. SASB’s ESG Integration Insights case studies feature investors, in their own words, explaining how their use of SASB Standards helps them integrate ESG considerations into investment decisions.

Audience Expectations

Expectations placed on a given company’s reporting are often a function of the information its peers typically disclose. As such, before choosing a disclosure framework, a company may wish to review the sustainability disclosure practices of key competitors. For companies looking to communicate more effectively with investors, the following questions may be helpful.

Questions to Consider:

✓   Through what channels do peer companies report investor-focused sustainability information?

✓   What reporting framework(s) do they use?

✓   Which sustainability issues or specific performance metrics are most frequently included in peer reporting to investors?

✓   What time periods are presented?

✓   Is information reported at the aggregate level for the company, or by region or business segment?

✓   Do peers provide activity data that enables normalisation of metrics?

When peer companies make robust disclosures regarding key sustainability issues, investors may be primed to expect that all firms impacted by a given issue will address the issue similarly. By benchmarking a company’s own disclosures against those of industry peers, the organisation can better understand where it stands in relation to routine, emerging, and/or best practices.

Source: KPMG

Select the Right Frameworks

Having considered the needs of various audiences, a company will be better positioned to select an appropriate reporting fram­ework (or frameworks) for communication with each of them. A reporting company may wish to ask itself the following questions.

Questions to Consider:

✓   Have key audiences indicated an interest in specific sustainability issues (e.g., climate change) or in a broader range of environmental, social, and governance factors?

✓   Are they interested in how social and environmental issues bear on the company’s financial performance?

✓   Do users want to understand the company’s impact on broader societal goals, such as the UN Sustainable Development Goals?

✓   Have they expressed a desire for an in-depth, qualitative discussion of key issues; quantitative performance metrics that are easy to compare across companies; or some combination of the two?

✓   What is their preferred delivery channel (e.g., annual reports, integrated reports, regulatory filings, sustainability reports, website, etc.)?

✓   What standards or frameworks are peer companies using to report sustainability information to the target audience? Through which reporting channels are they doing so?

Depending on the answers to these questions, a company may conclude that multiple frameworks are relevant to its reporting needs. SASB standards may be used alone or in conjunction with other reporting frameworks. The most common use cases for combining SASB Standards with other frameworks include the following:

  • SASB/GRI: SASB Standards are often used in conjunction with GRI Standards, with the former focused on communicating financially material information to investors and the latter focused on stakeholder impacts.
  • SASB/Integrated Reporting: SASB Standards can provide industry-specific topics and metrics related to the “non-financial” capitals in the Integrated Reporting framework.
  • SASB/TCFD: SASB Standards can serve as a practical tool for implementing the principles-based TCFD recommendations by providing industry specific-metrics related to climate risks and opportunities.

Although the sustainability reporting landscape is sometimes described as an “alphabet soup” of initiatives, reporting companies recognise that different frameworks and standards serve different purposes. Considering the use of multiple approaches isn’t about trying to check every box, it’s about weighing the unique value-add of each one. As Alex Hausman, Sustainable Reporting and Disclosure Director at Nike, says, “If a new framework like TCFD is legitimately additive, why wouldn’t we do it?”

NRG Energy’s sustainability reporting is guided by SASB, the Global Reporting Initiative (GRI), CDP, the Sustainable Development Goals (SDGs), and TCFD—with each one adding to the total mix. For example, “SASB Standards allowed us, in a pretty cost-effective way, to provide a new format where investors could quickly go look at actual performance metrics,” says Sustainability Director Laurel Peacock. “For the most part, [the various frameworks] are completely complementary, not conflicting.”

Similarly, Nike aligns its reporting with SASB, GRI, the SDGs, and the UN Global Compact. When the company added SASB to the mix, Hausman says, “we had heard pretty clearly that this was the framework that investors are asking for.” The company was already reporting an array of sustainability-related information, he says, but “we’ve heard that the SASB framework would provide a more familiar framework that would make the information they [investors and professional stakeholders] are looking for easier to find.”

For Vornado Realty Trust, SASB added to the reporting it produces in accordance with GRI and to the member-based Global Real Estate Sustainability Benchmark. “The frameworks have close alignment on a lot of key performance indicators,” says Senior Vice President of Energy & Sustainability Daniel Egan. With SASB, “we now have a non-proprietary source we can refer investors to for information.”

As laid out in Choosing the Right Tools for the Job, it is critical for companies to identify the audiences interested in the company’s sustainability performance, understand their information needs, establish communication objectives accordingly, and select the appropriate reporting framework(s)  to accomplish these objectives.

In evaluating the range of information that may support decision making among different stakeholder groups, companies may wish to consider the concept of “double materiality” introduced in the European Commission’s 2017 Guidelines on non-financial reporting and discussed further in its Guidelines on reporting climate-related information. This approach comprises two perspectives that may influence a company’s reporting objectives and thus its disclosures:

  • Financial Materiality: Concerns the company’s development, performance, and position, in the broad sense of affecting the value of the company. This perspective is typically of most interest to investors and other financially concerned parties, such as debtors, lenders, and underwriters.
  • Environmental and Social Materiality: Concerns the environmental and social impact of the company’s activities, and typically is of most interest to citizens, consumers, employees, business partners, communities, and civil society organisations.

Importantly, these two perspectives are not mutually exclusive. For example, a given sustainability issue can materially impact a company’s financial performance and the environment at the same time—consider, for instance, how a beverage manufacturer manages its water consumption. In addition, issues can rapidly evolve, and issues that are material from a societal perspective may become financially material over time.  Many companies choose to disclose using these two perspectives, leveraging SASB standards to guide disclosure of financially material sustainability information and GRI Standards to guide disclosure of issues that are material to society and stakeholders.

Summary and Worksheet

Key Actions:

  • Develop a general understanding of the various frameworks and standards available for measuring, managing, and reporting sustainability information
  • Identify and prioritise target audiences and develop communications objectives
  • Engage with target audiences to better understand their needs, expectations, and use cases
  • Review peer disclosure to understand best practices
  • Select a framework or combination of frameworks to best meet your communication objectives