Infographic: ESG Standards, Frameworks, and Regulation

We previously published this overview table listing ESG (environmental, social, and governance) standards, frameworks, and regulations. As requested, here is a more visual breakdown of the existing rules that offers a high-level take on comparing standards, frameworks, and regulation.

Visualizing The State of Play for Corporate Reporting

Following reader feedback, the tables below separate ESG standards, frameworks, and regulations by three criteria:: are they mandatory, is reporting on value chain emissions (scope 3) required, and how many companies report into it–a helpful indicator for relevance.

The latest on the standards front is the SEC’s Enhancement and Standardization of Climate-Related Disclosures for Investors. All domestic and foreign companies publicly listed in the US, regardless of sector and industry, will be required to comply with the SEC climate-related disclosure rules. These include Scope 1 and 2 emissions disclosures and other climate-related information, and are being phased in from 2025.

Looking at frameworks, it’s worth drawing attention to the Task Force on Climate-related Financial Disclosures (TCFD). While the TCFD itself is not mandatory, it is the most common framework referred to in regulatory efforts across jurisdictions. This is an interesting trend, in particular because TCFD reporting on value chain emissions focuses on carbon intensity only. In short, that means that emissions are reported relative to a specific unit, e.g. x kilograms of CO2e per 1,000€ spend. This way, neither absolute numbers of emissions nor the exact amount of expenses have to be disclosed.

There are regulatory efforts in place or under development across all continents. So far, we’ve captured the ones most frequently referenced in conversations. In most cases, where scope 3 is partly required, the bill references the TCFD framework and hence only requires disclosure of carbon intensity.

The carbon reporting landscape is in a state of evolution. The past couple of years have witnessed many countries introducing carbon reporting as a mandatory requirement. As more and more companies are obliged to report on their emissions, it will be interesting to see the trickle-down effect for scope 3 reporting and carbon visibility in businesses.