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the UN Global Compact and the World Business Council for Sustainable Development (WBCSD),

enables guidelines for alignment of SDGs with business strategy, which aims to help firms commit
to, prioritize and contribute to SDGs (mainly for large multinational firms, but small and medium
sized enterprises can adjust it and use it as well) (GRI, United Nations Global Compact &
WBCSD, 2015).

When preparing a non-financial report, firms are offered the option of choosing between several
non-financial reporting frameworks, and they are obliged to indicate on the basis of which
frameworks the non-financial report was compiled. The international frameworks according to
which it is possible to prepare and publish a non-financial report are (Ravlić Ivanović et al., 2022,
p. 38):

• EU Guidelines on non-financial reporting;

• Global Reporting Initiative (GRI);

• United Nations Global Compact (UNGC);

• The UN Guiding Principles on Business and Human Rights;

• The Organization for Economic Co-operation and Development (OECD) Guidelines for
multinational enterprises;

• (ISO) 26000 Guidance on Social Responsibility of the International Organization for
Standardization;

• Tripartite Declaration on Principles Concerning Multinational Enterprises and Social
Policy of the International Labor Organization.

Investor and CEO’s alike have difficulties comparing and benchmarking firms ESG activities and
achievements, as various firms use different standards, and there are no universally agreed

international standards for sustainability reporting. However, certain firms such as Vigeo, EIRIS,
MSCI and SustainAlytics make such analysis and comparisons for their clients (Business and
Sustainable Development Commission, 2017, p. 70).
European Union in the last decade had enacted several significant acts that improve disclosure

and reporting comparison of firms sustainable activities, where one of the regulation acts was the
EU Directive 2014/95/EU of the European Parliament and of the Council on non-financial
reporting (NFRD) (Markota Vukić, Vuković, Calace, 2017: 14 in Ravlić Ivanović et al., 2022, p. 6).
In order to meet global climate and sustainability goals, another two significant regulatory acts

were adopted by the European Parliament and the Council are the Sustainable Finance
Disclosure Regulation- SFDR Regulation (Regulation (EU) 2019/2088 of the European
Parliament and the Council of November 27, 2019) dealing with sustainability and reporting
practices in the financial services, and Regulation (EU) 2020/852 of the European Parliament and
of the Council of June 18, 2020 providing guidelines regarding sustainable investment (Ravlić
Ivanović et al., 2022, p. 22).
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