Environmental, Social and Governance Compliance Framework Template for England and Wales

An Environmental, Social and Governance Compliance Framework helps organizations track and meet their sustainability, ethical, and management commitments. It sets clear standards for how companies handle everything from carbon emissions and waste management to workplace diversity and board independence - all crucial areas under UK corporate governance rules.

For British businesses, these frameworks align with key regulations like the Companies Act 2006 and FCA listing rules. They provide a structured way to monitor ESG performance, manage risks, and report progress to stakeholders. Many UK firms use them to demonstrate compliance with mandatory carbon reporting requirements and modern slavery laws while building trust with investors and customers.

Implement an Environmental, Social and Governance Compliance Framework when your organization faces increasing scrutiny from investors, regulators, or stakeholders about sustainability practices. This becomes especially crucial when preparing for FCA listing requirements, responding to mandatory climate-related disclosures, or expanding operations where ESG metrics affect funding and partnerships.

The framework proves valuable during mergers and acquisitions, when bidding for public sector contracts, or when entering markets with strict environmental regulations. UK companies typically need one when they exceed certain size thresholds requiring SECR reporting, fall under Modern Slavery Act obligations, or seek to demonstrate leadership in sustainable business practices to maintain competitive advantage.

• Basic ESG Framework: Covers fundamental environmental, social, and governance metrics suitable for small and medium UK enterprises just starting their sustainability journey
• Comprehensive Corporate Framework: Detailed structure meeting FCA listing requirements and institutional investor expectations, with extensive KPIs and reporting mechanisms
• Sector-Specific Framework: Tailored versions for high-impact industries like manufacturing or financial services, addressing unique regulatory requirements and material ESG risks
• Integrated Management Framework: Combines ESG compliance with existing business systems, perfect for organisations seeking operational efficiency
• Supply Chain ESG Framework: Focuses on monitoring and managing ESG risks throughout the supply network, essential for Modern Slavery Act compliance

• Board Directors: Ultimately accountable for ESG strategy and framework approval, ensuring alignment with corporate objectives and risk appetite
• Sustainability Officers: Lead the development and implementation of the ESG framework, coordinating across departments and tracking performance
• Legal Teams: Review and ensure compliance with UK regulations, including Companies Act requirements and FCA listing rules
• Department Heads: Implement framework requirements within their areas, from HR managing social metrics to Operations handling environmental targets
• External Auditors: Verify ESG data and compliance, providing independent assurance to stakeholders and regulators

• Current State Assessment: Audit existing ESG practices, policies, and performance metrics across your organization
• Regulatory Research: Review applicable UK requirements including FCA guidelines, Companies Act provisions, and sector-specific regulations
• Stakeholder Input: Gather feedback from department heads on practical implementation challenges and opportunities
• Data Systems Check: Evaluate your ability to collect, monitor and report required ESG metrics
• Resource Planning: Identify staff, budget, and tools needed for framework implementation
• Draft Development: Use our platform to generate a legally-sound framework, ensuring all mandatory elements are included

• Scope Statement: Clear definition of environmental, social, and governance areas covered under UK regulations
• Performance Metrics: Specific, measurable KPIs aligned with FCA requirements and industry standards
• Governance Structure: Detailed roles, responsibilities, and reporting lines for ESG oversight
• Risk Management: Procedures for identifying, assessing, and mitigating ESG-related risks
• Reporting Framework: Templates and schedules for mandatory disclosures and stakeholder communications
• Compliance Mechanisms: Internal controls and monitoring processes ensuring adherence to UK regulations
• Review Process: Regular assessment and update procedures to maintain framework effectiveness

An Environmental, Social and Governance Compliance Framework differs significantly from a Corporate Social Responsibility Policy in several key ways, though both address organizational sustainability and ethics.

• Scope and Purpose: ESG frameworks provide comprehensive, measurable standards across environmental, social, and governance areas, while CSR policies typically focus on voluntary community initiatives and social impact
• Legal Standing: ESG frameworks directly respond to UK regulatory requirements, including FCA listing rules and mandatory reporting, whereas CSR policies are generally voluntary commitments
• Performance Metrics: ESG frameworks include specific, auditable KPIs and compliance mechanisms, while CSR policies often contain broader, aspirational goals
• Stakeholder Focus: ESG frameworks primarily address investors, regulators, and board oversight, while CSR policies target employees, customers, and community stakeholders