The IFRS (International Financial Reporting Standards) Foundation and Global Reporting Initiative (GRI) have just announced a collaboration agreement under which their respective standard setting boards – the International Sustainability Standards Board (ISSB) and the Global Sustainability Standards Board (GSSB) – will seek to coordinate their work programmes and standard-setting activities.

The IFRS Foundation, which announced at COP26 the establishment of the ISSB to develop a comprehensive global baseline of investor-focused sustainability disclosures for the capital markets, and GRI, the leading global standard-setter for multi-stakeholder focused sustainability reporting, also announced that they will join each other’s consultative bodies related to sustainability reporting activities.

The agreement reflects the importance of ensuring compatibility and interconnectedness of investor-focused baseline sustainability information that meets the needs of the capital markets, with information that serves the needs of a broader range of stakeholders. The IFRS Foundation and GRI recognise the considerable public interest in aligning, where possible, their respective work programmes, terminology and guidance, thus helping to reduce the reporting burden for companies and to further harmonise the sustainability reporting landscape at a global level.

By working together, the IFRS Foundation and GRI provide two ‘pillars’ of international sustainability reporting  Tweet This!: a first pillar representing investor-focused capital market standards of IFRS Sustainability Disclosure Standards developed by the ISSB, and a second pillar of GRI sustainability reporting requirements set by the GSSB, compatible with the first, designed to meet multi-stakeholder needs.

Commenting on the agreement, Erkki Liikanen, Chair of the IFRS Foundation Trustees, said:

“At COP26 we heard strong support for consolidation in the sustainability reporting landscape.  The work of the ISSB and its global baseline concept will help deliver this objective for the capital markets, whilst this agreement with GRI will help ensure capital market standards are developed in a way that minimises reporting burden for those companies also using GRI Standards.”

Eelco van der Enden, Chief Executive Officer of GRI, said:

“The MoU between GRI and the IFRS Foundation is a strong signal to capital markets and society that a comprehensive reporting system, which combines financial and impact materiality for sustainability reporting, is possible on a global scale. Aligning GRI’s established and widely adopted standards for sustainability impacts with the investor-focused standards being developed by the ISSB will benefit both companies and investors, as well as a wide range of stakeholders around the world.”

Emmanuel Faber, Chair of the ISSB, said:

“For those interested in considering impact when assessing enterprise value, using the standards set by the ISSB and GSSB together will offer a complete and compatible suite of sustainability disclosures.  This agreement will see the two standard-setting boards cooperate in pursuit of that objective.”

Judy Kuszewski, Chair of the GRI GSSB, said:

“The collaboration between the GSSB and the ISSB demonstrates our shared commitment to the global alignment of disclosure requirements. This is crucial if we are to enable consistent reporting by companies, which increases accountability and drives responsible business practices. We look forward to aligning work programs and to making the two-pillar corporate reporting system a reality, with financial and sustainability reporting on an equal footing.”

The agreement, in the form of a Memorandum of Understanding (MoU), is the latest development in efforts to consolidate or align multiple international initiatives covering sustainability reporting into a more cohesive approach for the benefit of companies, investors and society at large.

The IFRS Foundation previously announced consolidation with the Climate Disclosure Standards Board and the Value Reporting Foundation (which houses Integrated Reporting and SASB Standards). The ISSB intends to publish, next week, proposed Climate and General Sustainability-related Disclosure requirements that, once finalised, will form the global baseline for climate-related disclosures. The global baseline concept has been welcomed by the G20 Leaders, the International Organization of Securities Commissions (IOSCO) and others.

As the leading global standard-setter for sustainability reporting that addresses an organization’s impact on the economy, environment, and people for a multi-stakeholder audience, the GRI Standards are adopted extensively by companies worldwide. Many jurisdictions look to the GRI Standards when developing their own multi-stakeholder sustainability reporting requirements. The GRI Standards are, also, continually reviewed, with current developments including new Sector Standards and an updated Biodiversity Standard.

This article is based on published information by GRI. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the publication’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://www.globalreporting.org/about-gri/news-center/ifrs-foundation-and-gri-to-align-capital-market-and-multi-stakeholder-standards/

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• The formation of a new International Sustainability Standards Board (ISSB), to develop—in the public interest—an all-inclusive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs
• A commitment by leading investor-focused sustainability disclosure organisations to consolidate into the new board: The IFRS Foundation is to complete consolidation of the Climate Disclosure Standards Board (CDSB an initiative of CDP) and the Value Reporting Foundation (VRF, which houses the Integrated Reporting Framework and the SASB Standards) by June 2022
• The publication of prototype climate and general disclosure requirements developed by the Technical Readiness Working Group (TRWG), formed by the IFRS Foundation Trustees to undertake preparatory work for the ISSB.

The Value Reporting Foundation believes these developments create the necessary institutional arrangements and lay the technical groundwork for a global sustainability standard-setter for financial markets, meeting the growing and urgent demand for streamlining and formalising corporate sustainability disclosures. 

Commenting on the announcement, Richard Sexton and Robert K Steel, Co-Chairs of the Value Reporting Foundation, said:

“Today’s announcement is a reflection of the changed world we live in – a world in which sustainability and long-term thinking are increasingly at the heart of business and investor decision-making. This is a transformation that both the IIRC and SASB helped lead, made possible by the many thousands of stakeholders who volunteered time and offered resources to develop the Integrated Thinking Principles, Integrated Reporting Framework and SASB Standards that are today used by businesses and investors around the world. The Value Reporting Foundation Board believes the consolidation announced today will help deliver effective disclosures to drive global sustainability performance. We count on your continued collaboration as we embark on this exciting next step.”

Also read:

GRI – Moves to expand disclosure for financial markets are welcome

78% of the world’s 250 largest companies report in accordance with the GRI Standards

References:

This article is based on published information by the IFRS Foundation. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the publication’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://www.ifrs.org/news-and-events/news/2021/11/ifrs-foundation-announces-issb-consolidation-with-cdsb-vrf-publication-of-prototypes/

The post IFRS Foundation announces International Sustainability Standards Board appeared first on SustainCase - Sustainability Magazine.

GRI welcomed the confirmation by the IFRS (International Financial Reporting Standards) Foundation that they will address the impacts on value creation of sustainability topics in their standards, by forming  an International Sustainability Standards Board (ISSB).

According to the IFRS Foundation announcement on 3 November, the new ISSB will develop a ‘global baseline’ for investor-focused sustainability disclosures, while a prototype climate disclosure has also been published. Additionally, the Climate Disclosure Standards Board (CDSB) and the Value Reporting Foundation (VRF, which includes IIRC and SASB) are to consolidate under the IFRS.

Eric Hespenheide, Interim CEO of GRI, said:

“GRI is pleased that the IFRS Foundation has recognized the merits of incorporating sustainability considerations into financial disclosures, through the creation of a sustainability standards board. We also welcome that the reporting organizations with a core focus on investors needs are to come together under one house.

We advocate for a comprehensive corporate reporting system, with a two-pillar structure in which robust sustainability and financial reporting are on an equal footing. The sustainability pillar, under which GRI sits, addresses a company’s external impacts on society and the environment, while the financial pillar needs to reflect sustainability risks to a company’s value. Today’s announcement marks a significant step towards strengthening that second pillar.

Disclosure on a company’s financially material sustainability topics – while important from the context of helping markets to assess opportunities and risks – is not sufficient to deliver full transparency on sustainability impacts, as envisioned by the GRI Standards and embraced by the EU.

Corporate transparency that meets the needs of all stakeholders requires improved connectivity between sustainability and financial reporting. I therefore reiterate once again that GRI stands ready to engage with the IFRS Foundation in support of this aim. We look forward to hearing more about the remit and scope of their new ventures, as well as inputting to the development of the proposed climate standard.”

78% of the world’s 250 largest companies report in accordance with the GRI Standards

References:

This article is based on published information by GRI. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the publication’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://www.globalreporting.org/about-gri/news-center/moves-to-expand-disclosure-for-financial-markets-are-welcome/

The post GRI welcomes moves to expand disclosure for financial markets appeared first on SustainCase - Sustainability Magazine.