ESG Frameworks
The 8 frameworks every UAE sustainability professional needs to know — what they are, who uses them, what's changed, and exactly what to say in interviews.
The big picture
ESG reporting is a layered system. Different audiences read different frameworks. The four to memorise cold:
🌍 Impact-focused (stakeholder)
GRI Standards — what your company does to people and the environment. Multi-stakeholder audience: communities, regulators, civil society, investors.
💰 Investor-focused (financial)
ISSB / IFRS S1 & S2 — sustainability matters that affect enterprise value. Single audience: capital markets. SASB metrics now sit inside.
⚖️ Mandatory regulation (EU)
CSRD / ESRS — EU directive requiring both impact and financial materiality (double materiality). Affects UAE companies via EU subsidiaries.
🌐 Voluntary disclosure (public)
CDP — climate, water, forests questionnaires graded A→F. Investor-led; supply-chain procurement increasingly demands a CDP score.
The Task Force on Climate-related Financial Disclosures was disbanded in October 2023. Its 4 pillars + 11 recommended disclosures are now fully embedded inside IFRS S2. If asked "do you report against TCFD?", say "TCFD-aligned via IFRS S2" — anyone who says TCFD is still active is years out of date.
Materiality — the single most-tested concept
If an interviewer wants to filter you out fast, they'll ask "what's the difference between GRI, ISSB and CSRD materiality?". Memorise this:
| Framework | Materiality type | Direction | Audience |
|---|---|---|---|
| GRI 2021 | Impact materiality | Inside-out (your impact on world) | Multi-stakeholder |
| ISSB IFRS S1/S2 | Financial materiality | Outside-in (world's impact on you) | Investors / capital markets |
| CSRD / ESRS | Double materiality | BOTH directions | Both — and EU regulators |
| SASB (legacy) | Financial (industry-specific) | Outside-in | Investors |
"GRI 2021 uses impact materiality — the company's impact on people, environment and economy. ISSB uses financial materiality — sustainability matters that affect enterprise value. CSRD's ESRS uniquely requires both, which is why it's called double materiality. A topic is material under CSRD if it meets either threshold — not cumulative."
GRI Standards
What it is: The world's most widely used sustainability reporting standard. ~10,000+ organisations including ~78% of the world's largest 250 companies. Multi-stakeholder focus. Free to download. Sector-agnostic.
Architecture (revised 2021, in force from 1 Jan 2023)
3 Universal Standards:
- GRI 1: Foundation 2021 — reporting principles (accuracy, balance, clarity, comparability, completeness, sustainability context, timeliness, verifiability).
- GRI 2: General Disclosures 2021 — organisational profile, governance, strategy, ethics, stakeholder engagement (replaced the old GRI 102).
- GRI 3: Material Topics 2021 — process for determining material topics. The 2021 revision shifted to impact materiality — this is the critical change interviewers test for.
Sector Standards (active):
- GRI 11 Oil & Gas (2021)
- GRI 12 Coal (2022)
- GRI 13 Agriculture/Aquaculture/Fishing (2022)
- GRI 14 Mining (2024)
Topic Standards (~30+):
- Environmental: GRI 301 Materials, 302 Energy, 303 Water 2018, 304 Biodiversity 2024, 305 Emissions, 306 Waste 2020, 308 Supplier Environmental Assessment
- Social: GRI 401–418 (employment, labour, OHS, training, diversity, human rights, etc.)
- Economic: GRI 201–207
Recent changes you must know
- GRI 101 Biodiversity 2024 — released January 2024, effective 1 Jan 2026. Aligned with TNFD and Global Biodiversity Framework Targets 2, 3, 5–8, 14.
- GRI 305 Emissions revisions in progress (target 2026).
- GRI 102 Climate Change & GRI 103 Energy (exposure draft 2024) — will replace GRI 305 and 302. Introduces just transition disclosures.
Likely interview questions
"Three big things. One: the move to impact materiality — GRI 3 now defines materiality as the organisation's actual or potential impacts on economy, environment and people, including human rights. That's distinct from financial materiality. Two: restructured into three modular layers — Universal, Sector and Topic standards — so reporters select what's relevant rather than mass-disclosing. Three: Sector Standards launched — Oil & Gas (GRI 11), Coal, Agriculture, Mining now mandatory references for those sectors. Plus mandatory 'in accordance' criteria, replacing the old Core/Comprehensive option."
"Five steps. 1. Understand context — sector, geography, value chain, stakeholders. 2. Identify actual + potential impacts across own operations and value chain (upstream + downstream), positive and negative, with human rights explicitly considered. 3. Assess significance using severity (scale × scope × irremediability) and likelihood for potential impacts. 4. Prioritise using a documented threshold; engage stakeholders to challenge the prioritisation. 5. Report the list of material topics + how each was determined + any thresholds. Document the process so it's auditable."
SASB Standards (now under ISSB)
What it is: 77 industry-specific standards covering financially material sustainability topics for investors. Organised under SICS (Sustainable Industry Classification System) — 11 sectors, 77 industries. Each industry has avg 6 disclosure topics — far more concise than GRI.
Status today: SASB merged into IFRS Foundation/ISSB in August 2022 via the VRF–IFRS merger. ISSB explicitly requires companies applying IFRS S1 to refer to SASB for industry-specific disclosure topics. SASB is now being revised into "Industry-based Guidance" under ISSB.
Disclosure topics include: GHG emissions Scope 1 (gross, by source), methane intensity, water management in regions of high baseline water stress, reserves exposure to price + carbon-cost scenarios. Highly relevant to ADNOC, Total, BP roles in UAE.
TCFD — Disbanded but the structure lives on in IFRS S2
Critical status: The TCFD was disbanded October 2023. Monitoring transferred to IFRS Foundation/ISSB. The 4 pillars + 11 disclosures are now fully embedded inside IFRS S2. UK, Japan, Singapore, Hong Kong, Brazil all reference them in domestic rules.
The 4 Pillars / 11 Recommended Disclosures (memorise)
| Pillar | Recommended disclosures |
|---|---|
| Governance | (a) Board oversight of climate-related risks/opportunities (b) Management's role in assessing/managing them |
| Strategy | (a) Climate risks/opportunities short, medium, long term (b) Impact on businesses, strategy, financial planning (c) Resilience under different climate scenarios incl. 2°C or lower |
| Risk Management | (a) Process for identifying/assessing climate risks (b) Process for managing them (c) Integration into overall enterprise risk management |
| Metrics & Targets | (a) Metrics aligned with strategy (b) Scope 1, 2, and if appropriate Scope 3 emissions (c) Targets and performance against them |
Risk types — memorise
- Physical: Acute (storms, floods, wildfires) + Chronic (sea-level rise, heat stress, drought, water scarcity — extremely relevant to UAE)
- Transition: Policy & legal, technology, market, reputation
ISSB — IFRS S1 & IFRS S2
What it is: The International Sustainability Standards Board (founded COP26, Glasgow, Nov 2021) is the sustainability arm of the IFRS Foundation. Published the first two standards on 26 June 2023, effective for annual periods beginning on or after 1 January 2024.
IFRS S1 — General Requirements
Conceptual foundation: disclose sustainability risks/opportunities that "could reasonably be expected to affect the entity's cash flows, access to finance or cost of capital over the short, medium or long term" — i.e. financial materiality / enterprise value. Requires use of SASB Standards as a reference for industry-specific topics.
IFRS S2 — Climate-related Disclosures
- Fully incorporates TCFD's 4 pillars and 11 recommendations.
- Requires Scope 1, 2 AND Scope 3 disclosure (Scope 3 has 1-year transition relief).
- Cross-industry metrics: GHG emissions, transition risks, physical risks, climate opportunities, capital deployment, internal carbon prices, remuneration.
- Industry-specific metrics derived from SASB.
- Mandates GHG Protocol Corporate Standard for measurement.
Transition reliefs (year 1 only)
- Scope 3 disclosure deferred 1 year
- Climate-only first-year reporting allowed (apply S2 first, S1 later)
- No comparatives required in first year
- Relief from quantitative scenario analysis if not previously done
Jurisdictional adoption (be sharp here)
| Jurisdiction | Status / Date |
|---|---|
| UK SDS | Mandatory FY2026 expected |
| Japan | Prime-listed FY2027, staged thereafter |
| Brazil | Mandatory FY2026 |
| Singapore (SGX) | Climate FY2025, ISSB-aligned FY2026 |
| Hong Kong (HKEX) | Main Board large caps FY2025, full ISSB by FY2028 |
| Australia (AASB S2) | Phased mandatory from FY2025 |
| UAE | Voluntary; ADX/DFM align disclosure guides with ISSB. No mandatory date yet. |
CSRD / ESRS — EU directive (relevant to UAE via EU subs)
What it is: EU directive (2022/2464) replacing the NFRD. Sets out mandatory sustainability reporting using the European Sustainability Reporting Standards (ESRS) developed by EFRAG.
Scope (interviewers love testing this)
CSRD applies to:
- Large EU undertakings meeting 2 of 3 thresholds: >250 employees, >€50m turnover, >€25m balance sheet.
- Listed SMEs (with opt-out until 2028).
- Non-EU parent companies with EU turnover >€150m AND either an EU branch >€40m turnover OR an EU subsidiary that's a large/listed company. Reports under separate ESRS for non-EU groups (ESRS NEG), due FY2028 reporting in 2029.
- Wave 1 (already-NFRD large public-interest >500 employees): FY2024 reports filed 2025. Already done.
- Wave 2 + Wave 3: POSTPONED 2 YEARS by the "stop-the-clock" Directive. Wave 2 now FY2027 reporting in 2028. Listed SMEs FY2028 reporting in 2029.
- Threshold raised in Omnibus proposal: only companies with >1,000 employees would fall in scope (down from 250). Final text expected late 2025/2026.
Don't quote the old timeline. A candidate citing "Wave 2 FY2025" in 2026 looks unread.
Double materiality
ESRS uniquely requires both:
- Impact materiality (inside-out — like GRI): organisation's actual/potential impacts on people and environment.
- Financial materiality (outside-in — like ISSB): how sustainability matters affect financial performance, position, cash flows.
ESRS structure
- 2 cross-cutting: ESRS 1 General Requirements, ESRS 2 General Disclosures
- 5 environment: E1 Climate, E2 Pollution, E3 Water & Marine, E4 Biodiversity, E5 Resource Use & Circular Economy
- 4 social: S1 Own Workforce, S2 Workers in Value Chain, S3 Affected Communities, S4 Consumers/End-users
- 1 governance: G1 Business Conduct
Why UAE companies care
Any UAE company with EU subsidiaries/branches above thresholds is in scope. Major UAE players caught: Emirates NBD, ADNOC, Mubadala, ADQ, Aldar, DP World, Emaar, Majid Al Futtaim all have EU operations. DP World specifically — €150m+ EU turnover via terminals — falls into the non-EU parent regime FY2028.
Assurance: Limited assurance from year 1, moving to reasonable assurance later (Commission decision by 2028).
CDP (Carbon Disclosure Project)
What it is: Global non-profit running the world's largest environmental disclosure system. Investor-led — backed by 740+ financial institutions with $136tn AUM (2024).
Three core questionnaires
- Climate Change (most common — governance, risk, Scope 1/2/3, targets, scenarios; aligned with TCFD/IFRS S2)
- Water Security — water-stressed-region focus; extremely relevant to UAE
- Forests — deforestation-linked commodities: timber, palm oil, soy, cattle, rubber, cocoa, coffee
Plus Plastics (added 2023) and Cities/States/Regions track.
Scoring
A, A-, B, B-, C, C-, D, D-, F. Levels: Disclosure (D) → Awareness (C) → Management (B) → Leadership (A). Roughly 400 companies hit the A List globally per cycle.
2024–2025 changes
CDP launched a single integrated questionnaire in 2024 covering all environmental themes (vs separate ones), aligning with IFRS S2, ESRS E1–E5, and TNFD.
CDP is voluntary disclosure but increasingly ESG-rating agencies (MSCI, S&P, Sustainalytics) and supply-chain procurement (Walmart, Microsoft, L'Oréal) require CDP scores. Roughly 24,800 companies disclosed via CDP in 2024.
UN SDGs
17 Sustainable Development Goals, 169 targets, 231 unique indicators, adopted Sept 2015, runs to 2030. Not a reporting framework per se — companies map their material topics to SDGs.
Key SDGs for UAE sustainability work
- SDG 6 Clean Water (UAE water scarcity)
- SDG 7 Affordable & Clean Energy (Dubai Clean Energy Strategy, Masdar)
- SDG 9 Industry, Innovation, Infrastructure
- SDG 11 Sustainable Cities (Dubai 2040 Urban Master Plan)
- SDG 12 Responsible Consumption & Production
- SDG 13 Climate Action
- SDG 17 Partnerships for the Goals
Don't claim impact on all 17 SDGs — that's a red flag. Focus on 4–6 most material topics with KPIs, not just logos. Interviewers test this.
Gotchas & cheat sheet
Common easy-to-get-wrong points that interviewers probe:
❌ Don't get caught saying:
- "TCFD requires us to..." → it's disbanded
- "CSRD Wave 2 is FY2025" → FY2027 after Omnibus
- "GRI uses double materiality" → no, that's CSRD only
- "All listed UAE companies above [threshold]" → no SCA threshold; all PJSCs
- "CH4 GWP is 25" → 27.9 (AR6)
✅ Say instead:
- "TCFD-aligned via IFRS S2"
- "CSRD Wave 2 FY2027 post-Omnibus April 2025"
- "GRI 2021 = impact materiality only"
- "All listed PJSCs report; no threshold"
- "AR6 100-year GWPs, CH4 fossil 27.9"
Frameworks layered correctly for a UAE-listed company in 2026
- SCA Sustainability Report (mandatory) — referenced against GRI Standards or equivalent
- ISSB IFRS S1 + S2 (voluntary but expected) — investors moving here; S2 is essentially TCFD
- CDP Climate Change (if investor demand or supply-chain pressure)
- SBTi target validation (where sector eligible — not O&G upstream currently)
- ESRS double-materiality (if EU subsidiaries above threshold) — FY2027
- UAE Climate-Responsible Companies Pledge signature + Net Zero 2050 alignment
"GRI is impact materiality for stakeholders. ISSB is financial materiality for investors. CSRD/ESRS is double materiality for EU regulators. SASB sits inside ISSB now. TCFD was disbanded in 2023 and lives inside IFRS S2. CDP is the largest voluntary disclosure platform, aligned with all of the above. UAE follows SCA which is mandatory for all listed PJSCs and accepts GRI or equivalent."