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STEM stands for science, technology, engineering, and mathematics, and it’s a popular area of study for its higher-paying occupations and expected job growth. According to the U.S. Bureau of Labor Statistics, careers in STEM earn more than double the national average and are expected to grow more than 10% by 2033.

There are numerous scholarships exclusively available to students pursuing a degree in a STEM field. Below, we’ve outlined a list of STEM scholarships, plus common eligibility requirements and tips for applying.

STEM Scholarships for Graduate Students

Students in a master’s or doctoral program can apply for specific STEM scholarships to help cover tuition and living expenses. Scholarship eligibility may be based on the program type and focus of a student’s research.

Below are five STEM scholarships for graduate students.

•   American Nuclear Society Scholarship Program: Multiple awards ranging from $1,000 to $5,000 for graduate and undergraduate students enrolled in a degree program related to nuclear science or nuclear engineering.

•   American Welding Society Research Fellowships: Funding and support up to $35,000 annually for graduate students who are engaged in cutting-edge research within the field of welding.

•   Charles LeGeyt Fortescue Scholarship: Funding for one year of full-time graduate studies (up to $24,000) in electrical engineering at an accredited engineering school in the U.S.

•   DOE Computational Science Graduate Fellowship: Tuition assistance, stipend, and professional development ($45,000 value) for incoming and first-year PhD students enrolled in engineering, physical, computer, mathematical, or life sciences programs.

•   Dr. Nancy Foster Scholarship Program: Financial support of up to $47,000 for master’s and doctoral students in oceanography, marine biology, engineering, and resource management disciplines conducting research related to the mission of the National Oceanic and Atmospheric Administration.

For a chance to win SoFi’s monthly $2,500 Scholarship Sweepstakes, simply let us know your name, email address, and school.

STEM Scholarships for Undergraduates

There are many STEM scholarships available to undergraduate students. Eligibility requirements may include a student’s major, location, financial need, academic achievement, and class standing.

Below are five STEM scholarships for undergraduate students.

•   Changing the World Scholarship: Offers $1,000 awards per semester for undergraduate students who are pursuing a STEM degree and have a GPA of 3.0 or higher and demonstrated financial need.

•   Cold War Veterans Scholarship: Three $2,500 scholarships for students who are an active member of the Marine’s Memorial or a child or grandchild of an active member to pursue undergraduate studies in a STEM field.

•   Goodyear STEM Career Day Scholarships: Multiple awards ranging from $1,000 to $2,500 for Ohio high school graduates pursuing a bachelor’s degree in engineering or a STEM discipline.

•   Lockheed Martin STEM Scholarship: Multiple scholarships for undergraduate students enrolled in a four-year degree program and majoring in engineering, computer science, mathematics, or physics.

•   SAE/Ford Partnership for Advanced Studies Scholarship: One $5,000 scholarship for an incoming freshman pursuing an engineering or related science degree at an accredited U.S. college or university.

Recommended: Grants, Scholarships, Loans: The Differences

How to Apply for a STEM Scholarship

To apply for a STEM scholarship, you first need to put in the time to research and find STEM scholarships you qualify for. During your search, keep track of submission deadlines and application requirements for any opportunities you plan on applying to, as these can vary between scholarships.

A personal statement or essay is a common requirement for STEM scholarships. While it’s best practice to tailor your writing to address the scholarship’s specific prompts and instructions, creating a generic personal statement that you can modify for each application can save time.

STEM scholarships often require school transcripts and a letter of recommendation or references. Think about which high school teachers, college professors, or employers are best suited to speak to your academic merit and personal character. When applying for a STEM-specific scholarship, using a reference who teaches or works in a STEM field could be advantageous.

Recommended: How to Pay for College

When Should I Apply for STEM Scholarships?

There are STEM scholarships and grants available to help pay for all levels of higher education, from freshman year of undergrad to completing a master’s or doctoral degree.

For high school seniors, it’s okay if you’re not sure what college you should go to yet to begin applying for college scholarships. Some scholarship deadlines are one year in advance, so it’s helpful to be planning well ahead for applications.

Current college and graduate students can continue applying for scholarships every year of their education, and it may be necessary to reapply for an award if it doesn’t renew annually.

What Kind of GPA Do I Need to Apply for a STEM Scholarship?

STEM scholarships have different eligibility criteria, including GPA requirements. However, many merit-based scholarships require a GPA of at least 3.0 to apply, whereas students could qualify for some need-based awards with a GPA below a 3.0.

Recommended: Tips for Getting Straight A’s in College

Are International Students Eligible for STEM Scholarships?

Many STEM scholarships are intended for students who are U.S. residents. But there are still opportunities for international students to consider, including university-specific scholarships and grants.

Recommended: Can International Students Get Student Loans to Study in the U.S.?

Top 5 STEM Scholarships for Women

There are many scholarships specifically for women pursuing a STEM degree and career. STEM scholarships for women are offered by companies, professional associations, and nonprofit organizations.

The top five STEM scholarships for women include:

•   Advancing Women in Science Scholarships: Various awards for undergraduate and graduate students who are pursuing degrees in STEM fields and members of the Association of Women in Science.

•   Elevate Women in Technology Scholarship: One $1,040 STEM scholarship for a woman who intends to enter a career that leverages technology to make the world a better place, with preference for a student involved in a STEM field and entrepreneurial endeavors.

•   SAE Women-in-Automotive Scholarship: Thirteen $5,000 scholarships for women with strong academic achievement and who are enrolled in an engineering degree program to pursue a career in the automotive industry.

•   Scholarships for Future Women Engineers: Multiple awards ranging from $2,500 to $20,000 for women pursuing an associates or bachelor’s degree in STEM, manufacturing, or industrial engineering.

•   STEMinist Scholarship: Financial support of up to $5,000 for women of color from the Chicago metropolitan area pursuing a college degree in engineering or a STEM-related field.

Recommended: 10 Popular Scholarships for Women

Full Eligibility Requirements

When browsing STEM scholarships, it’s important to verify that you meet eligibility requirements before spending time and effort applying. There may be minimum GPA and residency requirements for applicants.

Depending on the type of scholarship, students could be required to demonstrate leadership experience, involvement in community service, and other experiences or skills to qualify.

Completing the FAFSA can be a prerequisite to apply and be considered for both need-based awards and merit scholarships.

Recommended: How to Complete the FAFSA Step by Step

The Takeaway

Earning a degree in a STEM field can put you on the path to a rewarding and high-paying career. There are many scholarships for undergraduate and graduate students interested in a variety of STEM-related disciplines. Students can apply every year of school to increase their chances of getting scholarships and grants for college.

Still, many students require additional financing, such as federal and private student loans, to fund their education.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

What does STEM scholarship stand for?

A STEM scholarship is a type of free financial aid for students studying science, technology, engineering, or mathematics — a collection of subject areas known as STEM.

What is a STEM scholar?

A STEM scholar is someone who studies an academic discipline related to either science, technology, engineering, or math.

How can I apply for STEM scholarships?

To apply for STEM scholarships, students usually need to complete an online application, provide academic transcripts, and sometimes submit essays or letters of recommendation detailing their interest in a STEM field.

Photo credit: iStock/gorodenkoff

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SOISL-Q324-085

If you’re someone who swipes your credit card for pretty much anything and everything, you know just how disruptive a hold placed on your card can be. This could happen at any time — when you fill up your tank at the gas station or when you pay for a hotel room during a weekend getaway. It can feel like the cash flow equivalent of the power getting shut off in your home.

The good news is that credit card holds are only temporary. And chances are, you’ll be able to tap into your credit card in no time. Learn what a credit card hold is, how long a credit card company can hold your payment, and more.

What Is a Credit Card Hold?

A credit card hold is a two-part process in which the merchant and credit card issuer communicate with one another electronically. On one side, a merchant checks with your card issuer ahead of time if you’re good for a specific, preset amount. On the other side, the card issuer locks in that amount on your credit card balance. That way, the merchant ensures it is paid for the purchase.

In turn, due to how credit cards work, you won’t have access to that amount that’s set aside until either the transaction or the issue gets resolved and the hold is released.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

Types of Credit Cards Holds

Here’s a closer look at the two main types of credit card holds: authorization holds and administrative holds.

Credit Card Authorization Hold

A credit card authorization hold is usually the more complex of the two types of holds. They’re also known as “pre-authorizations,” and you can think of them as a security deposit.

A credit card authorization usually happens when you’re using a credit card to make a larger purchase or when the final amount of the transaction is unknown. Merchants in industries such as car rental companies, gas stations, and hotels commonly use these authorization holds. Other industries where a card isn’t present may also make a request.

How Does An Authorization Credit Card Hold Work?

Here’s how it works: When an authorization hold on a credit card is requested, the card issuer makes a portion of your credit card balance unavailable until the transaction is finalized.

For example: Say you book a hotel room, and the grand total is $1,000. The hotel asks the card issuer for a hold. In that case, the issuer will make that $1,000 of your credit limit unavailable. Once the transaction goes through, the authorization hold will be lifted.

Depending on the situation, there might be two authorization holds placed on your credit card. For instance, if you used your credit card to pay for a hotel stay, the first hold would be for accommodations. The second might be for the tab at the mini-bar in your room or for the restaurant bill.

Recommended: What is the Average Credit Card Limit

How Long Does an Authorization Credit Card Hold Last?

An authorization credit card hold can typically last anywhere from one to 30 days. Some holds might be released the same day, while others last for a few days after the transaction is settled. For instance, a hotel hold is usually released a few days after you checkout, while a hold placed by a gas station might be lifted the day you spend money at the pump.

If the transaction doesn’t settle before a hold reaches its expiration, the hold will fall off, and the amount that was held will become available again.

Credit Card Administrative Hold

The other main type of credit card holds are administrative holds. Administrative holds can be broken down into two types:

•   Over-the-credit-limit administrative hold: As the name implies, if you go over your credit card limit, an administrative hold will be placed. And yes, you’ll be barred from using your card until you pay down your card so it falls below the credit limit. This is why it’s important to follow the credit card rule of spending within your limit.

•   Late-payment administrative hold: If you’re behind on your credit card payment, your credit card issuer may place a late-payment administrative hold on your card. In this case, one of two things can happen. If you have a solid credit history, the card issuer might only report the late payment to the credit bureaus, and allow you to continue using your card. But if you keep making late payments or your credit is less-than-stellar, a late-payment hold might be placed until you make several months of on-time credit card payments.

Recommended: When Are Credit Card Payments Due?

When to Use an Authorization Hold

As a cardholder, an authorization hold isn’t really something you have control over. That’s because the merchant is the party that reaches out to the credit card issuer and requests a hold. This is done as a form of security to ensure the merchant gets paid for a purchase.

That being said, there are things you can do to prevent an authorization hold from happening in the first place. (More on that in a moment.)

When Not to Use an Authorization Hold

It’s up to the merchant whether or not to use an authorization hold. This might be requested if there’s a big question mark hovering over the final amount of the transaction.

Such holds are also requested when it’s worthwhile for a merchant to request a hold, given what a credit card is and how they work. This could include if the purchase is for a larger amount, or if the merchant works in an industry where there’s a high rate of non-payment for purchases.

Tips to Avoid Credit Card Holds

You can avoid credit card holds by doing the following:

•   Use a card in-store. To avoid authorization holds, go inside the store and pay at the counter instead of paying online or at the pump.

•   Check the policy beforehand. If you’re concerned about a hold being placed on your account, reach out to the hotel or car rental company ahead of time. See what their authorization hold policy is and what the typical amount and length of the hold is.

•   Check your credit card balance. If you plan on booking a hotel room or car rental, do a quick check of your credit card balance and your card limit. If you’ve already used a lot of your current balance and might go past your limit, consider using another card, or looking for less-expensive options so you can stay within your limit.

•   Pay your card balance. To keep your credit card limits low, aim to pay off your credit card balance. To stay out of late-payment territory and avoid late-payment holds, always make the credit card minimum payment.

Steps for Removing an Authorization Hold

While the merchant can release an authorization hold at any time, as the card holder you’ll need to jump through a few additional hoops to do so. Here’s what you need to do to lift an authorization hold:

•   Request that the hold get lifted right away. As some holds linger a few days after the bill is paid, ask the merchant if the hold can get released as soon as the bill is paid and the transaction settled.

•   Ask the credit card issuer if the hold can be removed. You can also reach out directly to the card issuer to see if a hold can be lifted. In this case, the issuer would contact the merchant and make the ask on your behalf.

The Takeaway

A credit card hold can be a nuisance, but you can also avoid one by taking a few steps. This includes checking your available balance before making a charge and always making sure to make the minimum payments. And if a hold is lingering for longer than you’d like, you can always request that the hold is removed.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

How do I remove a credit card hold?

You can remove a credit card hold by reaching out directly to the credit card company or to the merchant.

How long does a pending authorization hold take?

It depends. If it’s an authorization hold from a gas station, the hold can get lifted the same day. If it’s a hold from a hotel or car rental, where the amount you’ll be putting on the card is unknown, it can often take several days after you’ve settled the final bill for the hold to be lifted.

What can go wrong with an authorization hold?

There’s a chance that a hold can remain on your card after it’s been canceled or settled. In that case, the funds you have available through your line of credit will be limited. If this happens, you should reach out to the credit card issuer to have the hold released.

Can authorization holds prevent chargebacks?

A benefit of authorization holds is that they can prevent chargebacks for the merchant. (A chargeback is when the consumer disputes a charge and requests a refund, in which case the credit card company would withhold the funds from the merchant until the dispute is resolved.) Placing a hold would allow the merchant to avoid this scenario because they can delay processing the transaction.

Photo credit: iStock/Alesmunt

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOCC-Q324-002

Abbreviations on bank statements typically help identify different types of transactions and share information about your balance. While much of the information on your bank statement is straightforward, occasionally your bank statement may contain abbreviations that you don’t understand.

There are a few common bank statement abbreviations that are good to know, since understanding all of the information on your bank statement may help you to make better financial decisions. The good news is that most of the most common bank statement abbreviations are fairly easy to understand. Once you know what each one stands for, it can help you get a better picture of the overall health of your bank account.

Understanding Common Bank Statement Abbreviations

If you have a checking or savings account, your bank almost certainly sends you a bank statement on a regular basis. This usually happens monthly, and you may receive your bank statement electronically or via a printed statement in the mail. Whether you keep your bank statements or not, it can be wise to review them carefully. Doing so can help you spot any errors or fraudulent charges and scan for bank fees.

As you review your bank statements, you may encounter abbreviations. Some of these may be familiar, but others may require clarification.

Why Banks Use an Abbreviation

There are a few reasons why banks might use an abbreviation for some items:

•  Technological requirement: Many banks rely on underlying financial systems that code certain types of information with abbreviations. These systems require shortened information for proper processing.

•  Saving space: Banks may need to display a lot of information in a relatively small space, and abbreviations can help with this.

•  Security and privacy: Sometimes, using an abbreviation can help conceal sensitive information that banks don’t want to state explicitly on a bank statement.

•  Standardization: Abbreviations can allow banks to use the commonly recognized terms for certain products and services in their records and communications. This uniformity can make organization and recognition easier for all parties involved in banking.

For these reasons, you may see shorter forms of banking terms as you conduct your personal finance business.

Recommended: Savings Calculator

List of Common Abbreviations in Bank Statements

Here are a few of the most common abbreviations you might find in bank statements relating to your checking account or other holdings:

ACH

An ACH payment is one that is processed through the Automated Clearing House. ACH transactions are usually transactions where money is sent to or received from another bank account via electronic networks.

ATM

ATM stands for automated teller machine, and it might signify a withdrawal of cash from or a deposit to your account at one of these devices.

CHK

CHK signifies a check transaction. When you write a check, you may see this abbreviation on your bank statement when the check is deposited and/or clears. Occasionally, this may be abbreviated as CHQ for financial institutions that prefer the spelling of “cheque” to “check.”

CR

CR — or sometimes CRE or CRED — is an abbreviation for a credit, which is usually an amount of money that is credited to your account at a traditional or online bank. This could reflect a direct deposit from a salary, a merchant refund, or any other form of account credit.

DR

DR indicates a debit to your account, such as when money is withdrawn, either from an electronic transfer, a debit card transaction, or a bill payment.

EFT

Similar to ACH transactions, EFT transactions are electronic fund transfers that usually come from another bank account.

However, take note not to confuse it with an ETF, which stands for exchange-traded fund, a type of pooled investment.

FEE

FEE is not actually an abbreviation at all, as this bank statement code just means a fee assessed to your account. This could be any number of bank fees, including maintenance fees, account fees, or non-sufficient funds fees.

INT

This bank statement abbreviation stands for interest that is credited to your account. Many checking or savings accounts pay interest to the account holder based on the total amount on deposit. When that interest is paid, it could be referenced on the bank statement with this abbreviation.

OD

OD typically stands for overdraft and means that your balance has dipped into negative territory. You might also see your balance expressed with a minus sign when you have overdrawn your account. In most cases, this means your account is accruing overdraft fees, so it’s wise to get your account back to positive as soon as you can.

POS

POS stands for point of sale, and usually represents a purchase made with a debit card or credit card at a physical retailer. Confused by the phrase “point of sale terminal”? Think of it as the common term “cash register” in daily conversation.

TFR

TFR stands for transfer. When money moves between your bank accounts, you may see these three letters indicating that money has been transferred.

TLR

TLR indicates that a transaction was conducted with a bank teller at a branch. Those who have accounts at traditional vs. online banks are more likely to see this code.

Importance of Knowing Bank Statement Abbreviations

While some bank statement abbreviations may seem obvious and others obscure, it can be important to understand these terms. They help you keep tabs on the money in your bank account and your financial progress.

It can be a good idea to regularly review your bank statements as they are received. That way, you can check for unexpected or possibly fraudulent transactions. Ideally, you should be able to recognize the transactions on your statement as ones that you initiated and/or authorized. If you see a transaction on your statement that you don’t recognize, you should contact your bank’s customer service department; you may be referred to their fraud protection team if necessary. This may help protect against having your account compromised by bank fraud and from risking identity theft.

Recommended: How to Write a Check

The Takeaway

Financial institutions regularly send bank account statements to their customers, usually on a monthly basis. These statements typically communicate a large amount of information, and they may include abbreviations that shorten and standardize details. By understanding these abbreviations (such as ACH, ETF, and OD), you can enjoy deeper knowledge of your account information and keep tabs on your money.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

How can you identify an unknown retailer abbreviation on your statement?

While many transactions on your bank statement include the name or other identifying information of the merchant in question, some transactions may not be identifiable. One way to identify an unknown retailer is by doing an Internet search for the information that appears on your statement. Another may be to look for the same transaction on past statements of yours. Or contact your bank’s customer service department to see if they can help you with more information about the merchant.

What is included in a bank statement entry?

A bank statement usually includes a list of transactions made during the statement period. Each of these transactions is sometimes called a bank statement entry. A bank statement entry can contain the date of the transaction, the type of transaction, the amount involved, and a brief description of the retailer, merchant, or other party to the transaction, among other details.

Can your bank help decode bank statement transaction abbreviations?

Many bank statement abbreviations are straightforward, but there are some that may not be easy to decipher. If you’re unable to understand what a bank statement abbreviation means by reviewing your statement or doing an Internet search, you may want to talk to your bank’s customer service department. They can likely help you decode the information on your statement.

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SOBNK-Q324-031

As ESG-focused strategies continue to attract investors, there is a growing interest in establishing frameworks that can help companies meet specific environmental, social, and governance criteria — the better to help investors evaluate company performance in light of ESG standards.

ESG frameworks are important because they can allow market participants to reference a common set of guidelines when evaluating companies for investment purposes. In theory, consistent ESG frameworks could help encourage more efficient and transparent markets.

Although there are a number of ESG frameworks in use, however, the ESG sector as a whole still lacks a set of clear-cut criteria that have found universal approval or acceptance. Most recently, the Securities and Exchange Commission (SEC) put its own new set of ESG disclosure rules on hold.

What Is an ESG Framework?

ESG frameworks include principles, guidelines, and often metrics to help firms measure and, importantly, report their progress regarding specific environmental, social, and governance standards — which in turn helps investors interested in green investing.

•   Environmental factors may include carbon emissions, sustainable energy use, pollution regulation, climate impact, and more.

•   Social factors may include a company’s involvement and support of local community issues, worker safety, as well as diversity, equity and inclusion in the workforce.

•   Governance factors may include a company’s leadership selection process, accounting practices, data privacy, and transparency in reporting.

As such, ESG frameworks are an attempt to standardize both methodologies and metrics employed in ESG disclosures to better serve all stakeholders.

The State of ESG Frameworks

Although there are numerous organizations (including policy groups and regulatory agencies) that have developed frameworks for ESG reporting in recent years, there has yet to be a single set of standards to insure that companies are held accountable for managing certain risk factors, and that investors are afforded some reliability in terms of their ESG investment choices.

While the SEC approved a set of ESG disclosure rules in March 2024, a month later, owing to legal challenges, these rules were put on hold.

In short: With no official ESG standards required by U.S. financial regulators or other governmental bodies, the question of which framework to adopt is left up to the individual firm.

Likewise, the lack of agreed-upon ESG frameworks means that investors must shoulder the responsibility for understanding which standards and/or metrics a company may be following, and whether this meets their own standards for investment.

Recommended: Sustainable Investing Guide for Beginners

What Is the Goal of an ESG Framework?

ESG frameworks give companies a way to define key principles, standards, and goals in each area (i.e., pertaining to the environment, societal factors, and corporate governance) in order to facilitate accurate ESG reporting. These frameworks may include metrics to measure progress toward specific goals.

Thus, ESG frameworks serve three main purposes:

1.    To provide guidelines for companies in terms of their operations and outcomes.

2.    To enable consistent reporting that enables investors to evaluate companies.

3.    To help governments track regulatory compliance, and identify areas for improvement or disciplinary action.

ESG Frameworks and Risk

In addition to helping support positive ESG outcomes, companies that adhere to an ESG framework may also be able to mitigate certain ESG risk factors that can impact company performance long term.

For example: Reducing the demand for fossil fuels as part of product manufacturing can be beneficial for the environment, and it also may help protect a company from price shocks from oil or gas shortages — which can help its bottom line.

Recommended: What Is Socially Responsible Investing?

Benefits of Using an ESG Framework

To the extent that an ESG reporting framework can act as a blueprint for progress in specific areas, it may be more likely that organizations that embrace a certain framework are able to drive more positive outcomes in desired areas.

In that light, an ESG framework can enable companies to expand the scope of their business reporting to a wider universe of stakeholders.

•   From an environmental perspective, using ESG to guide corporate actions can mitigate the chance of government oversight; and it may reduce a firm’s overreliance on natural resources, and help to limit insurance and legal costs if environmental safety guidelines are followed.

•   From a social perspective, ESG-influenced policies can improve working conditions, employee retention, reduce the likelihood of labor disputes that can impact productivity, build community support, and improve a firm’s image.

•   When it comes to governance, ESG policies can improve transparency at all levels of a firm; protect data privacy; reduce fraud; and potentially reduce operational costs through the better alignment of all stakeholders within a firm.

Large financial institutions, such as public pension funds, have started incorporating ESG criteria into their investment selections. In addition, there are now ESG-focused ETFs and mutual funds being offered by mutual fund companies, online investing platforms, and brokerage firms.

Types and Examples of ESG Frameworks

In the last 20 years or so, over a dozen ESG frameworks have been established. And while some methods may overlap with each other, and in the last few years some have been consolidated, the existing frameworks each provide a separate set of standards, metrics, and reporting requirements that organizations can consider.

Despite the confusing number of options, some frameworks or disclosure systems seem to be taking the lead in terms of wider adoption, particularly with the expansion of the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards.

While some firms have adopted all or parts of these frameworks, others have created proprietary sets of criteria, metrics, and reporting methods that, in some cases, may complement existing frameworks.

Following is a brief summary of some prominent ESG frameworks:

Global Reporting Initiative (GRI)

The Global Reporting Initiative, established in 1999, is an independent organization that helps companies and governments assess and report their impact on ESG issues such as climate change, human rights, and corruption. Although the GRI standards are voluntary, nearly 80% of the world’s biggest companies by revenue have adopted the GRI reporting standards, making it the most widely adopted framework.

International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards

The IFRS establishes corporate accounting standards and policies overseas; it’s the equivalent of the U.S. Generally Accepted Accounting Principles (US GAAP). Because a growing number of companies need a way to incorporate sustainability into their accounting and reporting disclosures, the IFRS Foundation set up the International Sustainability Standards Board (ISSB) in 2021.

The ISSB disclosure standards are voluntary, and build on previous frameworks, a few of which have since been folded into the working IFRS Sustainability Disclosure Standards, including: the Task Force on Climate-Related Financial Disclosures (TCFD), Climate Disclosure Standards Board (CDSB) and others.

Sustainability Accounting Standards Board (SASB) Standards

The SASB Standards were established in 2018 to enable the disclosure of sustainability-related information that would be considered financially material; the framework detailed key ESG issues across 77 different industries. These standards were absorbed by the IFRS Foundation in 2022, and as such are now overseen by the ISSB, which maintains the SASB Standards for organizations that prefer this method.

CDP

The CDP (formerly the Carbon Disclosure Project) is an international non-profit that helps not only companies, but state and local governments to evaluate and disclose key environmental impacts such as carbon and greenhouse gas emissions, water quality protection, and deforestation on a voluntary basis.

Companies are given a score on separate areas; the questionnaires have been modified to align with the IFRS climate disclosure requirements (above), and continue to evolve. According to CDP, over 23,000 companies around the world rely on the CDP disclosure framework.

United Nations Global Compact

The U.N. Global Compact is considered one of the world’s largest corporate sustainability initiatives; it is “principle based” in that this U.N. pact is non-binding and offers 10 voluntary principles that organizations can use to establish or enhance policies based on human rights, labor practices, the environment, and anti-corruption measures. These 10 Principles are aligned with the 17 Sustainable Development Goals (SDGs), which continue to serve as global guidelines and voluntary frameworks for greater corporate accountability.

The Takeaway

For investors who are exploring ways to invest sustainably, or invest in companies committed to ESG goals, it can be helpful to understand the landscape of ESG standards and reporting frameworks. While there are a number of existing ESG frameworks, a handful have been more widely adopted, which can be useful for ESG-focused investors to know.

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