The four non financial reporting standards explained
As companies evolve, so do the requirements for transparency regarding their sustainability and environmental, social, and governance (ESG) impacts.
The demand for non-financial reporting, including tax and corporate governance, has surged, with organizations adopting various frameworks to meet mandatory or voluntary obligations.
This guide will break down the four main non-financial reporting standards: CSRD, ISSB, CDP, and GRI, and provide a detailed comparison to help you navigate through these complex frameworks, including critical elements like corporate sustainability tax reporting and tax disclosures.
What are the main Non-Financial Reporting Standards?
- CSRD (Corporate Sustainability Reporting Directive)
- ISSB (International Sustainability Standards Board)
- CDP (Carbon Disclosure Project)
- GRI (Global Reporting Initiative)
Each of these frameworks serve a different purpose, but with increasing interoperability, companies can streamline their reporting processes and reduce the risk of double reporting, particularly when it comes to tax and non-financial reporting.
General Information and Comparison
Feature | CSRD | ISSB | CDP | GRI |
Standards | ESRS (European Standards) | IFRS | CDP Questionnaires | GRI Standards |
Scope | Europe | Global | Global | Global |
Materiality | Double Materiality | Financial Materiality | Not Required | Double Materiality |
Focus | Multi-Stakeholder | Investor Focus | Investor Focus | Multi-Stakeholder |
Applicability | Mandatory for EU Companies | Voluntary (Unless made mandatory) | Voluntary (but scrutinized by investors) | Voluntary |
Audit Requirement | Mandatory | Varies by jurisdiction | Required for top-tier scores | Recommended but not mandatory |
Scoring | No | No | Yes (4-level classification) | No |
Scope of Environmental, Social, and Governance Topics
Environmental Topic | CSRD | ISSB | CDP | GRI |
Energy | ✅ | ❌ | ✅ | ✅ |
Climate | ✅ | ✅ | ✅ | ✅ |
Pollution | ✅ | ❌ | ✅ | ✅ |
Water | ✅ | ❌ | ✅ | ✅ |
Biodiversity | ✅ | ❌ | ✅ | ✅ |
Circular Economy | ✅ | ❌ | ❌ | ✅ |
Waste | ✅ | ❌ | ✅ | ✅ |
Key Insight: CSRD and GRI offer the most comprehensive environmental coverage, addressing topics like energy, climate, pollution, and biodiversity. ISSB focuses primarily on climate-related disclosures, while CDP covers a range of environmental topics but omits circular economy.
Social Topics Coverage
Social Topics Coverage | CSRD | ISSB | CDP | GRI |
Characteristics of Employees | ✅ | ❌ | ❌ | ✅ |
Social Dialogue | ✅ | ❌ | ❌ | ✅ |
Collective Bargaining | ✅ | ❌ | ❌ | ✅ |
Diversity | ✅ | ❌ | ❌ | ✅ |
Adequate Wages | ✅ | ❌ | ❌ | ❌ |
Social Protection | ✅ | ❌ | ❌ | ❌ |
Health and Safety | ✅ | ❌ | ❌ | ✅ |
Work-Life Balance | ✅ | ❌ | ❌ | ✅ |
Local Communities | ❌ | ❌ | ❌ | ✅ |
Supplier Social Assessment | ❌ | ❌ | ❌ | ✅ |
Customer Health and Safety | ❌ | ❌ | ❌ | ✅ |
Key Insight: CSRD is strong on employee-related social topics such as diversity, wages, and training, while GRI extends its coverage to external social issues such as local communities and supplier assessments. ISSB and CDP do not currently cover social topics.
Governance Topics Coverage
Governance Topic | CSRD | ISSB | CDP | GRI |
Economic Performance | ❌ | ❌ | ❌ | ✅ |
Corruption or Bribery | ✅ | ❌ | ❌ | ✅ |
Political Influence - Lobbying | ✅ | ❌ | ❌ | ✅ |
Procurement Practices | ✅ | ❌ | ❌ | ✅ |
Marketing & Labelling Compliance | ❌ | ❌ | ❌ | ✅ |
Anti-Competitive Behaviour | ❌ | ❌ | ❌ | ✅ |
Tax Governance in ESG Reports | ✅ | ❌ | ❌ | ✅ |
Key Insight: GRI covers all key governance topics, including economic performance, corruption, and anti-competitive behaviour, while also addressing tax transparency in corporate reporting. CSRD focuses on corruption, procurement practices, and tax-related governance issues.
Sector-Specific Standards
Each framework provides sector-specific standards that cater to industries with significant ESG impacts, including tax compliance issues within these sectors.
Framework | Sector-Specific Standards | ISSB |
CSRD | ESRS (to be adopted by 2026) | Oil & Gas, Mining, Agriculture, Motor Vehicles, Food & Beverages, Textiles |
ISSB | SASB Standards (77 sectors) | Consumer Goods, Extractives, Financials, Infrastructure, Technology, etc. |
CDP | CDP Questionnaires | Agriculture, Cement, Coal, Utilities, Real Estate, Transport, Chemicals |
GRI | GRI Sector Standards | Oil & Gas, Coal, Agriculture, Mining, Financial Services, Textiles |
Key Insight: ISSB has the widest range of sector-specific standards with 77 industry-based standards, while CSRD is in the process of developing its sector standards, expected by 2026. Sector-specific tax reporting requirements are expected to align with these standards.
Interoperability of Standards
One of the key challenges in non-financial reporting is avoiding double reporting. To mitigate this, many of these frameworks are working towards interoperability, especially with regards to tax disclosures in sustainability reporting.
Standards | Level of Interoperability | Mapping | Additional Disclosures |
ESRS & IFRS | +++ (Low risk of double reporting) | For climate-related disclosures | Clearly identified in report (ESRS 1-§114), source for additional info (IFRS S1) |
ESRS & GRI | +++ (Low risk of double reporting) | To be released | Clearly identified in report (ESRS 1-§114) |
IFRS & GRI | ++ (Cooperation towards interoperability) | To be released | |
ESRS & CDP | ++ (Alignment of CDP under progress) | Based on draft ESRS | |
IFRS & CDP | ++ (Alignment of CDP under progress) | To be released |
Key Insight: ESRS has strong interoperability with IFRS and GRI, allowing for easier reporting and reduced risk of double reporting, especially for climate-related and tax audit in non-financial reporting. CDP and IFRS are aligning but still require further developments.
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