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ESG
The Complexity of ESG 
Reporting and Emerging 
Convergence Trends 
BY LOUIS COPPOLA

T
he number of ESG corporate disclosure and reporting standards and frameworks has 
dramatically proliferated in recent years. These reporting standards have not only become 
more numerous, but they have also become more sophisticated and mature. 
With this continuously evolving complexity, it can be challenging to identify the most 
popular frameworks and standards for disclosure are and how to best use them to commu-
nicate your company’s ESG profile to institutional and, increasingly, retail investors. 
While the competition between standards has generated significant innovation, it has also 
led to frustration and confusion for those who have not kept up with everything happening. 
To address the resulting complexity, there have been significant recent announcements 
and efforts from influential players to converge the leading standards into a global, compre-
hensive corporate ESG reporting system. As these efforts move forward, there will be more 
challenges for investor relations professionals to predict the probable outcomes to guide 
their company disclosures. 
Before we dive into how the convergence of ESG reporting standards may play out, I 
want to clarify what I see as a common point of confusion in this market space. This is, ESG 
standard-setters for sustainability reporting are often confused and grouped into the same 
category as ESG data aggregators, analysis providers, ESG raters, and indices. 
For example, IROs may say they are overwhelmed and confused about which standard to 
use in their reporting and proceed to ask, “Should we use GRI, SASB, MSCI, Sustainalytics, 
Bloomberg, Refinitiv, ISS, DJSI, TCFD, IIRC, CDP, FTSE4GOOD, CDSB, or the CSA? Which 
one is most important?” 
It’s important to remember that while all these organizations and acronyms represent 
important players in the ESG ecosystem, they are not all reporting standards and should not 
be grouped into the same category.
It is really important to understand the differences between these players to then be able 
to discuss how to best use them and what the future may look like as convergence and pos-
sible regulations unfold.
Below is a guide to the alphabet soup of organizations and acronyms:
Reporting Standards/Frameworks
	o
Global Reporting Initiative (GRI)
	o
Sustainability Accounting Standards Board (SASB)
	o
International Integrated Reporting Council (IIRC)
	o
Task Force for Climate Related Financial Disclosure (TCFD)
	o
Climate Disclosure Standards Board (CDSB)
A review of the alphabet soup 
of ESG standard-setters, data 
aggregators, analysis providers, 
ESG raters, and indices and reports 
on convergence trends that will 
affect ESG disclosure for IROs.
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These organizations provide guidance for how a company 
should disclose ESG information in a public report/disclo-
sure document. They do not grade, rank, analyze or score 
the disclosures from these companies, but simply provide 
the structure for how companies should communicate about 
these topics to investors and other important stakeholders.
In the traditional financial world, compare these to finan-
cial reporting guidance such as Generally Accepted Accounting 
Principles (GAAP), International Financial Reporting Standards 
(IFRS), Financial Accounting Standards Board (FASB), Inter-
national Accounting Standards Board (IASB), etc.
Analysis Providers/Raters/Rankers
	o
MSCI
	o
Sustainalytics
	o
Institutional Shareholder Services (ISS)
These organizations have armies of analysts who read 
through your sustainability reports, websites, policies, codes, 
and other public disclosure documents to analyze your 
company’s ESG profile; plug it into their models and rating 
methodologies; and provide scores, opinions, and analysis 
reports to their investor clients.
In the traditional financial world, these compare to sell-
side analysts who also apply a score (buy, sell, hold, etc.) They 
also compare to credit rating agencies as many of them also 
evaluate risk, issuing ratings such as AAA, BB, etc.
ESG Data Providers
	o
Bloomberg
	o
Refinitiv
These organizations also have analysts who read through 
your public disclosures, but instead of applying analysis, 
scores, and opinions, they supply raw data points on each 
company through their platforms (think of The Bloomberg, 
Eikon, etc). A sophisticated ESG investor would use this 
raw ESG data to create their own customized methodology 
(selecting the topics that they feel are most material, and/
or customizing/weighting to the values of their clients) for 
analyzing companies for investment decisions. 
In the traditional financial world, these are easy to compare, 
as most are familiar with what Bloomberg and Eikon termi-
nals offer. ESG data is an expansion of the raw data offered 
in these platforms.
Indices
	o
Dow Jones Sustainability Indices (DJSI)
	o
Financial Times Stock Exchange Group FTSE4GOOD
	o
S&P 500 ESG Index
The Dow Jones Sustainability Indices are a set of indices 
where constituents are determined by their performance 
in the Corporate Sustainability Assessment (CSA), which is 
an ESG questionnaire that companies respond to each year 
(now owned by S&P Global after a recent acquisition). The 
FTSE4GOOD is another popular index of ESG leaders that 
operates in the United Kingdom. S&P Global is rolling out new 
ESG benchmarks. 
In the traditional financial world, these are compared to 
indices such as the S&P 500 index, which now has a sister index 
called the S&P 500 ESG index.
Sustainability Questionnaires
	o
CDP
	o
S&P Corporate Sustainability Assessment (CSA)
These organizations each have an online questionnaire that 
companies respond to each year. Based on these responses 
they are assessed and a score is assigned (and in the case of 
CSA, index inclusion decisions are made for DJSI indices and 
a series of S&P ESG indices). 
An Overlapping Issue
Despite the discrete categories noted above, a small disclaimer 
is needed: There is some overlap among these categories.
For example, some ESG data provider organizations also 
provide ESG ratings (mostly based on disclosure/transparency) 
for various categories but not the additional layer of analysis 
and opinion on performance. 
Another example is that the S&P CSA (the annual Corporate 
Sustainability Assessment that companies respond to) provides 
ESG ratings from the results of their assessment and these are 
then available on the Bloomberg and Capital IQ terminals as 
secondary sources. Yet another example is the CDP response 
which is also scored by CDP (A+, B- etc.) and made available 
publicly and on the Bloomberg  terminal. Some companies 
also publish copies of their CDP response on their website (a 
good practice) so that the information contained in it serves 
as a public disclosure document.
The ESG Ecosystem
Despite this somewhat confusing structure, in reality only a 
handful of the standards and organizations should be con-
sidered when deciding on which reporting standard to use. 
The acronyms to consider for ESG disclosure are GRI, SASB,

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IIRC, TCFD, and CDP. The rest of these organiza-
tions are important to know about, consider, 
and engage as needed, but they are not report-
ing standards or frameworks. However, they do 
inform disclosures in various ways. 
It is important to understand that using one or 
more leading ESG reporting standards for sustain-
ability reporting will lead to better information 
efficiency, availability, accuracy, comparability, 
and quality for both the information providers 
(companies) and the information users (investors, 
raters, index creators, analytics/data providers, 
and other stakeholders). 
ESG Disclosure Standards/
Frameworks 
ESG disclosure standards and frameworks can 
be categorized to enhance understanding and 
identify key players. Keep in mind that these 
categories have some overlap and players within 
each category are different.
Category 1: Broad Disclosure Standards 
(broadly encompassing E, S, and G topics)
Standards such as GRI, SASB and IIRC fall into this category.
These reporting standards provide guidance for companies 
to publicly report on a wide array of E, S, and G issues. There 
are many differences among them, however.
For example, when it comes to the materiality of topics, GRI 
follows a stakeholder-inclusive model of materiality (think what 
information is important to employees, customers, and inves-
tors), whereas SASB and IIRC follow a more strict definition of 
financial materiality focusing on one important stakeholder: 
the investor. This by design tends to align with the current SEC 
definition of material information for investors.
Due to the difference in the way materiality is defined by 
each standard, GRI reports often cover a much broader set of 
topics of interest to an array of important stakeholders, while 
SASB reports are typically focused on a shorter list of highly 
material industry-specific topics of interest to investors. 
Of course, there is some overlap here, as ESG initiatives 
that build stronger relationships with customers or employees 
often lead to benefits for the investor such as higher produc-
tivity, higher revenue, lower costs, more value, and superior 
company performance.
When a company is deciding what to include in a report, 
SASB provides guidance for 77 industry categories on which 
topics and disclosures are likely to be financially material for 
companies in each industry. By contrast, GRI does not prescribe 
categories, but instead provides a process with key principles 
that each company can use to engage with their stakeholders 
and determine what is uniquely material to their company, 
investors, and other important stakeholders.
In practice, many companies use a hybridized disclosure 
approach, implementing guidance and disclosures from 
both GRI and SASB standards in their reports. Many will 
include content index tables for each disclosure standard 
in the back of their reports, allowing readers to navigate 
the report using multiple standards. Many companies also 
use the SASB guidance for their industry to inform a wider 
GRI-style stakeholder inclusive materiality assessment (in 
effect using SASB inputs on material topics as a proxy for 
investor stakeholder interest).
Category 2: Topic-Specific Standards  
(generally focusing on one topic more 
granularly, such as climate or human rights)
Frameworks such as CDP, the Task Force on Climate-Related 
Financial Disclosures (TCFD), Climate Disclosure Standards 
Board (CDSB), and the United Nations Guiding Principles on 
Human Rights (UNGP) focus on a specific topic and really dive 
In practice, many companies 
use a hybridized disclosure 
approach, implementing 
guidance and disclosures 
from both GRI and SASB 
standards in their reports.

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in and get more granular and specific on that topic than the 
broad disclosures standards would.
These information resources provide a way for companies 
to enhance and elaborate on their disclosures in these key 
areas that can complement the broader reporting standards 
such as GRI, SASB and IIRC.
For example, CDP, TCFD and CDSB all focus on climate 
change as a topic and these three frameworks are highly 
complementary and aligned by design. They go into granular 
detail on climate change such as governance of climate risk, 
target setting, energy usage, emissions, integration into ERM 
processes, executive compensation ties, scenario analysis 
planning, opportunities, and risk, among other topics.
Another example is UNGP, which provides disclosure 
guidance to companies for the topic of human rights. UNGP 
disclosure guidance includes many sub-topics under human 
rights such as child labor, forced labor, gender diversity, ethnic 
diversity, and the right to organize, among other topics.
CDP also falls into the  survey/questionnaires category 
(Category 3 below) as companies need to directly respond to it, 
whereas TCFD is guidance for preparing public disclosures and 
reports on the topic. If a topic is highly material to a company, 
a topic-specific standard can be helpful for the company to 
really dive into the details of the topic for investors and other 
stakeholders.
Climate change and human rights are current topics that 
many investors consider to be material in almost every sec-
tor and industry in different ways, and this is why CDP, TCFD, 
CDSB, and UNGP have generated so much traction and broad 
acceptance recently.
Category 3: Survey/Questionnaires 
(companies need to respond to a survey – can 
be broad or topic-specific)
There are various survey questionnaires that companies fill 
out which should be categorized differently than the public 
disclosure frameworks. For example, the S&P Corporate Sus-
tainability Assessment (CSA) and the CDP questionnaires fall 
into this category. These two questionnaires in particular are 
extremely important to consider and respond to.
A company must login to an online portal and complete a 
series of comprehensive questions which are then assessed and 
scored by the organization. CSA covers a wide variety of topics 
across ESG (but applies a sector-specific weighting and selec-
tion of topics and questions), while CDP focuses the questions 
on the topic in focus for the survey (CDP now has at least four 
separate questionnaires covering climate, water, forestry, and 
supply chain, but its climate response is the most well known).
The CSA results are used to rebalance the Dow Jones 
Sustainability Indices (DJSI), the S&P 500 ESG index (and 
others in this family), and the CSA scores are available on the 
Bloomberg Terminal, the Capital IQ terminal, and will be used 
going forward throughout the S&P Global organization. The 
CDP response is used to create your company’s CDP scores, 
which are also available on the Bloomberg Terminal. They are 
often posted by companies on their websites as a disclosure 
document and used in many different institutional investor 
decision making processes. In addition, a comprehensive 
CDP response can significantly help a company get started on 
a good TCFD report as there is already significant alignment.
Organizations in this category are not really providing pub-
lic disclosure guidance (as you would not develop your own 
public report using their frameworks) but are nonetheless very 
important to consider as you develop your entire ESG invest-
ment profile. The effort and information gathered during the 
response is extremely valuable and can be utilized in aspects 
of your public disclosure and/or ESG report.
ESG Convergence Trends
Several exciting initiatives are underway to align the leading sus-
tainability reporting organizations and provide comprehensive 
guidance to companies on how to gather and report on data 
efficiently through the right channels to various stakeholders.
This collaborative work will help lead to more valuable 
information for investors and other stakeholders, and less 
confusion among companies and other players.
Two of the most promising initiatives include:
	o
Statement of Intent to Work Towards Comprehensive 
Corporate Reporting – This is an effort led by the leading 
sustainability and integrated reporting organizations 
(CDP, CDSB, GRI, IIRC and SASB), facilitated by the Impact 
Management Project, World Economic Forum, and Deloitte, 
to collaborate and develop comprehensive ESG reporting 
guidance that will allow companies to gather data on each 
topic once and then disclose in various channels using the 
best of each standard in a hybrid approach.
	o
IFRS Foundation Consultation Paper on Sustainability 
Reporting – IFRS has published a consultation paper which 
explores whether there is a need for global sustainability 
standards, whether the IFRS Foundation should play a role, 
and what the scope of that role could be. IFRS has received 
462 publicly available pieces of feedback.

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These initiatives build upon previous initiatives 
such as (a small sampling, there are many more):
	o
Corporate Reporting Dialogue (CRD)
	o
GRI and SASB Collaboration Promoting 
Clarity and Compatibility in the Sustainability 
Landscape
	o
Converging on Climate Risk: CSDB, the SASB, 
and the TCFD
The Outlook for 2021
In practice, there are many companies spearhead-
ing hybridized standard approaches to their ESG 
reporting.
We look forward to the continued progress that 
these initiatives are pushing forward to formalize 
alignment, convergence, and guidance that will 
come out of them. They will help to mature and 
accelerate the progress being made by leading 
companies already experimenting on how to best 
report on ESG.
Neil Stewart, Director of Corporate Outreach 
at SASB, believes, “the IFRS Foundation potentially creating 
a global sustainability standards board is the biggest thing to 
happen to accounting since the creation of the IFRS.” 
 Stewart also made it clear that “this type of comprehensive 
guidance on standardized disclosure should make ESG report-
ing less burdensome to companies, lead to less confusion, and 
increase the quality of data to investors.” 
SASB and IIRC recently announced that they will merge by 
mid-2021 under the umbrella of the Value Reporting Foundation. 
One goal of this merger is to help move closer to the ideals 
of the “Statement of Intent to Work Towards Comprehensive 
Corporate Reporting” of the “big five” sustainability reporting 
standards organizations (now in effect only four). Stewart noted, 
“SASB Standards and the IR framework will remain separate 
but complementary tools.”
These convergence efforts are also critical in creating the 
foundation by which disclosure regulations can be enhanced, 
created, and implemented. As we’ve seen in various regulations 
around the world (such as the EU Directive for Non-Financial 
Reporting), the regulators are not looking to create another 
standard, but to reference and build upon the industry best 
practices already being implemented.
Stewart adds, “There is no better time than now to make 
this happen – pent-up demand from the investment world at 
large should help to remove the barriers which have kept this 
from happening in the past.”
These types of efforts among the leading players in the 
space, combined with investor and societal demand, and a 
new SEC chair could push the needle forward on mandated 
disclosures.
A Historical Comparison
What we are seeing today has some parallels to the maturing of 
financial disclosure. Less than 100 years ago, before the stock 
market crash of 1929, publicly traded companies were not even 
required to publish financial disclosures. There were various 
attempts by forward-thinking companies to voluntarily do so 
in response to investor demands – and even without definitive 
standards (such as GAAP and FASB). 
After the 1929 crash, the SEC was granted authority by the 
U.S. Congress to set standards and accounting practices and 
corporate financial reporting. Congress then by law delegated 
this responsibility to industry groups that now make up FASB 
and GAAP. 
In 2021, I believe that this is where we are heading with ESG 
disclosures. It’s been a long time coming, and the time is now! IR
Louis Coppola is Co-Founder & Executive Vice President at 
Governance & Accountability Institute, Inc.; lcoppola@ga-
institute.com.
These convergence efforts 
are also critical in creating 
the foundation by which 
disclosure regulations  
can be enhanced, created, 
and implemented.