Outline
The complexity surrounding sustainability disclosure has made it difficult to develop the comprehensive solution for corporate reporting, which is urgently needed.
A vision of a single, coherent global set of reporting standards has been advocated, which we explore further below. The foundations of this vision consists of a form of standard setting, which greatly reduces the burden on public listed companies. It facilitates accurate peer analysis, interpretation and action by its stakeholders, namely, investors.
The GRI, SASB, CDP and CDSB (a lot of initialisms, we know!) set the frameworks and standards for all sustainability disclosure, including climate-related reporting, along with the TCFD recommendations. The IIRC provides the integrated reporting framework that connects sustainability disclosure to reporting on financial and other capitals. Finally, the UN SDGs provide principle-based goals aimed to tackle worldwide issues. Taken together, these organisations guide the majority of sustainability and integrated reporting.
Sustainability disclosures are joining forces by proposing plans to help companies provide a more complete long-term vision, which also meets investors’ needs for comparable, trustworthy information.
There are simultaneous and complementary projects underway to clarify the corporate reporting landscape, to name a few:
Whilst there is a move to create a more unified approach in the future, we wanted to share with you our approach to achieve best practice. When considering sustainability frameworks and standards, we recommend a “building block” approach that can ensure consistency for investors, while enabling flexibility, to meet the needs of our companies’ specific industries.
Users of sustainability disclosures have various needs, which sustainability disclosure standards are designed to facilitate. The table below summarises the different functions of frameworks verses standards:
Frameworks, e.g. <IR> and UN SDGs | Standards e.g. SASB, CDP, GRI |
Principles based so can be widely applied | Metrics, data based, requiring specific disclosure |
Industry agnostic | Industry specific |
High-level content guidance | Disclosure of industry-related topics and metrics |
Can drive the connectivity of information | Enables comparability of information |
For instance, the IIRC Framework and GRI Standards can be used as complementary tools for investor-focused communications. Used together, they provide a more complete picture of long-term value creation, while meeting investor needs for comparable, consistent and reliable information.
We are constantly monitoring the changes in the corporate reporting landscape. The introduction of a comprehensive sustainability reporting standard will allow for greater alignment between frameworks, improved comparability, a stronger corporate narrative, allowing stakeholders to make more informed decisions.
We’d love to help you to understand the best approach to sustainability reporting for your company. You can download our sustainability reporting guide or get in touch for more information.