Page 637 - COSO Guidance

5. Information, communication and reporting for ESG-related risks

Many voluntary frameworks have been developed and are widely used to meet the ESG-related reporting
needs of external stakeholders. Table 5.3 details some of the guidance used to support the disclosure of
ESG-related risks and the organization’s management of those issues.

Table 5.3: Existing guidance to support external ESG-related risk disclosures

Framework Addresses financial Description
filings, annual
reports or
ESG-specific reports
b
CDSB Framework Financial filings and • Recommends reporting requirements for disclosing environmental information in
annual reports mainstream reports where that information is material to an understanding of
companies’ financial risks and opportunities, as well as the resilience of their
business models
• Aligns with TCFD recommendations 11
GRI ESG-specific reports • Provides a widely adopted framework for reporting material economic,
environmental, social and governance issues
• Advises reporting on topics that present risks to a company’s business model
12
or reputation
<IR> Framework Annual reports • Provides a framework for integrated reporting on all six capitals (i.e., financial,
manufactured, intellectual, human, social and relationship, and natural)
• Advises entities to disclose the specific risks that affect the ability to create value
over the short, medium and long term and how the organization manages them
13
Recommendations Financial filings • Recommends voluntary disclosures for companies to report on governance,
of the TCFD risk management and impacts of climate change on the organization
• Includes industry-specific guidance 14
SASB Financial filings • Provides a framework for management to assess financial materiality of
c
Implementation sustainability issues, considering risk, for inclusion in financial reports
Guide and • Recommends minimum disclosure requirements by sustainability issue
Reporting
Guidelines • Includes industry-specific guidance 15
Sustainable ESG-specific reports • Offers goals and targets that organizations can consider in presenting their impacts 16
Development
16
Goals

. . . . . . . . . . . . . . . .
b ESG-specific reports refer to annual sustainability reports made publicly available.
c SASB applies the US Supreme Court definition of materiality which is the “substantial likelihood that the disclosure of the omitted fact would have been viewed by the
reasonable investor as having significantly altered the ‘total mix’ of information made available.”
90 Enterprise Risk Management | Applying enterprise risk management to environmental, social and governance-related risks • October 2018