SASB General Issue Category: Leadership & Governance

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.

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.

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.

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.

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.’

ISO 37000:2021 Governance of organizations — Guidance provides organizations and their governing bodies the tools they need to govern well, enabling them to perform effectively while behaving ethically and responsibly.