The brand-new publication from the LFE Technical Advisory Group is all about ESG, with a great comparison table among standards
Over the last year, the term ESG has been searched on Google with an interest generally above 80 on a scale from 0-100, where a value of 100 is the peak popularity for a term. Interestingly, the term has dramatically linearly increased its appeal in the last five years, starting from a level of popularity around 20/100. If we run the same research for the word ‘sustainability’ the interest also increased, but with a much less steep curve. Comparing the two terms, we can say that on average, globally, ESG reached the same level of popularity of ‘sustainability’ but in half of the time.
But what is ESG? The term appeared at first in 2004 in a report entitled ‘Who Cares Wins. The Global Compact Connecting Financial Markets to a Changing World’ published under the guidance of the UN Global Compact, and where twenty major financial companies pledged to begin integrating social, environmental and governance (ESG) issues into investment analysis and decision making. So, we are celebrating twenty years since its first appearance.
In Europe, the term has become more popular last year after the European Union established the new rules on corporate sustainability reporting by publishing the Directive (EU) 2022/2464, better known as the Corporate Sustainability Reporting Directive (CSRD). With this new directive, the aim is to modernise and strengthen the rules concerning the social and environmental information that companies have to report. A broader set of large companies now, as well as listed SMEs, will be required to report on sustainability. And this will also include non-EU companies, if they generate over EUR 150 million on the EU market.
The intent of this new publication from the Technical Advisory Group (TAG) at Living Future Europe is twofold. On one hand, to provide a better clarity in the global conversation around the environmental, social and governance (ESG) factors, which are typically used by investors to evaluate their choices. On the other hand, the TAG aimed to define a crosswalk between these criteria and the Living Building Challenge (LBC) – developed by the International Living Future Institute – which is considered the most ambitious sustainability framework for the built environment.
The report addresses five main ESG related frameworks, among the many that the TAG has selected as more representative, after a screening of the available international standards, i.e.
- the Sustainable Finance Disclosures Regulation (SFDR) developed by the European Union,
- the Global Real Estate Sustainability Benchmark (GRESB) an ESG platform for the real estate sector,
- the Corporate Sustainability Reporting Directive (CSRD), also published by the EU,
- the Global Reporting Initiative (GRI) standard, a globally accepted ESG framework,
- the Sustainable Development Goals, a comprehensive set of 17 goals promoted by the United Nations, that serve as the blueprint for a better future
The aim was to compare them, identifying possible overlapping criteria, so as to understand which were the fundamental topics and indicators to consider when dealing with the ESG. Additionally, a comparison has been made with the topics and indicators (they are called ‘Petals’ and ‘Imperatives’) included in the LBC, with the goal to understand if – starting from the built environment – such holistic and ambitious framework could be a sort of umbrella standard embracing the most important environmental, social and governance criteria.
The result of this analysis can be found in the comparison table (Appendix), which put together all the criteria included in the aforementioned frameworks, highlighting overlaps, redundancies, connections.
Download for free our newest publication at the following link
Scaling up the ESG to the regenerative level through the Living Building Challenge
If you are aware of any improvements, omissions or errors in the table please do let us know. Further if you would like to discuss awareness, training or advisory support on ESG and the LBC please contact us at info@living-future.eu
[Cover image: Kendeda Building for Innovative Sustainable Design, Atlanta, GA, USA – LBC 3.1 Living Certified]
