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You might feel like you need clarification on the overwhelming number of regulations, proposals, and frameworks for measuring, reporting, and mitigating your environmental impacts. These can range from directives like the European Green Deal to international frameworks addressing carbon accounting and eco-labeling.
Understanding these standards is essential for businesses that meet compliance requirements and promote sustainable practices globally.
Let's dive into them and uncover the wide range of frameworks, regulations, and initiatives that impact decision-making and environmental awareness across all sectors.
Here, we provide a list of the regulations and frameworks.
Let's learn about the most pressing regulations and, as a next step, examine the frameworks that can be used as the background methodology.
As the last piece, we introduced some initiatives that can be beneficial for working with your peers collectively.
International Regulations
Regulations in place
CSRD | Corporate Sustainability Reporting Directive
EU law, replacing NFRD by establishing more concrete reporting guidelines
It includes SMEs and non-EU companies if they generate over EUR 150 million on the EU market.
Companies will have to transparently disclose the impacts they may cause on climate in a detailed way
Implies the mandatory measurement of GHG emissions (Scope 1-3) and the provision of a full environmental footprint of the company, including various impact categories.
Reports must be according to European Sustainability Reporting Standards (ESRS)
Regulations disbanded
TCFD | Task Force on Climate-related Financial Disclosures
Disbanded in 2023
Enhance and improve the disclosure of financial information related to climate change
Guidelines crafted to aid companies in comprehending and addressing the financial risks and opportunities linked with climate change while providing investors with necessary information for informed investment choices
International Frameworks and standards
Product assessment framework
ISO 14040/14044
International Standard
It provides a framework for conducting life cycle assessments (LCA) to evaluate the environmental impacts of products and services.
It requires a clear definition of the goal and scope of the LCA study, including the functional unit, system boundaries, and impact categories to be assessed.
Involves compiling an inventory of inputs (e.g., materials, energy) and outputs (e.g., emissions, waste) associated with each product's life cycle stage.
It evaluates the potential environmental impacts of the inventory data, considering factors such as resource depletion, global warming potential, and human health effects.
It is applicable to various sectors and industries, enabling organizations to assess and improve the environmental performance of their products and processes.
It involves interpreting the LCA study's results and considering uncertainties, limitations, and sensitivity analyses to ensure robust decision-making.
ISO 14067
International Standard
Provides specifies principles, requirements, and guidelines for quantifying the product's carbon footprint throughout its life cycle
Provides guidance on effectively communicating carbon footprint information to stakeholders, such as consumers, investors, and policymakers.
Applicable to various types of products, helping organizations assess and manage their environmental impacts more effectively.
Greenhouse Gases Protocol (Product Life Cycle Accounting and Reporting Standard)
International standard
Provides guidelines for quantifying and reporting greenhouse gas emissions associated with the life cycle of products
It covers emissions from all stages of a product's life cycle (raw material extraction, production, distribution, use, and end-of-life disposal or recycling) and separates them into different Scopes (1-3)
It is based on LCA principles, requiring the use of consistent methodologies and data sources for conducting emissions assessments across different product categories
PAS 2050
International Standard
Developed by the British Standards Institution in 2008
Provides guidelines for measuring and reporting the carbon footprint of a product
Covers the entire life cycle of a product
Provides guidance on allocation methodologies for attributing emissions to different products or co-products within a system where necessary
EPD | Environmental Product Declaration
Operates in accordance with the ISO 14025, TS/14027, 14040, and other standards
Reports comparable, objective and third-party verified data that shows the environmental performance of a company’s products and services
EPD needs to be verified by an approved independent verifier before being registered and published at the International EPD System
Supports organizations to understand, improve and communicate the environmental impact of their products and services
ISO 59040 - Product Circularity Data Sheet
ISO 59040 provides a comprehensive methodology for implementing, operating, monitoring, reviewing, and maintaining a Product Circularity Data Sheet (PCDS) when acquiring or supplying products. It is designed for any organization aiming to adopt circular economy-based practices in their supplier or acquirer relationships.
General methodology: Offers a general methodology for implementing and maintaining a PCDS, ensuring consistent practices across organizations and sectors.
Improved communication: Provides standardized information that can be easily shared by manufacturers across every sector, improving the efficiency of circularity data sharing. This facilitates a mutual understanding of the PCDS approach and associated needs and expectations by offering guidance and requirements for exchanging product information that supports the circular economy.
Established framework: for reporting and exchanging information about the circular economy aspects of products when supplying or acquiring them. This framework helps encourage improved product circularity performance.
3 tier system based on picking list:
Minimum Set of Circular Statements: Essential statements required to establish a solid base.
Additional Optional Statements: Statements that can be made required based on specific needs.
Free Form Addition: Allows for supplemental information linked to a statement or additional information.
(more information)
Organisational assessment framework
Greenhouse Gases Protocol (Organisational level - Scope 1,2,3)
International framework
It is a widely used accounting tool developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).
It provides a framework for businesses and governments to measure, manage, and report greenhouse gas emissions.
The GHG Protocol categorizes greenhouse gas emissions into three scopes:
Scope 1: Direct emissions from sources owned or controlled by the reporting entity, such as emissions from the combustion of fossil fuels in owned vehicles or facilities.
Scope 2: Indirect emissions associated with generating purchased electricity, heat, or steam consumed by the reporting entity.
Scope 3: Indirect emissions that result from the reporting entity's activities but originate from sources not owned or controlled by the entity. This includes emissions from business travel, employee commuting, upstream and downstream supply chain activities, and waste disposal.
ISO 14025
International Standard
Specifies the principles and procedures for developing Environmental Product Declarations (EPDs), which are Type III environmental declarations.
EPDs provide standardized and transparent information on products' environmental performance, facilitating comparisons between products in the market.
EPDs are developed based on Product Category Rules (PCR), which define the specific requirements and methodologies for conducting LCAs and preparing EPDs within a particular product category.
Aims to harmonize EPD development and reporting globally, promoting consistency and facilitating international trade by ensuring EPDs are developed according to standardized procedures.
EPDs may be required by legislation or voluntary initiatives, and they can also help companies meet market demands for transparency and sustainability.
PACT | Pathfinder Framework
PACT takes a holistic approach to sustainability assessment, considering economic, environmental, and social impacts across the entire life cycle of products and services
Encourages stakeholder engagement throughout the assessment process, allowing for the incorporation of diverse perspectives and priorities into sustainability decision-making
ISSB | International Sustainability Standards Board
Aims to develop a consistent, international sustainability reporting standard for companies
Emphasizes efficiency in standard development to facilitate global reporting to investors
The ISSB has set out four key objectives:
to develop standards for a global baseline of sustainability disclosures;
to meet the information needs of investors;
to enable companies to provide comprehensive sustainability information to global capital markets and
to facilitate interoperability with jurisdiction-specific disclosures and/or aimed at broader stakeholder groups.
GRI | Global Reporting Initiative
International Framework
Detailed guidelines on how to report and communicate ESG topics in a sustainability report
Provide a sustainability reporting standard
It is widely recognized as being credible and reliable
Declaration, reporting, and reduction frameworks
SBTI | Science-Based Target Initiative
Aims to drive ambitious corporate climate action by providing a framework for setting science-based targets (SBTs) aligned with the goals of the Paris Agreement
Collaboration between CDP (formerly the Carbon Disclosure Project), the United Nations Global Compact, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF), supported by a broader group of stakeholders
SBTi provides criteria and guidelines for companies to set SBTs that are in line with the latest climate science, ensuring that emissions reduction targets are sufficiently ambitious and contribute to global climate goals
Promotes transparency and accountability in corporate climate action by publicly disclosing validated targets and progress reports, enabling stakeholders to track companies' emissions reduction efforts over time
SASB | Sustainability Accounting Standards Board
A non-profit organization committed to establishing and enforcing industry-specific standards aimed at assisting companies in disclosing financially relevant sustainability information to investors and other financial stakeholders.
Serve as an ESG framework and identify sustainability issues
CDP | Carbon Disclosure Project
International non-profit organization that aims to drive companies and governments to disclose their environmental impacts
CDP collects environmental data from thousands of companies worldwide through annual disclosure requests, encouraging transparency and accountability in environmental reporting
Guides companies on how to measure, report, and manage their environmental impacts
Evaluate companies and cities by assessing the information they provide during the annual reporting process, scoring them according to their progress in disclosure and their strides toward environmental leadership
UN Guidelines for Providing Product Sustainability Information
Helps companies to provide accurate and credible sustainability information about their products
Developed by the United Nations Environment Programme (UNEP) and the International Trade Centre (ITC) in collaboration with stakeholders from governments, industry, academia, and civil society
Aim to empower consumers to make informed purchasing decisions by providing clear, understandable, and easily accessible product sustainability information, enabling them to choose products aligned with their values and preferences
UN Global Compact
Corporate sustainability initiative that calls companies to adopt sustainable and socially responsible policies regarding ESGs
24219 participants in 167 countries
Companies can join the compact and thereby commit to integrating principles into their corporate strategies. It provides support and guidance and is not legally binding, just voluntary
ISO 59004
ISO 59004 is the first standard to provide an international definition of the circular economy and identifies six complementary and interconnected principles: systems thinking, value creation, value sharing, resource management, resource tracking, and ecosystem resilience.
International definition: Establishes a global definition of the circular economy, creating a unified understanding and framework.
Six Principles:
Systems Thinking: Understanding the interdependencies within the circular economy.
Value Creation: Generating sustainable value through circular practices.
Value Sharing: Equitably distributing value among all stakeholders.
Resource Management: Efficient use and reuse of resources.
Resource Tracking: Monitoring resource flow to ensure circularity.
Ecosystem Resilience: Enhancing the ability to withstand environmental, social, and economic shocks.
Guidance for implementation:
Provides practical guidance for implementing circular economy principles and defines key terminology to ensure clarity and consistency.
Offers actionable steps towards achieving sustainability goals, making the transition to a circular economy more manageable.
Benefits of Adopting ISO 59004:
Sustainable Solutions: Enables the delivery of more sustainable and ambitious solutions.
Stakeholder Relationships: Improves relationships with stakeholders by promoting transparency and collaboration.
Fulfillment of Obligations: Facilitates the effective and efficient fulfillment of voluntary and legal obligations.
Climate Change Mitigation: Contributes to efforts in mitigating and adapting to climate change.
Resilience: Increases resilience against resource scarcity and other environmental, social, and economic risks.
Initiatives
Product Circularity Data Sheet
The Product Circularity Data Sheet (PCDS) is an initiative launched by Luxembourg’s Ministry of Economy in collaboration with 50 companies. It aims to standardize data on the circular aspects of products, raising awareness and providing reliable information about a product's circular life. It helps businesses to build circular business models + reduce virgin material consumption by providing data on product level circularity info, e.g. recycled content, repairability, harmful chemicals, etc.
aims to facilitate circular business models by supplying manufacturers with standardized format for communication between suppliers and manufacturers, machine readable, open code and auditable
Establishes a standard data source for all stakeholders to assess the circularity of a product, enhancing the transparency and reliability of circular economy data.
Sets up an audit system based on the data produced, ensuring the credibility of the information through a three-fold system:
Data Template: Contains standardized and trustworthy statements on product circularity.
Third-Party Verification: Validates the content of the PCDS through an independent verification process.
Standardized Data Exchange Protocol: Uses decentralized data storage to facilitate secure and efficient data exchange.
Benefit: Open Data and open source: The PCDS serves as an official standard for communicating data on the circular economy properties of products, described as follows:
Ensures accessibility of PCDS data to all relevant stakeholders, including platforms, suppliers, customers, and third-party verifiers.
Facilitates efficient data exchange throughout the supply chain.
Maintains the integrity of the data through a decentralized solution.
Regional zoom in:
Every country and region has advanced in pursuit of sustainability by setting key milestones tailored to their unique priorities.
Here is a list of the regulations and framework specified to each region.
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