ESG Reporting Frameworks and Standards
ESG reporting frameworks are sets of guidance which can be used by companies against which they can disclose data on their business operations related to the environmental, social and governance (ESG) aspects of their operations. ESG Standards are detailed, measurable and specific requirements which can be used to guide disclosure to a given reporting framework. While some shipping companies will be obliged to report their ESG compliance against national or regional reporting frameworks (e.g. under the EU’s Corporate Sustainability Reporting Directive (CSRD) or the EU Taxonomy Regulation), others may wish to choose a framework (or frameworks) against which to voluntarily report, depending on their industry sector or ESG priorities.
The buttons below provide links to just a few globally applicable reporting frameworks and standards which companies, including shipping companies, might voluntarily choose to report their activities against to demonstrate the ESG activities of their business.
Global ESG Frameworks and Standards Examples
2023 IMO Strategy on Reduction of GHG Emissions from Ships
The revised International Maritime Organization’s GHG Strategy, adopted in 2023, includes an enhanced common ambition to reach net-zero GHG emissions from international shipping close to 2050, a commitment to ensure an uptake of alternative zero and near-zero GHG fuels by 2030, as well as indicative check-points for 2030 and 2040.
Shipping companies may use the IMO Strategy as guidance in setting of their decarbonisation goals in their ESG disclosure.
United Nations Sustainable Development Goals (UN SDGs)
The SDGs are a set of 17 global objectives that aim to address the world’s most pressing environmental, social, and economic challenges. The SDGs provide a common language and framework for organisations to align their strategies and activities with global sustainability goals, and to report on their contributions to achieving the goals. Organisations may disclose their progress towards achieving the UN SDGs by using ESG reporting frameworks, such as the CDP, GRI, and SASB frameworks.
Shipping companies may choose to base their ESG reporting on the standards and targets set by the UN SDGs when disclosing data about environment, social and governance factors.
IFRS International Sustainability Standards Board
The International Sustainability Standards Board (ISSB) Standards 1 and 2 create a common language for disclosing to investors the effect of sustainability-related and climate-related risks and opportunities on a company’s prospects. Since November 2023, companies applying S1 and S2 will also meet the recommendations made by the Task Force for Climate Related Disclosures, as the framework has been subsumed into the work of the IFRS ISSB standards.
Shipping companies may use the ISSB S1 and S2 standards as a tool to assist their disclosure of climate-related risks and opportunities for their company.
Sustainability Accounting Standards Board (SASB Standards)
Sitting under the remit of the ISSB, the SASB Standards are designed to identify and standardise disclosure for the sustainability issues most relevant to investor decision-making in each of 77 industries, including the maritime sector. The SASB Standards can enable industry-based disclosures about sustainability-related risks and opportunities that could reasonably be expected to affect the entity’s cash flows, access to finance or cost of capital over the short, medium or long term.
Shipping companies may choose to use the SASB standards as a tool to assist in their disclosure of sustainability related data.
Global Reporting Initiative ESG Standards (GRI ESG)
The GRI Standards represent global best practice for reporting publicly on a range of economic, environmental and social impacts. The GRI Standards is a modular system of three interconnected standards each listing disclosures relevant to a particular topic. Using these Standards to determine what topics are material (relevant) helps organizations to achieve sustainable development.
Shipping companies may choose to use the GRI standards as a tool to assist in their disclosure of sustainability related data.
Task Force on Nature Related Financial Disclosures (TNFD)
The Task Force on Nature Related Financial Disclosures builds on the framework of the Task Force on Climate-related Financial Disclosures, with a focus on an organisation’s impact on ecosystems and biodiversity. The TNFD released its final recommendations
Shipping companies may choose to disclose their ESG related information based on the recommendations outlined in the TNFD.
How to choose a reporting framework
There are many more ESG reporting frameworks and standards available to shipping companies looking to disclose their data or compile an ESG report or strategy. Ultimately, it is up to shipping companies to make a decision about which reporting framework and standard is right for them.
This decision might be based on:
- Materiality*
- Determining which ESG issues are appropriate for you and your company depending on your specific ESG risks and opportunities.
- Stakeholder expectations
- Considering what stakeholders, investors and customers might be looking for information on, and tailoring disclosure accordingly.
- Sector preference
- Deciding on a framework and set of standards which are appropriate to your specific industry segment.
- Methodology
- Establishing whether a framework or standard uses a methodology which is compatible with accessible data about your company’s business activities.