Why ESG reporting frameworks are becoming increasingly complex
The ESG reporting landscape has evolved rapidly over the past decade. What began as largely voluntary sustainability reporting has developed into a complex ecosystem of standards, frameworks and regulations shaped by investors, regulators, policymakers and broader stakeholder expectations.
Today, organisations may encounter multiple reporting requirements at the same time. A company operating internationally could prepare disclosures aligned with GRI Standards, investor‑focused metrics under SASB or ISSB, and mandatory regulatory reporting under the CSRD or California climate disclosure requirements.
While many of these frameworks address similar sustainability themes – such as climate change, governance, workforce practices and emissions reporting – they differ significantly in purpose, materiality approach, intended audience and disclosure depth. As a result, organisations increasingly need to understand not only what each framework requires, but also how they interact in practice.
The challenge is not simply regulatory compliance. It is developing a reporting approach that remains consistent, decision‑useful and operationally manageable across different stakeholder expectations and jurisdictions.
Understanding the role of GRI
The Global Reporting Initiative (GRI) is one of the most widely used sustainability reporting standards globally. GRI Standards are designed to help organisations report on their most significant impacts on the economy, environment and people, including impacts on human rights across the value chain.
A defining feature of GRI is its impact‑materiality, stakeholder‑oriented approach. Rather than focusing only on financially material risks to the organisation, GRI emphasises outward impacts – how the organisation affects people, communities, ecosystems and broader economic systems.
GRI reporting often covers topics such as:
Climate change and greenhouse gas emissions
Energy and resource use
Human rights and labour practices
Community impacts and social investment
Waste, pollution and biodiversity
Governance, ethics and anti‑corruption
Because of its broad scope, GRI is frequently used for corporate sustainability reports intended for a wide stakeholder audience including employees, NGOs, communities, regulators and investors.
In practice, GRI provides comprehensive sustainability coverage and flexibility, though its breadth can be operationally demanding for organisations that must also comply with more prescriptive regional regulations.
The investor‑focused approach of SASB
The Sustainability Accounting Standards Board (SASB) framework was developed with a more financially focused perspective. SASB Standards identify the subset of ESG issues most relevant to financial performance and enterprise value for 77 industries.
SASB is highly industry‑specific. It provides sector‑tailored disclosure topics and metrics, recognising that material sustainability issues for oil and gas companies differ from those for healthcare, software or retail. This industry‑based design makes SASB particularly useful for capital markets that seek decision‑useful, comparable ESG data.
The framework has become influential among investors because it links sustainability performance directly to financial risk, operational resilience and long‑term value creation. Today, SASB Standards also serve as a key input to ISSB’s IFRS S1 and S2, reinforcing their role in investor‑oriented reporting.
Many organisations use SASB alongside broader sustainability frameworks such as GRI – GRI to address impact‑materiality and stakeholder needs, and SASB to strengthen investor‑focused disclosures.
ISSB and the push towards a global baseline
The International Sustainability Standards Board (ISSB) was established to create a globally consistent baseline for sustainability‑related financial disclosures. Its standards build on SASB and TCFD concepts while aiming to improve comparability across markets.
ISSB Standards focus on financially material sustainability‑related risks and opportunities that could reasonably be expected to affect enterprise value. IFRS S1 sets general requirements for sustainability‑related financial information, while IFRS S2 addresses climate‑related disclosures in detail.
A key objective of ISSB is interoperability. Guidance published by ISSB and European bodies highlights a high degree of interoperability between ISSB Standards and ESRS, and further work is underway to clarify how companies can filter CSRD/ESRS disclosures to surface the ISSB global baseline for investors.
Compared with GRI, ISSB focuses on financial materiality and investor needs. Compared with the CSRD, ISSB generally requires less extensive disclosure on wider societal impacts, reflecting its enterprise‑value orientation.
For multinational organisations, ISSB may help simplify investor‑facing sustainability reporting by promoting greater consistency across global financial markets, while other frameworks continue to address broader stakeholder expectations.
California climate disclosure requirements
California’s climate disclosure legislation represents a regulatory, rather than purely voluntary, reporting framework. Recent laws require many large companies doing business in California to disclose their greenhouse gas emissions and climate‑related financial risks.
Key features of California’s climate package include:
Annual public disclosure of Scope 1 and Scope 2 emissions, and Scope 3 emissions for in‑scope companies above specified revenue thresholds.
Climate‑related financial risk reporting, including description of material climate risks and strategies to mitigate or adapt to those risks.
Application to entities formed under US law that “do business” in California, regardless of headquarters location, above defined revenue levels.
Compared with broader ESG frameworks such as GRI or CSRD, California’s rules are more narrowly focused on climate‑related disclosures, particularly emissions and financial risk. However, their operational impact can be significant, especially for organisations with complex value chains and material Scope 3 emissions, given the requirement for reasonably assured, decision‑useful emissions data.
The CSRD and the European double‑materiality model
The Corporate Sustainability Reporting Directive (CSRD) is one of the most comprehensive mandatory ESG reporting regulations globally. It significantly expands sustainability disclosure requirements for companies operating within or connected to the EU market.
The CSRD adopts a double‑materiality approach, requiring organisations to assess both:
How sustainability issues affect financial performance and enterprise value (financial materiality), and
How the organisation’s activities impact society and the environment (impact materiality).
The directive is implemented through the European Sustainability Reporting Standards (ESRS), which set detailed, topic‑specific disclosure requirements across environmental, social and governance areas, including climate, biodiversity, workforce, business conduct and value‑chain impacts.
The CSRD places strong emphasis on assurance, internal controls and alignment with financial reporting, with reasonable assurance over climate disclosures expected by the end of the decade. This makes CSRD one of the most demanding frameworks from a data, governance and audit‑readiness perspective.
Comparing materiality approaches across frameworks
One of the most important distinctions between ESG reporting frameworks is how they define and apply materiality.
GRI focuses on impact materiality, i.e. an organisation’s most significant impacts on the economy, environment and people.
SASB and ISSB prioritise financial materiality, focusing on sustainability topics that are most likely to influence enterprise value and investor decisions.
California climate rules centre primarily on climate‑related financial risks and emissions transparency, aligned with broader market and policy concerns.
CSRD/ESRS combine both perspectives through double materiality, capturing financially material risks and outward impacts on people and the environment.
These differences influence what organisations disclose, how they conduct materiality assessments, and how they structure governance and stakeholder engagement processes.
For organisations operating across multiple jurisdictions, materiality alignment has become crucial because disclosures prepared under a financial‑materiality lens may not fully satisfy double‑materiality or impact‑materiality expectations.
Differences in scope, audience and reporting depth
The frameworks also differ in intended audience, thematic scope and disclosure granularity.
GRI is broad and stakeholder‑oriented, covering a wide range of sustainability topics and designed for multi‑stakeholder audiences.
SASB and ISSB are investor‑focused, centred on financially material sustainability information relevant to capital markets.
California climate rules are regulatory and climate‑specific, with a strong focus on emissions and climate‑financial risk transparency.
CSRD combines regulatory compliance with extensive ESG transparency expectations across environmental and social issues under double materiality.
CSRD and ESRS generally require far more detailed narrative, metrics, governance information and value‑chain coverage than most voluntary frameworks. This creates practical challenges around data collection, internal coordination, reporting timelines and assurance readiness.
Why organisations increasingly use multiple frameworks together
In practice, many organisations do not rely on a single reporting framework. Instead, they combine multiple standards and regulations depending on stakeholder expectations, investor requirements and geographic exposure.
A common layered approach might include:
Using GRI for broader sustainability and impact reporting to stakeholders.
Applying SASB or ISSB for investor‑oriented, financially material disclosures.
Complying with CSRD/ESRS requirements for EU entities and value‑chain coverage.
Meeting California climate disclosure rules for in‑scope US operations.
This multi‑framework strategy helps organisations address different stakeholder needs while minimising duplication where disclosures overlap, supported by emerging interoperability guidance between ISSB, ESRS and GRI.
However, managing multiple frameworks also requires stronger governance structures, clear reporting ownership, integrated ESG data systems and a robust materiality process that can serve different lenses simultaneously.
The future of ESG reporting convergence
Although ESG reporting frameworks remain fragmented, there is growing pressure for greater alignment and interoperability to reduce reporting burden and improve usability.
ISSB’s development reflects one attempt to establish a global baseline for investor‑focused disclosures, while memoranda of understanding and interoperability indices between GRI, ESRS and ISSB point to closer technical alignment over time.
At the same time, regional differences are likely to persist as jurisdictions pursue different policy objectives, stakeholder priorities and regulatory philosophies. For organisations, the focus is shifting from understanding each framework in isolation to building flexible reporting systems capable of adapting to evolving global requirements.
In this environment, comparative understanding of GRI, SASB, ISSB, California rules and CSRD becomes essential not only for compliance, but also for maintaining consistent, credible and decision‑useful ESG reporting across markets.