Two international sustainable reporting standards setters have agreed to align their benchmarks.
The collaborative agreement between the IFRS Foundation and Global Reporting Initiative (GRI) pledges to combine the two organizations’ sustainability disclosure and reporting standards.
It marks the latest move among global disclosure reporting bodies to align frameworks, reducing the number of competing or contradictory standards applying to companies, asset managers and investors.
Many in the financial services sector have lamented the proliferation of sustainability-related reporting standards and datasets that has made it difficult to get a cohesive picture of portfolios and their impacts.
The move will see the two organizations’ respective standard-setting boards — the International Sustainability Standards Board (ISSB) and the Global Sustainability Board (GSSB) — unite to “coordinate their work programs and standard-setting activities”, according to a joint statement.
Erkki Liikanen, chair of the IFRS Foundation’s trustees, said: “At COP26, we heard strong support for consolidation in the sustainability reporting landscape.” He added that the agreement would provide “a more cohesive approach for the benefit of companies, investors, and society at large”.
Eelco van der Enden, CEO of GRI, described the agreement as “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”.
The jointly prepared standards would offer “a complete and compatible suite of sustainability disclosures” for investors, according to Emmanuel Faber, chair of the ISSB.
The ISSB will soon publish proposals for its own “Climate and General Sustainability-related Disclosure” requirements — the central goal of the body formed at the COP26 conference in Glasgow last year.