ESG reporting is growing
ESG reporting is increasing amongst ASX 200 companies.
For example:
In 2021 1 :
- 87% of ASX 200 organisations reported their ESG (up 29% from 2020)
- 38% of ASX 200 organisations disclosed a timeframe around ESG goals and strategies
There are various ESG reporting frameworks and standards in Australia
The more common external and established frameworks and standards used in Australia are:
- International Sustainable Standards Board (ISSB) framework
- Global Reporting Initiatives (GRI) standards
- United Nations Sustainable Development Goals
- B Impact Assessment (more common amongst small-medium organisations)
For more information and examples of these frameworks, see the ESG frameworks and standards section.
Challenges for stakeholders and organisations
Many organisations and investors have reported feeling overwhelmed by the diverse frameworks and standards for ESG. 2 It can therefore be difficult for organisations to identify leading practices for various ESG indicators and measures, particularly social and governance measures. 3
Social criteria are under-reported and under-practiced in Australia
Despite the growing demands for ESG reporting, reporting on the social criteria measures, standards, and practice have remained underreported in Australia (for example, gender diversity policy etc.)
For example:
In Australia, although a majority of ASX 200 organisations report on their ESG (87% in 2021) only:
- 47% of these organisations have a gender diversity policy with measurable targets and metrics and
- 24% of these organisations have a Reconciliation Action Plan endorsed by Reconciliation Australia. 4
D&I is in every ESG reporting framework and standards
Irrespective of which externally issued and recognised ESG framework and standard chosen, D&I is a focus for all of them. For example, GRI has 8 standards which cover D&I areas such diversity and equal opportunity, non-discrimination, supplier social assessment, etc. See ESG frameworks and standards section for how each of these frameworks and standards connect with D&I.
Evidence-based measures and standards for social criteria will strengthen ESG reporting
Below are some measures and standards for measuring social criteria available in Australia.
Examples of social measures, standards, and frameworks:
- DCA’s Inclusive Employer Index
- WGEA’s Gender Equality Standards Instrument and Gender Equality Indicators
- GRI reporting has various standards including standards for human rights related disclosures (referencing the UN Guiding Principles on Business and Human Rights)
- ISSB within the IFRS 1 aim to capture social dimensions of business practice which includes (but not limited to) diversity and inclusion, modern slavery, occupational health and safety, modern slavery, etc.5
See ESG frameworks and standards, D&I data and Deciding how to measure D&I data sections for more information.
- PwC, “ESG Reporting Improves among the ASX 200 - but Are We Getting the Full Story, or Just the Good Story?” 2021.
- Satyajit Bose, “Evolution of ESG Reporting Frameworks,” in Values at Work: Sustainability Investing and ESG Reporting (Springer).
- Standards Australia, “Standards: The Building Blocks of Trust for Australia’s ESG Investing Landscape.”
- PwC, “ESG Reporting Improves among the ASX 200 - but Are We Getting the Full Story, or Just the Good Story?”
- ESG Centre for Excellence, “Sustainability Reporting: Key Issues and Implications for Australian Entities and Their Boards,” CPA Australia, 2024.