UN Global Compact: Suitable for beginners, only minimum requirements

The United Nations Global Compact, or UNGC for short, was founded by Georg Kell in 2000 on the initiative of former United Nations Secretary-General Kofi Annan. The aim was and is to shape globalization in a fair, environmentally and socially responsible way. The UNGC is the world’s largest and most important initiative for sustainable and responsible corporate governance. Over 19,000 companies and organizations have signed it – including more than 800 in Germany. The framework formulates ten social and ecological principles in the areas of human rights, labour, environmental protection and anti-corruption, to which the participating companies and organizations are committed. In addition, the UN Global Compact is based on the 17Sustainable Development Goals (SDGs) of the United Nations.

DNK: Good introduction, easy to use, for German-speaking countries

The German Sustainability Code (DNK) was introduced in 2011. The aim is for companies to provide information about their sustainability performance and thus create comparability. Around 800 companies have now published a DNK declaration. The standard comprises 20 criteria that must be reported on. They are divided into the subject areas of strategy, process management, environmental issues and society. When reporting, companies can select either the GRI (Global Reporting Initiative) or EFFAS (European Federation of Financial Analysts Societes) performance indicator set.

GRI: Most established internationally, high effort

The Global Reporting Initiative (GRI) is a foundation that was established in 1997. The GRI guidelines are considered the most important standard for sustainability reports worldwide. The aim of the global standards is to make sustainability reports more comparable through uniform requirements. The guidelines are continuously developed in a dialogue process with companies and civil society organizations. Companies that prepare their sustainability report in accordance with the GRI standards must provide extensive information about the company, the management approach and economic, ecological and social standards. The Global Reporting Initiative has now updated its standards once again. The latest changes apply to all reports published from January 1, 2023.

SDG: Framework with the 17 UN Sustainable Development Goals

The member states of the United Nations adopted the 2030 Agenda for Sustainable Development in September 2015. It includes the 17 UN Sustainable Development Goals, or SDGs for short, which cover all three dimensions of sustainability: Environmental, social and economic. The global goals are to be achieved by all countries by 2030 in order to make the world fairer, healthier, more peaceful and more social. The SDG framework serves as a guide for companies that want to report on their sustainability performance. Guidelines such as the Global Reporting Initiative (GRI) and the UN Global Compact are available to help companies implement the 17 Sustainable Development Goals and the sub-goals in their supply chains. Both guidelines propose indicators and key figures for measuring the sustainability performance of companies for the individual SDGs.

ISSB: global standard for capital market-oriented companies, under development

The International Financial Reporting Standards Foundation is currently developing global standards for the sustainability report of capital market-oriented companies. To this end, the non-profit IFRS Foundation established the International Sustainability Standards Board (ISSB) in Frankfurt. The future standard has great potential to become the leading international framework. The aim of the ISSB is to define minimum standards for credible, transparent and comparable reporting in the area of ESG criteria (environmental, social and governance). For example, companies should specify which key figures they use to measure and monitor sustainability-related risks and opportunities and which strategy they intend to use to manage them.

ESRS: uniform European standard, being developed as part of the CSRD

As part of the new CSRD (Corporate Sustainability Reporting Directive) reporting obligation, a uniform standard is also being introduced. This should make the reports more meaningful and comparable. However, this also increases the amount of work involved. The European Financial Reporting Advisory Group, EFRAG for short, has been tasked with drawing up the European Sustainability Reporting Standards (ESRS). All information on the ESRS can be found in our factsheet.

ISO 14001: good standard for environmental management

ISO 14001 is a globally recognized standard for environmental management systems that was published in 1996. The aim of the international standard is for companies to improve their environmental performance and achieve environmental targets. Around 300,000 companies worldwide are certified to ISO 14001 – around 8,000 of them in Germany. The environmental management system is based on four pillars: the planning of environmental targets, the implementation of the defined measures, monitoring and improvement.

ISO 26000: Guidelines for socially responsible behavior

ISO 26000 was published in 2010 and is a guideline that defines socially responsible behavior. As the standard does not provide for certification, it is not as widely used as ISO 14001, for example. The standard formulates numerous recommendations for action on core issues of social responsibility. These include the environment, human rights, employee rights, customer rights and society.

EMAS: more complex standard for environmental management

The Eco-Management and Audit Scheme, EMAS for short, was developed by the European Union and introduced in Germany in 1995. It is a joint system of environmental management and environmental auditing. The aim is to help companies that want to improve their environmental performance. In Europe, around 4000 organizations are registered under EMAS – over 1100 of them are from Germany. Companies must publish an environmental statement in which they disclose, among other things, their impact on the environment, their environmental performance and their environmental objectives. Employees must be involved in this process. EMAS covers the contents of ISO 14001 and goes even further.

TCFD: Recommendations to the financial sector and capital market-oriented companies

In 2017, the Task Force on Climate-related Financial Disclosures (TCFD), founded on the initiative of the G20 countries, drew up recommendations for voluntary and consistent reporting on the effects of climate change. The recommendations are aimed at the financial sector and capital market-oriented companies. Over 1000 companies worldwide have committed to implementing them. The aim is to provide companies and investors with decision-relevant information on material climate-related financial risks and opportunities. According to the recommendations, information should be provided on governance, strategy, risk management, key figures and targets.

We help you with your sustainability report

The first sustainability report is a challenge, not everything will go smoothly straight away. It is important that you take the first steps and continue to develop with the relevant standards. We will accompany you on this path. We help you to set up a sustainability strategy and with reporting. With our ESG management software , you can collect all relevant sustainability data quickly and clearly.

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.