ESG on the Clock: What are ESG Frameworks?
ESG on the Clock is designed for those starting their environmental, social, and governance (ESG) journey.
In this episode, Mandi McReynolds, VP, Global Environmental, Social, and Governance at Workiva, explains the ins and outs of ESG frameworks and how organizations select the right one for their ESG strategy.
Trusted ESG frameworks include the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-related Disclosures (TCFD), and insights and opinions from peers, stakeholders, and investors are crucial to choosing the best one for your organization.
S1 Episode 4: What are ESG frameworks? | Transcript
Hello. We're going to unpack for you today the framework world of environmental, social, and governance. It's pretty simple when we boil it down to these two factors. What are these frameworks? Why do they exist? And then how do you select a framework that's right for your organization?
So first, let's talk about what the frameworks are. They're simply tools needed for business leaders and investors to really advance the development of environmental, social, and governance disclosure standards. So you may have heard of a few of them like SASB, which is the Sustainability Accounting Standards Board, or you might have heard of TCFD, which is the Task Force on Climate-related Disclosures. These are two of some of the most predominant ones.
One really aligns to the International Sustainability Standards Board, working on what are going to be the global or international standards for how we think about different environmental, social, governance, and TCFD is an alignment framework that we've seen governments like the SEC or the UK or members in the APAC communities and in countries align their climate disclosures to.
So how do you choose a framework that is right for your organization? First, it's important to talk to your stakeholders. Talk to your investors. Look at your peer analysis. See what your peers are disclosing. Ensure that you are disclosing to the right framework that your community needs.
Second, where does it have the largest impact for your business to make a strategy decision? Is knowing that disclosure or that information going to help you have a stronger financial impact on your organization or a stronger society impact?
I'll give you an example of Workiva. We chose to align to the UN Sustainable Development Goals. The reason for that is we were a part of a global community, and we believed that it was important that not only did we have the financial impact, but we were discussing what was going to be our large impact to the society as a whole. Because of that, we made the strategic decision to join the CFO Coalition for the SDGs.
For CFOs are colliding their financial investments with the UN SDGs and we could be a part of the conversation for how companies of all sizes could make this impact in their organization and the communities of which they are part. So how do you determine what frameworks are right for you? Talk to your stakeholders and align it to your business strategy.