What are the differences between CDP and SASB reporting?

There is no doubt that ESG reporting such as CDP and SASB are gaining lots of ground in the corporate world and is going to be a consistent relevance in many businesses’ operational models. This is also further promoted by many investors’ commitment to pitching their support and dealing with businesses with significant regard in incorporating environmental, social, and governance factors to foster sustainability.

In recognition of the importance of ESG, a lot of frameworks have been conceived to guide companies as to how to best report their progress on environmental and social development through various policies and strategies. The reporting on ESG is hinged on providing credibility and transparency and accountability to relevant stakeholders. This article focuses on two major reporting frameworks while highlighting the difference between them.

Types of ESG Reports framework

There are roughly about 12 major reporting frameworks for ESG; each of these frameworks has different metrics and performance indicators and also are distinct in their methodology and scoring system. The diverse reporting framework is in line with the need to cover the variety of companies that now take part in the ESG reporting and also fulfilled the requirements of a different form of reporting to reveal distinct information needed by various stakeholders

CDP reporting framework

The carbon disclosure project is likely the most popular reporting framework which is centered on revealing the climate impact by companies using yardsticks such as water usage, carbon emissions, and deforestation. Founded in the year 2000, the CDP allocated scores to companies based on efforts related to environmental safety and protection.  T scores are used to gain competitive advantage as is usually presented to investors to aid in directing their decisions

SASB reporting

The Sustainability Accounting Standards Board is a more recent framework for reporting on ESG and it comprises about 77 standards that companies have to utilize to report vital information on sustainability to potential investors.

The unique style of the SASB is rooted in the incorporation of specificity in the topics and metrics related to sustainability for various Industries including utilities, oil and gas, and others, while this makes it very helpful in narrowing down the discussion topics for businesses and to allow them to decide on the metrics to report.

CDP Vs SASB

The difference between these two reporting systems can be recognized from their thematic focus; while the SASB adopts a more general approach, the CDP is more specific by covering strictly matters about the environment. A lot of companies might find this limiting and as a result, might lean towards the SASB framework which is an all-encompassing alternative covering various specific areas. Another key difference is the focus of the SASB on financial materiality and its affinity to capital providers while the CDP focuses on data collection about climate reporting.

On a final note, these reporting frameworks strengthen the effort in the pursuit of sustainability and the incorporation of ESG in the corporate and business world. Although with key differences in the way they work there is no doubt that they have a common goal.  The choice on which reporting framework to follow can only be based on your organizational needs and the kind of information the organization is required to provide to relevant stakeholders and potential investors.