What ESG Standards Mean for Companies

Several years ago, sustainability within many companies was associated primarily with Corporate Social Responsibility initiatives, such as:

• Supporting a social activity
• Making a donation
• Organizing a tree-planting campaign
• Publishing an annual report describing the company’s contribution to society

Today, the concept of sustainability has expanded significantly.

Investors, banks, customers, and boards may now ask:

• What risks does climate change create for the company?
• How much energy and water does the organization consume?
• Does the organization measure its emissions?
• How does it manage occupational health and safety?
• Does it have policies addressing bribery and conflicts of interest?
• How does the Board oversee sustainability risks?
• Can published data be verified?
• Can the company connect these issues with its performance, risks, and strategy?

This area is commonly described as:

ESG — Environmental, Social, and Governance

In other words:

• Environment
• Society
• Governance

ESG is not a single model that every organization applies in the same way. Nor is there one universal “ESG certificate” demonstrating that a company has become sustainable.

The organization must identify:

Its material issues, the appropriate regulatory or reference framework, and the data, governance arrangements, and initiatives it requires.

What Does the Environmental Dimension Mean?

The environmental dimension addresses the relationship between the organization’s activities and the environment, climate, and natural resources.

Depending on the sector, it may include:

• Energy consumption
• Greenhouse gas emissions
• Water consumption
• Waste
• Raw materials
• Pollution
• Resource efficiency
• Climate-related risks
• Other environmental impacts associated with the organization’s activities

A cement manufacturer will not have the same environmental priorities as a software company.

ESG should therefore not be developed by copying one fixed list of indicators for every organization.

The selection must begin with:

The nature of the organization’s activities, impacts, risks, and interested-party requirements.

What Does the Social Dimension Mean?

The social dimension addresses the organization’s impacts on and relationships with people.

Depending on the organization, it may include:

• Occupational health and safety
• Working conditions
• Competence and training
• Workforce practices
• Human rights, where relevant
• Workers in the supply chain
• Communities affected by the organization’s activities
• Product and service safety
• Customer experience

An issue does not automatically become a “material ESG topic” merely because it appears on an international list.

The relevant question is:

Which issues are genuinely connected to the company’s impacts, risks, stakeholders, and applicable disclosure requirements?

What Does the Governance Dimension Mean?

Governance is the dimension that makes ESG manageable instead of leaving it as a collection of disconnected initiatives.

It may include:

• The role of the Board
• Authorities and responsibilities
• Risk management
• Compliance
• Integrity and anti-bribery arrangements
• Conflicts of interest
• Internal control
• Reporting mechanisms
• Policies
• Data governance
• Integration of sustainability into management decisions

IAC’s governing content framework requires sustainability to be connected with governance, measurement, indicators, initiatives, and follow-up so that the approach remains institutional and advisory rather than merely promotional.

Is ESG the Same as Corporate Social Responsibility?

No.

Corporate Social Responsibility may form an important part of institutional sustainability, but CSR alone does not cover the entire ESG system.

A company may spend substantial amounts on community programmes while simultaneously experiencing:

• High resource consumption
• Weak occupational safety risk management
• Absence of a conflict-of-interest policy
• Weak supply-chain management
• Lack of reliable environmental performance data

Organizations should therefore move from:

Separate social initiatives

to:

A sustainability system connected to strategy, governance, risk, and performance

IAC’s consulting catalogue reflects this distinction by positioning Corporate Social Responsibility within a broader framework that includes:

• Stakeholder analysis
• Material issues
• Impact indicators
• Implementation governance
• Disclosure

Why Has ESG Become Important to Jordanian Companies?

There is no single reason. Several developments are driving its importance.

1. Jordan’s Capital Market Is Moving Toward More Developed Sustainability Disclosures

Companies included in the ASE20 Index already have sustainability-reporting requirements.

The Amman Stock Exchange explained that amended Listing Directives required companies included in the ASE20 sample for the first quarter of 2022 to issue sustainability reports beginning with the 2022 financial year, following GRI principles and other relevant international standards.

For a significant group of listed Jordanian companies, sustainability is therefore no longer an entirely voluntary matter.

2. Climate Disclosure Is Entering a More Structured Phase

The Amman Stock Exchange’s current regulatory framework allows listed companies to use the ISSB Standards.

Companies included in the ASE20 are the first group targeted by climate-related requirements based on IFRS S2 and the related climate provisions of IFRS S1.

According to the IFRS Foundation’s official Jordan jurisdictional profile, updated on 18 June 2026:

• The reporting phase for reports published during 2026 was voluntary.
• The mandatory phase applies to reports published from 1 January 2027, subject to the defined application rules.

This is particularly important for listed Jordanian companies.

Preparing for climate disclosure requires governance, data, controls, and measurement processes to be established before the reporting date—not one month before publication.

3. The Jordan Securities Commission Is Expanding Its Work on ESG

During 2026, the Jordan Securities Commission announced work on an ESG Code of Practice.

In July 2026, the Commission explained that implementation would begin with ASE20-listed companies through a phased approach.

Jordan’s regulatory direction is therefore moving from general sustainability awareness toward more structured governance and disclosure within the capital market.

This does not mean that every privately held Jordanian company is currently subject to the same requirements as an ASE20 company.

Is ESG Mandatory for Every Jordanian Company?

Not as a general statement.

Requirements differ according to:

• Whether the company is listed or unlisted
• Whether it forms part of the ASE20
• Its sector
• The requirements of any sector regulator
• Requirements imposed by banks or investors
• Whether it forms part of an international supply chain
• The contracts and markets in which it operates

A consulting company should not state:

“Every Jordanian company is required to publish an ESG report.”

That statement is inaccurate.

The correct approach is:

Identify independently the regulatory, contractual, financing, and market requirements applicable to each organization.

4. Jordan’s Financial Sector Is Moving Toward Green Finance

The Central Bank of Jordan launched its Green Finance Strategy 2023–2028.

It also publishes the Jordan National Green Taxonomy as part of its financial-stability and green-finance framework.

This development is relevant even to non-financial companies.

As green finance expands, organizations seeking funding for projects involving energy, efficiency, or resource use may need more accurate information about:

• The nature of the project
• Its environmental impact
• Supporting data
• Relevant risks
• Alignment of the activity with classifications and standards used by financial institutions

The existence of a National Green Taxonomy does not automatically mean that every project described as green will receive financing.

It demonstrates a clear institutional direction toward identifying and distinguishing green economic activities more systematically.

5. Investors and Financiers Require Data, Not Slogans

One of the most important ESG developments is the move from:

“We are a sustainable company.”

to:

“These are our risks, data, objectives, and results.”

This shift contributed to the development of the IFRS Sustainability Disclosure Standards.

What Is IFRS S1?

IFRS S1 focuses on the disclosure of sustainability-related risks and opportunities that could reasonably be expected to affect an organization’s:

• Cash flows
• Access to finance
• Cost of capital

over the short, medium, or long term.

It requires disclosure across four principal areas:

• Governance
• Strategy
• Risk management
• Metrics and targets

This brings ESG directly into financial and strategic discussions rather than leaving it as a separate responsibility of the Public Relations Department.

What Is IFRS S2?

IFRS S2 focuses specifically on climate-related risks and opportunities and is designed to be applied together with IFRS S1.

For the company, the question is no longer:

Do we have an environmental initiative?

It becomes:

Could climate change affect our business model, assets, supply chain, or access to finance—and how are we managing that effect?

What About GRI?

GRI has a different primary focus.

The Global Reporting Initiative Standards help organizations identify and report their most significant impacts on:

• The economy
• The environment
• People, including their human rights

The conceptual distinction is important.

In simplified terms:

ISSB focuses primarily on how sustainability-related risks and opportunities may affect the organization’s prospects and the decisions of investors and financiers.

Whereas:

GRI focuses on the organization’s most significant impacts on the economy, environment, and people.

Some organizations may use more than one framework.

The decision should be justified by:

• Applicable disclosure requirements
• Intended users
• Stakeholder needs
• Regulatory expectations

It should not be made merely to produce a longer report.

Must Every Jordanian Company Use GRI?

No.

GRI may be used by organizations of different types, but it is not a general requirement for every Jordanian company.

ASE20 companies have had an Amman Stock Exchange sustainability-reporting pathway based on GRI since the requirements introduced for the 2022 financial year. This now exists alongside developing climate-disclosure requirements based on ISSB Standards.

A privately held and unlisted company may have very different needs.

It may require:

• An internal ESG management framework
• A GRI-based report
• Disclosures requested by an investor
• Climate information required by a financing institution
• Specific data requested by an international customer

The organization should determine why it needs to report before selecting the reporting framework.

This is consistent with IAC’s corporate profile, which includes ESG reporting services while emphasizing that the applicable reference framework—such as GRI or another framework—must be identified for the actual reporting and implementation context.

ESG Is Not a Report That Begins at the End of the Year

If an organization begins thinking about its sustainability report in December, immediate questions arise:

• Where will the data come from?
• Are the energy meters reliable?
• Are water-consumption records complete?
• Who owns occupational injury data?
• How is employee turnover calculated?
• Where is supplier information maintained?
• Who reviews and approves the data?
• Is each indicator calculated consistently from one year to the next?

The organization should establish ESG Data Governance before preparing the report.

For every indicator, ask:

• What is its definition?
• What is the calculation method?
• Which unit of measurement is used?
• What is the organizational boundary?
• What is the data source?
• Who collects the data?
• Who reviews it?
• Who approves it?
• What evidence supports it?

This transition from communications content to data and controls is what makes ESG manageable and reportable.

Step One: Assess ESG Maturity

Do not begin by writing an ESG strategy.

Begin by diagnosing the current state.

Review:

• The existing corporate strategy
• Governance arrangements
• Risk management
• Policies
• Available indicators
• Data
• Current initiatives
• Previous reports
• Regulatory requirements
• Customer, investor, and financing requirements

The resulting gaps can then be classified and prioritized.

This is aligned with IAC’s official service scope, which begins with assessing institutional sustainability maturity and identifying gaps and priorities.

Step Two: Identify Stakeholders

Who is affected by the organization’s activities?

Who can influence its ability to operate?

Stakeholders may include:

• Customers
• Employees
• Suppliers
• Investors
• Financiers
• Regulators
• Local communities
• The Board of Directors

The purpose is not to create the longest possible list.

It is to understand:

Which issues matter to each stakeholder, and why?

IAC’s sustainability and responsibility pathways include a stakeholder map among their typical deliverables.

Step Three: Identify Material Issues

This is one of the most important stages of ESG development.

Do not begin with a general list containing:

• Climate
• Water
• Diversity
• Training
• Corruption
• Cybersecurity

and assume that every topic has equal importance.

Priorities must be established.

Under GRI, material topics represent the organization’s most significant impacts on the economy, environment, and people.

Under IFRS S1, the focus is on sustainability-related risks and opportunities that could reasonably be expected to affect the organization’s prospects.

The meaning and application of materiality therefore differ according to the framework.

This is another reason the reporting template should not be selected before defining the purpose and applicable reference framework.

Step Four: Connect ESG with Corporate Strategy

Do not place the ESG strategy in a file separate from the organization’s corporate strategy.

If the corporate strategy includes:

• Regional expansion
• Increased production
• Cost reduction
• Entry into a new market
• Greater dependence on technology

the organization must ask:

• What are the associated sustainability impacts?
• What risks arise?
• Which opportunities exist?
• Which resources are required?
• Which indicators does management need?

IAC’s consulting catalogue expressly includes developing an ESG strategy and connecting it with organizational objectives and measurable indicators.

Step Five: Define Governance Before Launching Initiatives

The organization must establish:

• Who owns ESG?
• Does the Board oversee it?
• Who collects the data?
• Who reviews the data?
• Who approves the objectives?
• Who owns the risks?
• Who monitors initiatives?

A large organization may establish a dedicated sustainability committee or function.

In a smaller organization, responsibilities may be distributed among:

• Strategy
• Risk
• Quality
• Environment
• Human Resources
• Finance

There is no single structure that should be copied by every company.

Accountability must nevertheless remain clear.

Step Six: Establish the Baseline

Do not set a target without understanding current performance.

If the organization wants to reduce energy consumption:

How much energy does it currently consume?

If it wants to reduce waste:

What is the current quantity?

If it wants to improve safety:

What is the current level of performance?

If it wants to increase training:

What is the baseline?

Without a baseline, ESG objectives become aspirations rather than manageable targets.

Step Seven: Select Indicators Linked to Material Issues

Depending on its sector and priorities, the organization may select indicators such as:

Environmental Indicators

• Energy consumption
• Energy intensity
• Water consumption
• Waste
• Emissions, where relevant

Social Indicators

• Occupational health and safety performance
• Employee turnover
• Training and competency development
• Workforce or community indicators related to material issues

Governance Indicators

• Conflict-of-interest cases or disclosures
• Completion of compliance reviews
• Closure of corrective actions
• Integrity and anti-bribery training
• Other governance indicators connected to organizational risks

There is no single ESG Dashboard suitable for every industry.

Each indicator should support a decision.

IAC’s ESG training programme includes establishing sustainability indicators and targets and linking them to management decisions and internal reporting.

Step Eight: Translate Objectives into Initiatives

The objective:

Improve energy efficiency

is not an initiative.

The indicator:

Energy consumption intensity

is not an initiative either.

Relevant initiatives may include:

• Reviewing equipment performance
• Improving operational controls
• Implementing an energy-efficiency project
• Changing technology
• Delivering operational training

Each initiative should have:

• An owner
• A deadline
• A budget, where required
• A related KPI
• An implementation status

The correct relationship is:

ESG Strategy → Objectives → KPIs → Initiatives → Tracking

It is not:

ESG → Report

Step Nine: Integrate ESG with Risk Management

Sustainability is not only a list of opportunities.

Relevant risks may include:

• Rising energy costs
• Resource scarcity
• Supply-chain disruption
• Changing customer requirements
• New disclosure obligations
• Climate-related risks
• Reputational risks
• Governance weaknesses

IAC’s sustainability services therefore include aligning sustainability with:

• Governance
• Enterprise Risk Management
• Performance management

A mature organization does not maintain an isolated ESG Risk Register that no one reviews.

Material ESG risks should be integrated into the organization’s Enterprise Risk Management framework.

Step Ten: Use Existing ISO Management Systems

An organization may already operate systems based on:

• ISO 14001
• ISO 45001
• ISO 50001
• ISO 37001
• ISO/IEC 27001
• ISO 31000

These systems may already provide important elements of the ESG infrastructure, including:

• Environmental data
• Occupational safety risks
• Energy-consumption information
• Integrity and anti-bribery controls
• Information governance
• Risk-management processes

One ISO certificate does not, however, mean that the company has become “ESG compliant.”

Management systems may provide governance, data, processes, and controls within a sustainability programme. They do not replace:

• Materiality assessment
• Applicable disclosure requirements
• The selected reporting framework
• Broader ESG governance

IAC’s consulting catalogue expressly connects ISO 14001 with sustainability and ESG where appropriate to the sector.

Where Does ISO 26000 Fit?

ISO 26000 is different from certifiable management-system standards.

It provides guidance on social responsibility. It is not a requirements standard intended for management-system certification.

IAC’s materials expressly recognize this distinction and use ISO 26000 to support:

• Stakeholder analysis
• Social and governance issues
• CSR and ESG initiatives

Therefore:

ISO 26000 is not an ESG certificate.

Likewise:

ISO 14001 is not an ESG certificate.

No single one of these standards replaces the complete sustainability system.

What About Small and Medium-Sized Jordanian Companies?

Not every company needs to begin with a 150-page report.

An unlisted company can begin more practically by asking:

• What does the market require from us?
• Which risks are material?
• Which data already exists?
• What are our most significant impacts?

It can then establish a limited set of priorities, indicators, and initiatives.

A medium-sized factory, for example, may initially focus on:

• Energy
• Water
• Occupational safety
• Waste
• Suppliers
• Compliance
• Governance

A professional services company may have substantially different priorities.

ESG should reflect the organization’s size, impacts, and risks rather than imitate the report of a global corporation.

What Does ESG Mean for a Jordanian Manufacturer?

In practical terms, it may involve:

• Measuring energy and resource consumption
• Improving environmental performance
• Managing occupational health and safety
• Quantifying emissions where required by the market
• Governing suppliers
• Managing compliance
• Connecting energy-efficiency investments with reliable data

What Does ESG Mean for a Bank or Financial Institution?

Its priorities may be more closely connected to:

• Climate-related risks
• Green finance
• Governance of investment and credit
• Disclosure
• The financed portfolio

This direction is reflected in the Central Bank of Jordan’s Green Finance Strategy and Jordan National Green Taxonomy.

What Does ESG Mean for a Listed Company?

For ASE20 companies in particular, ESG is more advanced than an internal voluntary programme.

They have been subject to sustainability-reporting requirements since the 2022 financial year, and the market is moving toward ISSB-based climate disclosure, with a mandatory phase for reports published from 2027 under the current regulatory framework.

A listed company should therefore treat ESG as a project involving:

Governance + data + internal control + disclosure

It should not be treated merely as a report-writing assignment.

How Should an ASE20 Company Prepare Now?

The year 2026 should not be treated as a period for waiting until 2027.

The company may need to review:

• Reporting scope
• Governance structure
• Climate-related risks and opportunities
• Data sources
• Emissions information where required
• Data controls
• Metrics and targets
• Connections with financial reporting
• The capacity of management and the Board to review the information

IFRS S1 and IFRS S2 place governance, strategy, risk management, and metrics and targets at the centre of sustainability disclosure.

Do Not Begin an ESG Report Before Establishing Data Readiness

A common mistake is to:

1. Select the report design.
2. Write the introduction.
3. Begin searching for data.

The stronger sequence is:

Requirements → material topics → KPIs → Data Owners → controls → performance → report

Without a Data Owner, different departments may produce different values for the same indicator.

Without a formal indicator definition, the calculation method may change every year.

Without supporting evidence, the data may be difficult to verify or review.

How Can the Risk of Greenwashing Be Reduced?

The problem is not the use of green in the report’s visual design.

The problem is making claims that cannot be supported by data.

Examples include:

• “An environmentally friendly company”
• “Fully sustainable operations”
• “Net zero”
• “100% green”

without definitions, organizational boundaries, data, and methodology.

A better principle is:

Do not claim more than you can demonstrate.

If electricity consumption was reduced at a specific factory, disclose that result with the relevant period, scope, and measurement method.

Do not convert a defined result into a broad claim concerning the entire company.

This is consistent with IAC’s protocol, which avoids absolute claims and focuses on measurable impact.

Does ESG Necessarily Mean Additional Cost?

Building systems, improving data, and implementing initiatives require resources.

However, the correct question is not only:

What will ESG cost?

It should also include:

• Which risks are we attempting to manage?
• What does the investor or customer require?
• Are there efficiency opportunities?
• Does an investment require financing?
• Are we already producing data that can be organized and governed?
• Can ESG be integrated into existing processes instead of creating a parallel department?

IAC’s sustainability services therefore connect sustainability with corporate strategy, operations, governance, and performance rather than treating it as a separate programme.

How Should a Jordanian Organization Begin Its ESG Journey?

A disciplined pathway is:

1. Identify regulatory, contractual, financing, and market requirements.
2. Assess ESG maturity and gaps.
3. Identify stakeholders and material issues.
4. Select the appropriate reference and reporting framework.
5. Define governance, ownership, and responsibilities.
6. Establish baselines and data arrangements.
7. Design objectives and KPIs.
8. Develop initiatives and implementation plans.
9. Integrate material ESG risks into Enterprise Risk Management.
10. Establish controls over data and reporting.
11. Disclose according to the applicable framework.
12. Review performance and pursue improvement.

Through this approach, the report becomes an output of the management system rather than allowing the system to become a by-product of the report.

A Simplified ESG Map

ESG DimensionPotential Material IssuePotential KPIPotential Data OwnerEnvironmentalEnergy efficiencyEnergy consumption intensityOperations / FacilitiesSocialOccupational health and safetyApproved safety performance indicatorsHSESocialCapability developmentPercentage of competency gaps closedHuman ResourcesGovernanceConflicts of interestPercentage of required disclosures completedGovernance / ComplianceGovernanceCorrective actionsPercentage closed on timeRelevant Management Function

These are illustrative examples only.

They should not be adopted before the organization determines its material issues, reporting requirements, sector context, and decision-making needs.

To request an initial sustainability and ESG maturity diagnostic session, contact IAC to assess your current position, material issues, governance arrangements, indicators, and market and regulatory requirements and to define a development pathway appropriate to your organization.