Plan to create unified sustainability reporting standards
14 Sep 2020
Five global organisations specialising in sustainability and integrated reporting frameworks and standards have declared their intention to work together to create a comprehensive approach to corporate reporting
14 Sep 2020
The five bodies are CDP, the Climate Disclosure Standards Board (CDSB), the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC); and the Sustainability Accounting Standards Board (SASB).
GRI, SASB, CDP and CDSB set the frameworks and standards for sustainability disclosure, including climate-related reporting, along with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. The IIRC provides the integrated reporting framework that connects sustainability disclosure to reporting on financial and other capitals.
The organisations say that while transparent measurement and disclosure of sustainability performance is now considered to be a fundamental part of effective business management, the complexity surrounding sustainability disclosure has made it difficult to develop a comprehensive solution for corporate reporting.
They have now have co-published a shared vision of the elements necessary for more comprehensive corporate reporting and a joint statement of intent to drive towards this goal – by working together and by each committing to engage with key actors, including IOSCO and the IFRS, the European Commission, and the World Economic Forum’s International Business Council.
Charles Tilley, CEO of the IIRC, said: ‘This year we have witnessed businesses around the world having to pivot their business models overnight, to prioritize the health and safety of their employees and customers above the immediate financial success of the business.
‘The connectivity between sustainability-related factors and immediate financial-viability is clearer than ever before.
‘It is why we are committed to working with our partners to drive a holistic system for reporting across the value chain.
‘We know that businesses globally are already using a mixture of our frameworks and standards to provide stakeholders with robust, effective information to drive better decision-making and capital allocation via their integrated report. This document provides further clarity on how to do this effectively.’
The statement of intent was welcomed by ACCA’s head of corporate reporting, Richard Martin, who said it will facilitate the development of a more coherent and comprehensive reporting system.
‘The collection and categorisation of corporate information, underpinned by technology, will ensure more consistent and verifiable data; holistically connecting sustainability to finance.
‘This has the potential to support policy makers and standard setters globally, including Europe’s work in developing the Non-Financial Reporting Directive and Standards.
‘We look forward to supporting the organisation and other stakeholders in the next phase of engagement on these commitments,’ Martin said.
Separately the International Federation of Accountants (IFAC) said it was calling for the creation of a new sustainability standards board that would exist alongside the IASB under the IFRS Foundation. The proposed board would address the growing demand from investors, policy makers and regulators for a reporting system that delivers consistent, comparable, reliable, and assurable information relevant to enterprise value creation, sustainable development and evolving stakeholder expectations.
Kevin Dancey, CEO of IFAC, said: ‘The time for a global solution is now. Given the momentum that has developed this year—because of work by Accountancy Europe, WEF/IBC, the European Commission, the IOSCO Task Force and the five leading reporting initiatives—we have a unique opportunity to act in concert to do the right thing in the public interest.
‘IFAC believes the IFRS Foundation, with the backing of public authorities, is optimally positioned to lead and coordinate this initiative, and they would do so with our full support.
‘We recommend that the proposed board adopt a “building blocks” approach, working with and leveraging the expertise and disclosure requirements of the CDP, CDSB, GRI, IIRC and SASB.’