Elevating Environmental, Social, and Governance Reporting in Emerging Markets
International Finance Corporation (IFC)
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Abstract: As the level of interoperability between sustainability disclosure standards and frameworks increases, a global baseline for sustainability disclosures is evolving, and evidence from independent analyses indicates that there is already a high degree of alignment between the European Sustainability Reporting Standards (ESRS) and Global Reporting Initiative (GRI), as well as the ESRS and International Sustainability Standards Board (ISSB). The analysis presented in this report adds to this work, providing a benchmarking assessment of the International Finance Corporation Disclosure and Transparency (IFC D&T) Framework against the ISSB, ESRS, and GRI reporting standards. The IFC D&T Framework components used in this study consisted of the D&T Toolkit: Beyond the Balance Sheet; the IFC Performance Standards on Environmental and Social Sustainability (IFC PSs), and the IFC Corporate Governance Methodology (collectively known as IFC ESG Standards); and the IFC Climate Governance Progression Matrix. Whilst the ESRS and the ISSB sustainability disclosure requirements have become mandatory following their adoption in EU and ISSB worldwide jurisdictions, users of GRI Standards and the IFC D&T Framework are well positioned to comply with the legal requirements, as this benchmarking analysis demonstrates. The objective of this analysis is to identify areas of alignment between IFC and ISSB, ESRS, and GRI standards to assist IFC D&T Framework users (companies, banks, stock exchanges, regulators, partners) in emerging markets to prepare for these requirements and ensure alignment with current sustainability disclosure standards. By leveraging IFC’s presence in emerging markets, this effort aims to support businesses, stock markets, and other stakeholders in implementing the new ISSB and ESRS standards while bridging gaps between various standards and frameworks and reducing administrative burden associated with reporting. This report can also be used for detection and prevention of greenwashing, as it helps companies improve their sustainability reporting and navigate through different standards and frameworks. The approach adopted for this study involved assessing the alignment between the strategic purposes and approaches of the standards. This was followed by a high-level review of the topic areas covered, culminating in a detailed analysis of the specific texts of comparable guidance and requirements. The report presents conclusions on the level of alignment between each section of the IFC D&T Framework and the other aforementioned standards. Summary tables indicate whether there was “strong,” “some,” or “weak” alignment between the IFC D&T Framework components and the i) strategic purpose, ii) general Elevating Environmental, Social, and Governance Reporting in Emerging Markets ix requirements and iii) environmental, social, and governance topic requirements of each standard