Among the many calls to address climate risk in Larry Fink's recent Letter to CEOs was the advocation of aligning company reporting with standards laid out by the Sustainability Accounting Standards Board. Additionally, Fink championed the framework provided by the Task Force on Climate-related Financial Disclosures, noting firms should disclose climate-related risk in line with these recommendations.

Fink, however, also made an important disclosure of his own. That no framework used to address climate risk (or for that matter, any risk relating to ESG factors) is perfect.

Establishing a far-reaching framework to assess ESG compliance is being held up as something of a holy grail across banking, financial services and other industries. For some, agreeing on a set of rules that can be broadly adopted is a necessary step towards ensuring the financial sector uses its influence to promote sustainability.

The EU agreed on ?green? criteria for finance in December, allowing more capital to be allocated to initiatives addressing climate change. Not resting on its laurels, the bloc has since tapped a London-based think tank to produce recommendations for best practices when producing ESG ratings and research.

The creation of standards, however, isn't to the taste of everyone. It's been argued that simply creating sustainable hoops to jump through, rather than forcing corporates to abide by sustainable principles, gives companies the easy task of applying a 'tick-box? mentality to ESG compliance.

The Financial Reporting Council recently made such a statement, adding that many large firms are failing to improve their culture, merely paying lip-service to its corporate governance code. It's also been noted companies can use newly-established sustainability goals to ?greenwash? their activities.

There is also the issue of ESG goals being pursued at the cost of economic feasibility or fiscal responsibility. More than one prominent voice from the world of European banking has recently derided the idea of lowering capital requirements for environmentally-positive projects.

Despite this, there is clearly a desire to establish a framework for assessing ESG metrics. Whether asset managers holding portfolio companies to account or banks being more discerning on who they lend to, the financial sector is facing increased pressure to push the world towards a more sustainable future. Fulfilling this role while grappling with incomplete data and fragmented criteria is undoubtedly a thankless task.

The reality is we are unlikely to come to a definitive set of ESG criteria in the near future. Nor, for that matter, should we be aiming to.

Far more important than establishing a universal framework is encouraging all firms to adopt sustainable principles as part of their corporate policy.

Financial services can help with the application of these principles by setting concrete goals for organisations on a case-by-case basis, a far more effective way of pursuing ESG goals than presenting companies with a superficial checklist.

That is not to say frameworks have no use. The UN's Principles for Responsible Banking, for example, provides an excellent starting point for lenders to assess their own environmental and social responsibility, allowing standards to naturally filter down to their client base. UK Finance, the collective voice for the banking and finance industry in the UK, is providing its members with practical solutions to help them adopt those principles.

Encouragingly, we have already seen evidence of the benefits of this approach. Man Group, for example, recently aligned a credit facility with meeting specific non-financial goals, including the appointment of women to senior roles and promoting charitable volunteering among staff.

This example also shows deploying ESG principles can be used to reward organisations for compliance, rather than simply punishing those who fail to embrace such values.

Similar approaches, aimed at persuading corporates to adopt principles and dynamically monitor these as the world changes, will aid the financial sector in promoting sustainability and social responsibility.

UK Finance and Curation will next week be launching a member-only fortnightly newsletter called The Responsible Banker, which focuses on sustainability, climate risk and green finance.

Members will be able to register to receive the latest ESG news, analysis and commentary across the areas of banking, compliance, regulation, accounting and much more besides.