TCFD, ISSB, GRI – Global Sustainability Reporting Standards Explained

What do a central bank task force, a global accounting board, and a 1990s NGO have in common? They all created the ESG reporting frameworks that companies (and regulators) now live and breathe. And yes, if you’re a private investor reading CSRD reports — these are the ingredients behind the numbers.

Key Takeaways

TCFD, ISSB, and GRI are the global blueprints for sustainability and ESG reporting.
Each brings a different lens: climate risk (TCFD), financial impact (ISSB), and broader social/environmental effects (GRI).
The EU’s CSRD integrates all three through the ESRS. It’s what’s behind the ESG data you’re now seeing in annual reports.
For private investors, knowing how to read and compare CSRD reports means knowing what each framework brings to the table.

How it fits with the rest of the EU sustainability web

We are now in Article 6 of our CSRD & Sustainability Regulations series. If you missed the previous articles, check them out here:

The Global Standards (TCFD, ISSB, GRI) fits into the broader sustainability framework of EU regulations, as illustrated below:

EU Green Deal
│
├──→ EU Taxonomy
│
├──→ SFDR
│
├──→ NFRD → CSRD
│ ├──→ ESRS
│ ├──→ Global Standards (TCFD, ISSB, GRI) (📍 You are here) │
├──→ CSDDD
│
└──→ Digital Tools & ESG Software

Why three frameworks — and why now?

There was a time when ESG disclosures were the Wild West — inconsistent, unverified, and wildly subjective. Companies wrote what they wanted, in the format they liked, and cherry-picked the topics that painted them in the best light. That wasn’t going to cut it in a world facing climate breakdown, rising inequality, and mounting pressure on financial systems.

So: enter three major players — each born from a different context, aiming to solve a different part of the ESG reporting mess.

TCFD, backed by the Financial Stability Board, was born out of concern that climate change posed systemic risks to the global financial system.
GRI, starting in the late 1990s, emerged from civil society’s push for companies to disclose their broader impact on the environment and human rights.
ISSB, the newest entrant, was created to unify the many ESG frameworks into one clear, investor-relevant global baseline.

In 2024 and beyond, these three frameworks no longer operate in isolation. Through the EU’s CSRD and ESRS, they’ve been partially harmonized into a single reporting system. For investors — especially those who don’t work in institutional finance — this means company ESG reports are finally becoming readable, comparable, and decision-useful.

Meet the frameworks

Launched in 2015, the TCFD was a milestone in connecting climate change with financial decision-making. Instead of just asking whether a company recycles its coffee cups, the TCFD asks: how exposed is this business to rising temperatures, carbon pricing, sea level rise, or a green policy shift?

Its framework is built on four pillars:

Governance: Who in the company is actually responsible for climate strategy? Is it on the board’s agenda?
Strategy: How does the company plan to handle both physical risks (like floods) and transition risks (like a carbon tax)?
Risk Management: What processes are in place to identify and mitigate climate-related threats?
Metrics and Targets: Is the company tracking its emissions and progress toward any goals?

Crucially, TCFD introduced the idea of scenario analysis — essentially asking companies to model how their business might fare under different warming pathways (e.g., 1.5°C vs. 4°C). This isn’t just helpful for regulators; it’s essential for any investor trying to assess long-term risk exposure. If a company says it’s “net-zero by 2050,” TCFD forces it to show how.

In CSRD reports, whenever you see detailed emissions disclosures, strategy comparisons under climate scenarios, or governance structures tied to ESG risks — TCFD is the skeleton behind that body of data.

2. ISSB – International Sustainability Standards Board

If TCFD opened the climate-finance door, ISSB stepped in to build the whole house. Created by the IFRS Foundation (the body behind international accounting standards), the ISSB was launched in 2021 to bring coherence to a fragmented reporting landscape.

Its first two standards — IFRS S1 and IFRS S2 — lay the foundation for sustainability reporting that’s explicitly tied to enterprise value. In other words, ISSB cares about what affects investors’ financial decisions, not just whether a company is socially responsible in the abstract.

IFRS S1 establishes the overall framework for reporting sustainability-related risks and opportunities.
IFRS S2, building directly on TCFD, focuses specifically on climate-related disclosures.

While it doesn’t cover every ethical or environmental issue out there, ISSB is laser-focused on financial materiality. This means investors — including private ones — can use ISSB-style data to understand whether a company’s ESG risks are likely to affect its future cash flows, market position, or overall valuation.

Through CSRD’s ESRS, many of these financial risk considerations are embedded in the required disclosures. If you’re trying to assess how seriously a company takes its ESG-related liabilities, debt exposure, or business model transformation, ISSB thinking is baked into the answers.

3. GRI – Global Reporting Initiative

The GRI is the oldest and broadest of the three. Founded in the late ‘90s by environmental and human rights advocates, it was created to push companies to disclose their social and environmental impacts — not just because they’re risky, but because they matter.

Where ISSB is concerned with what’s material to investors, GRI is focused on what’s material to society. It introduced the concept of impact materiality — asking not what the world is doing to the company, but what the company is doing to the world.

Its standards cover:

Greenhouse gas emissions, water use, and waste
Human rights practices and labor conditions
Diversity, inclusion, and anti-corruption
Supply chain due diligence and stakeholder engagement

For readers of CSRD reports, GRI-derived content is where you’ll find the rich detail about a company’s sustainability policies, its treatment of workers, and its broader effect on communities and ecosystems. Investors who are motivated by ethical alignment or social impact — not just financial returns — often use GRI indicators to choose which companies or funds to support.

So… how do they fit together?

This is where the EU’s CSRD gets interesting. Instead of picking one framework over another, the European Commission decided to incorporate them all.

The European Sustainability Reporting Standards (ESRS) — the new mandatory format under CSRD — combine financial and impact materiality in a concept called double materiality. That’s TCFD + ISSB + GRI, all working under one roof.

Here’s a simplified map of how they align:

Framework	Focus	Materiality	Common Use
TCFD	Climate risk	Financial	Risk and scenario analysis
ISSB	Financial ESG risks	Financial	Valuation and performance
GRI	ESG impacts	Impact	Ethics, stakeholder impact

For investors reading CSRD reports, this means you’re getting both sides of the coin: how ESG issues might affect company value, and how companies themselves are contributing to those issues. It’s no longer a choice between “green” or “profitable.” You get the full picture — strategy, risk, and ethics, all in one place.

The investor angle: why this matters

You don’t need to be a CFA or a compliance officer to read CSRD disclosures effectively. In fact, the new format is designed to make ESG information accessible — not just to regulators and analysts, but to individual investors who want to make informed decisions about their money.

Understanding the foundations — TCFD, ISSB, and GRI — helps you read those disclosures more critically. It helps you know what to look for, what questions to ask, and what’s missing when a company makes bold ESG claims.

Want to understand how a company is adapting to a decarbonizing economy? That’s TCFD. Trying to see whether ESG risks might derail growth or erode margins? That’s ISSB. Curious if the company is walking the talk on human rights or biodiversity? That’s GRI.

CSRD ties them together. You don’t have to master all three frameworks — but knowing the logic behind them makes you a sharper, savvier reader of ESG reports.

Next up in the series:
CSRD - Understanding the EU’s Updated Sustainability Reporting Requirements

This article was created with the assistance of AI and carefully reviewed, edited, and refined to ensure accuracy and clarity.