Standard-setters and frameworks issue vision for more comprehensive corporate reporting
This article highlights a call from leading standard-setting bodies for more comprehensive corporate reporting.
Transparent measurement and disclosure of sustainability performance is now considered to be a fundamental part of effective business management, and essential for preserving trust in business as a force for good. Yet, the complexity surrounding sustainability disclosure has made it difficult to develop the comprehensive solution for corporate reporting that is urgently needed.
In response to this, five framework, and standard-setting institutions of international significance, 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), 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.
These five organisations guide the overwhelming majority of quantitative and qualitative sustainability disclosures today and provide the integrated reporting framework that connects sustainability disclosure to reporting on financial and other capitals.
This commitment comes at a pivotal moment for progress towards a globally coherent solution for sustainability disclosure standards. Climate change, the global pandemic, and the increasingly clear connection between sustainability performance and financial risk and return are driving the urgency.
The paper addresses the complexity surrounding sustainability disclosure and outlines a shared vision of standard-setting that enables companies to collect information about performance on a given sustainability topic once, but provide relevant information to different users through appropriate communication channels. It also describes the role of taxonomies and technology to enable sustainability-related data to be structured for sharing and comparison, as well as the importance of a publicly available data platform to democratise access to this information as a public good.
The issue of this statement of intent coincides with a statement from the International Federation of Accountants (IFAC) on The Way Forward to enhanced corporate reporting. The IFAC position proposes that in order to advance towards a reporting system that delivers consistent, comparable, reliable, and assurable information relevant to enterprise value creation and sustainable development, a new Sustainability Standards Board alongside the International Accounting Standards Board (IASB) is needed.
ICAS is supportive of these collaborative efforts as a means of achieving a comprehensive solution that enhances corporate reporting and contributes towards our sustainable development ambitions.