Framework for reporting environmental and social information

The CDSB Framework for reporting environmental and social information is designed to help organisations prepare and present environmental and social information in mainstream reports for the benefit of investors. It allows investors to assess the relationship between specific environmental and social matters and the organisation's strategy, performance and prospects.

The first CDSB Framework, the Climate Change Reporting Framework, released in 2010, focused on the risks and opportunities that climate change presents to an organisation’s strategy, financial performance and condition.

In 2015, following two public consultations, the CDSB Framework for reporting environmental and climate change information was released. The CDSB Framework was updated in April 2018 to align with the recommendations of the Task Force on Climate-related Financial Disclosures and other key mainstream reporting requirements, helping to streamline the reporting cycle for many organisations.

In light of changing market and user demands, the scope of the CDSB Framework was expanded to include social as well environmental, including climate change, information. Following public consultation, the CDSB Framework for reporting environmental and social information was released in 2022.

Through the provision of robust environmental and social information, CDSB hopes to encourage analysis and decision-making by investors that recognise the dependence and impacts of economic and financial stability on natural, human and social capital.

The objectives of the CDSB Framework are to:

• Help companies translate their sustainability information into long-term value;
• Provide clear, concise and consistent information to investors, connecting the organisation's sustainability performance to its overall strategy, performance and prospects;
• Enable and encourage informed investor-decision making on the allocation of financial capital; and
• Add value to an organisation's existing mainstream report, while minimising the reporting burden and simplifying the reporting process.

The Framework also:

• Supports compliance with regulatory reporting requirements with current & emerging requirements for sustainability reporting, (e.g. the EU Non-Financial Reporting Directive);
• Forms part of the evidence base as the ISSB develops its IFRS Sustainability Disclosure Standards. The CDSB Framework and technical guidance on Climate, Water, Biodiversity and Social disclosures will remain useful for companies until such time as the ISSB issues its IFRS Sustainability Disclosure Standards on such topics;
• Aligns and complements the objectives of financial reporting by providing environmental and social information that is connected with financial information;
• Aligns with the recommendations of the Task Force on Climate-related Financial Disclosures;
• Builds on the most widely used reporting approaches, such as CDP, GRI, SASB, IFRS;
• Encourages standardisation of environmental and social information reporting;
• Supports the rigour that is appropriate for information provided to investors; and
• Helps prepare assurable reports.

The development of the CDSB Framework has been overseen by the CDSB Technical Working Group, consisting of representatives from the largest accounting firms, reporting organisations, companies and academia.

Why we need a framework

Voluntary and mandatory reporting schemes on sustainability have multiplied, but there is no single standard about how companies should identify relevant information on natural, social and human capital and how users of such information can interpret it. As such, the information available is inconsistent and financial institutions are not taking account of environmental and social factors in their decision-making.

"As investors we find it instrumental to be able to evaluate and compare companies on their sustainability performance. The lack of a standard that creates alignment in the reporting of environmental & natural capital information makes it hard to do so. We hope that others will get behind the CDSB Framework for reporting environmental information & natural capital so that it can evolve to become the standard the investor community needs." – Marcos Mancini, Director of Sustainability, Banorte