Navigating the Complex Landscape of ESG Reporting Frameworks: Aligning with CDP, RE100, TCFD, WRI and GRI

Published: 11 January 2023 by Serina Lesnar

Environmental, social and governance (ESG) reporting frameworks have become increasingly important for companies in recent years as investors and consumers alike seek to understand a company’s impact on the environment and society. However, the various frameworks that exist can be confusing for companies looking to align their reporting with industry standards. This article will explore the congruence and disconnection of some of the most commonly used ESG reporting frameworks, including CDP, RE100, TCFD, WRI and GRI, and what this means for companies that wish to align with them.

One of the key challenges for companies is that each framework focuses on different aspects of ESG and has its own reporting requirements. For example, the Carbon Disclosure Project (CDP) focuses specifically on a company’s greenhouse has emissions, while the Global Reporting Initiative (GRI) has a broader focus that includes a range of environmental, social and governance issues. Additionally, some frameworks, such as RE100 and Task Force on Climate Disclosure (TCFD), are primarily focused on the renewable energy and financial ESG disclosures of companies. This lack of alignment and standardization can make it difficult for companies to understand which framework is most relevant to them and how to align their reporting accordingly.

Measuring Scope 1, 2 and 3 emissions is an important aspect of ESG reporting and it is crucial to be aware of the different methodologies that each framework uses. Scope 1 emissions are direct emissions from sources that are owned or controlled by the reporting company, such as combustion of fossil fuels in boilers or vehicles. Scope 2 emissions are indirect emissions from the generation of purchased electricity, heat or steam. Scope 3 emissions are all other indirect emissions that are consequences of the activities of the reporting company, but occur from sources not owned or controlled by the company, such as employee commuting, suppliers Scope 1–2 emissions or the disposal of waste.

The frameworks also have different levels of rigor and granularity in their reporting requirements. For example, GRI’s guidelines are considered to be more flexible and voluntary compared to CDP, RE100 and TCFD which are mandatory and designed to be specific in their measurement criteria.

Further, reporting frameworks are evolving over time, typically becoming more stringent with their reporting mandates. For example, one major reporting framework has announced changes and another is on the brink of creating additional, and potentially profound changes, to their guidelines.

• RE100 released new technical criteria guides in Q4 2022 that limit the use of Environmental Attribute Certificates (EACs) if the generation of the asset began operation more than 15 years ago. This means that if a voluntary buyer wishes to prove EACs and are not the original offtaker of the project, they must meet this criteria to have it count towards their Scope 2 emission reductions. That said, this new criteria does align with other frameworks like CDP and benefits the ease of certifying these claims from companies like Green-e.
• WRI, who controls the Greenhouse Gas Protocol (GHGP) has an open commentary period from December 2022 to February 2023 for major changes to their Scopes 1–3 reporting methods.

In conclusion, the various ESG reporting frameworks that exist can be confusing for companies looking to align their reporting with industry standards. The lack of alignment and standardization across the frameworks can make it difficult for companies to understand which framework is most relevant to them and how to align their reporting accordingly. However, by understanding the specific requirements of each framework and prioritizing based on specific goals, companies can navigate this landscape effectively and align their reporting with industry standards.

🧠 What does this mean for you? If your company is wishing to align with multiple frameworks, it is important to understand the specific requirements of each one and to prioritize based on your specific goals. In general, it is advisable for companies to first focus on the framework that is most relevant to the industry and then to align with additional frameworks as needed. This is to ensure accuracy of reporting and being transparent with the framework you first choose to report on. It’s also worth noting that some of these frameworks have a cost attached to their services, so it’s important to weigh that factor in when deciding which ones to align with.