New ISO ESG Implementation Principles launched at the COP29

Introduction 

At the COP29 event in Baku, Azerbaijan, the International Organization for Standardization (ISO) unveiled a major development in the world of ESG practices: the new ISO ESG Implementation Principles. These principles aim to provide clear and actionable international guidance to streamline Environmental, Social, and Governance (ESG) initiatives, equipping global organizations with the necessary tools to communicate their sustainability efforts effectively.

Guiding Document IWA 48:2024 – Framework for Implementing Environmental, Social, and Governance (ESG) Principles

The guiding document, “IWA 48:2024 – Framework for Implementing Environmental, Social, and Governance (ESG) Principles”, emerged through a collaborative process that involved contributions from national standards bodies such as the British Standards Institution (BSI), the Standards Council of Canada (SCC), and the Brazilian Association of Technical Standards (ABNT). Additionally, more than 1,900 industry experts from 128 countries were involved in the creation, leading to a comprehensive framework for ESG maturity.

The IWA 48:2024 framework presents a high-level structure that helps organizations integrate existing ESG standards, establish measurable Key Performance Indicators (KPIs), and assess the overall maturity of their ESG practices. Importantly, the ISO ESG Implementation Principles aim to complement—not replace—existing standards like the European Sustainability Reporting Standards (ESRS) and the guidelines established by the International Sustainability Standards Board (ISSB).

Addressing Overlap: Complementary, Not Competitive

When we first heard about this new guideline, I wondered whether another ESG reporting standard was truly necessary. Given the multitude of existing ESG reporting standards—including ESRS in Europe, the ISSB framework, and the widely adopted Global Reporting Initiative (GRI)—there is a risk that the new ISO standard may add little value or, worse, contribute to an already saturated landscape of guidelines. Interestingly, the ISO standard itself acknowledges this potential overlap and emphasizes its intended role:

“The aim of this document is to assist as wide a group of interested parties as possible and to help organizations of all types and sizes to start, deepen, or mature their ESG journey in a clear, accessible, and straightforward manner. The ESG framework is intended to be complementary to and interoperable with existing voluntary and regulatory reporting frameworks to facilitate global harmonization and alignment on ESG principles and approaches. The ESG framework (developed by ISO) draws on relevant existing International Standards, without rewriting them, to bring together trusted materials in an overarching structure of principles and cross-cutting themes supported by key performance indicators (KPIs).”

While much of the document shares significant similarities with existing ESG reporting standards, such as ESRS, one aspect that we found particularly interesting and novel is its focus on the ‘stages of ESG maturity”. 

The Four Stages of ESG Maturity

The IWA 48:2024 guideline introduces four distinct stages of ESG maturity that reflect the evolving depth of commitment, integration, and the overall impact that ESG practices have within an organization:

Stage 1: Minimum Standards ESG

At the initial stage, organizations are primarily concerned with meeting only the basic external ESG requirements, often driven by regulatory needs or industry norms. The focus is on compliance, typically through the easiest and most cost-effective means. Investments in sustainability initiatives are minimal, and the organization’s actions are mainly reactive—aimed at avoiding penalties or reputational damage. ESG, at this stage, is considered more of an obligation than an opportunity for value creation.

Stage 2: ESG Compliance

The second stage is marked by a more organized approach to conforming with reporting standards and regulatory requirements. However, compliance is often carried out mechanically—with an emphasis on ticking the required boxes rather than integrating ESG into the company’s core strategy. ESG efforts are more visible compared to Stage 1, but they remain largely superficial, leading to criticism for being over-engineered and costly without providing strategic value.

Stage 3: Developing ESG

In this stage, organizations start recognizing the strategic importance of ESG. Compliance is no longer viewed as a mere regulatory exercise but as a potential brand asset. ESG reporting becomes a means of enhancing reputation and differentiating from competitors. Initiatives begin to align with broader strategic goals, and the organization takes proactive steps to communicate these activities effectively to stakeholders, including customers and investors. Despite this progress, the focus remains largely external, with ESG often seen as a means to bolster brand image rather than fully integrating sustainability into the organization’s DNA.

Stage 4: Values-Led ESG (Mature)

At the final and most advanced stage, organizations demonstrate a deeply ingrained commitment to sustainability principles that goes far beyond regulatory compliance or branding initiatives. ESG becomes embedded in the core values and mission of the organization, shaping every decision from leadership to day-to-day operations. Here, ESG practices are not motivated solely by external pressure or market competitiveness but by a fundamental belief in positive social and environmental impact. Sustainability is no longer just a policy but a guiding philosophy that defines the organization’s identity and purpose.

Conclusion

The unveiling of the ISO ESG Implementation Principles at COP29 represents a step towards greater clarity and harmonization in the increasingly complex ESG landscape. While the new framework may initially appear redundant amid the numerous existing guidelines, its focus on integrating and aligning standards, coupled with a practical roadmap for ESG maturity, can make it a useful tool for organizations at any stage of their sustainability journey. 

The document can be downloaded here.