ICAEW welcomes increased sustainability reporting bodies’ alignment
11 September 2020: Responding to the joint statement issued by leading sustainability and integrated reporting organisations, ICAEW has welcomed the initiative as an important and necessary step towards a more comprehensive global corporate reporting system.
CDP, CDSB, GRI, IIRC and SASB currently guide the majority of quantitative and qualitative sustainability disclosures. Their joint statement published on Friday provides greater clarity on the steps being taken to support their growing alignment. In doing so, they add to the momentum behind calls for a global approach to enhancing the comparability and consistency of non-financial reporting.
Moving towards a more comprehensive corporate reporting system
In setting out how transparent measurement and disclosure of sustainability performance is now widely regarded as a fundamental part of effective business management, the joint statement also outlines some of the complexities associated with sustainability disclosures, reflecting different user needs.
The five bodies acknowledge that this has created confusion in the market and make clear their intent to deepen collaboration between the five bodies and other interested stakeholders to help drive progress towards a more comprehensive solution for corporate reporting. The statement describes how such a solution could build on existing financial reporting standards and sustainability standards, with integrated reporting providing a means for connecting them.
Applying existing frameworks and standards
The statement also provides useful market guidance on how the five frameworks and standards can already be applied in a complementary manner. It explains how the use of the frameworks and standards can enable companies to report sustainability information focused on ‘enterprise value creation’ as well as broader sustainable development goals while building on information already reflected in their financial accounts.
Time for change
Nigel Sleigh-Johnson, Director of the Technical Strategy Accountability Group at ICAEW, commented: “Broader and better non-financial disclosures can help businesses and their stakeholders to better understand the relationship between business activities, the environment, people and the economy. The demand for enhanced non-financial information – increasingly required by shareholders, regulators and other stakeholders around the world – has led to a confusing proliferation of non-financial standards, guidelines and frameworks.
“It is time for this to change, and ICAEW welcomes the timely initiative of these leading global bodies. Enhanced alignment between existing standards, guidelines and frameworks should help accelerate progress towards the establishment of a single principles-based, internationally recognised framework for non-financial reporting.”
Read the joint statement in full here.
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