Understanding the Global Reporting Frameworks

Pathway to Sustainability Disclosure Going Mainstream

There is growing investor interest in companies engaged in sustainable business activities. Investors want to understand how companies tackle issues such as climate change, gender diversity, or supply chain risks that may have a material impact on their business.

Stock exchanges and regulators develop sustainability and climate disclosure regulations. Currently, 71 - more than half of stock exchanges worldwide have guidance on ESG disclosure; in 2015, it was only 13. Mandatory rules are in 27 markets, of which 16 are emerging markets, accordion to the UN Sustainability Stock Exchanges database.

Harmonizing sustainability disclosure standards will create reliable and comparable ESG data and disclosures, which is increasingly critical to attract capital and investors and prevent greenwashing.

A welcoming step in the convergence of different standards and frameworks are the new sustainability and climate-reporting standards by the IFRS Foundation and the European Sustainability Reporting Standards.

IFRS Sustainability Disclosure standards were launched on June 26, 2023, and ‘take effect’ from January 2024, and the European Sustainability Reporting Standards were launched on July 31, 2023, effective as of January 2024 as well.

The diagram below presents the key milestone in sustainability disclosure going mainstream over the last 20 years.

Source: IFC, 2023

Comparison of Main Disclosure Frameworks and Standards

The table below provides a summary comparison of the major sustainability frameworks and standards, including:

The comparison focuses on the type of instrument and whether it is voluntary or mandatory, its geographic coverage, the topics addressed and definition of materiality. 

comparison of main sustainability disclosure

Comparing US Securities and Exchange Commission (SEC), European Sustainability Reporting Standards (ESRS), and International Sustainability Standards Board (ISSB) Climate Disclosures.

comparison matrix of climate
Source: WB and IFC, 2023, and The Evolution of Sustainability Disclosure: Comparing the 2022 SEC, ESRS, and ISSB Proposals

Comparison studies used for the climate disclosure comparison table:

Standard Setters

Developing a comprehensive solution for corporate sustainability reporting is complex. As a result, global organizations have frameworks, standards, and platforms that shape the landscape and guide the latest sustainability reporting.

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Standard Setters
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