Frameworks

Environmental
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Frameworks and Standards
March 11, 2023

An example of an ESG (Environmental, Social, and Governance) framework is the United Nations' Principles for Responsible Investment (PRI). The PRI is a set of six principles that provide a framework for investors to integrate ESG factors into their investment decision-making processes. The six principles are:

  1. We will incorporate ESG issues into investment analysis and decision-making processes.
  2. We will be active owners and incorporate ESG issues into our ownership policies and practices.
  3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
  4. We will promote acceptance and implementation of the principles within the investment industry.
  5. We will work together to enhance our effectiveness in implementing the principles.
  6. We will report on our activities and progress towards implementing the principles.

The PRI framework provides a common language and understanding for investors to engage with companies on ESG issues and to assess the ESG risks and opportunities of their investment portfolios. By adhering to the principles, investors can demonstrate their commitment to responsible investment and contribute to a more sustainable global financial system.

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Frameworks and Standards

European Sustainability Reporting Standards

The ESRS standards are reporting standards for sustainability within the EU. The ESRS standards are an integral part of the CSRD, the Corporate Sustainability Reporting Directive of the European Parliament and the Council. This means that the ESRS reporting standards are mandatory. The adoption of the first set of 12 standards by the Commission is considered a significant step to promote sustainable practices and transparency in companies and to contribute to their comparability. This is because the new reporting requirements herald major changes in sustainability reporting and these will affect around 50,000 companies based in the EU. However, subsidiaries, branches abroad and companies that carry out a large part of their business activities in the EU area may also be indirectly affected, which is why the scope of impact can be significantly broader.
Frameworks and Standards

European Financial Reporting Advisory Group (EFRAG)

EFRAG (European Financial Reporting Advisory Group) is an independent, non-profit organization that provides advice and support to the European Union (EU) on financial reporting and accounting matters.
Frameworks and Standards

Standards

Set of criteria used by investors and other stakeholders to evaluate a company's sustainability and social responsibility practices.
Frameworks and Standards

GRI

GRI (Global Reporting Initiative) is the independent, international organization that helps businesses and other organizations take responsibility for their impacts, by providing them with the global common language to communicate those impacts.
Frameworks and Standards

Board Governance

The role of the board of directors in relation to sustainability is becoming increasingly important as businesses recognize the need to integrate environmental, social, and governance (ESG) factors into their strategies and operations.
Frameworks and Standards

Integrated Reporting Framework

The Integrated Reporting Framework defines integrated reporting as ‘a process founded on integrated thinking that results in a periodic integrated report by an organisation about value creation over time and related communications regarding aspects of value creation.’