The International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI) agreed a Memorandum of Understanding (MoU) to commit the two organisations to coordinate work in a bid to harmonise sustainability reporting.
The ISSB-GRI collaboration is a landmark moment, highlighting how both organisations value the importance of working together to align sustainability-related standards.
The IFRS Foundation and GRI recognise the need to further harmonise sustainability reporting at an international level. Investor-focused IFRS Sustainability Disclosure Standards and multi-stakeholder focused GRI Standards can be viewed as two interconnected reporting pillars, which together can form a comprehensive corporate reporting regime for the disclosure of sustainability information.
Emmanuel Faber, Chair of the ISSB, said: “The ISSB is committed to creating a global baseline of reporting standards that meets the needs of investors. Our collaboration with GRI will bring clarity to the market on how our two sets of standards can interact to provide a comprehensive and seamless suite of reporting standards that meets the needs of broader stakeholders, while streamlining the process for companies.
“This first meeting of our technical teams has been truly encouraging and I look forward to our continued collaboration.”
Eelco van der Enden, CEO of GRI, said: “The collaboration between GRI and the ISSB is significant because it reflects that both organisations value the importance of working together to align our sustainability-related standards. I believe this will not only give companies greater clarity on reporting expectations, it can ultimately improve the quality and relevance of reporting data. I therefore welcome the progress achieved under our MoU so far.
“These outcomes are tangible first steps towards achieving the global, interconnected two-pillar system for corporate reporting, as envisaged through the MoU, which reflects the distinct yet equal importance of financial and impact materiality in sustainability reporting. We look forward to continuing to collaborate with the IFRS Foundation and the ISSB in support of this aim.”
Laura Woods, Technical Manager in ICAEW’s Financial Reporting Faculty said: “We are very supportive of the global baseline concept and the decision of the ISSB to focus on the needs of investors and allow other standard-setters, such as the GRI, to cater for the needs of wider stakeholders.”
Both the IFRS Foundation and the GRI Global Sustainability Standards Board will need to approve the process before implementation.
Meanwhile, in June the Trustees of the IFRS Foundation and the Board of Directors of the Value Reporting Foundation (VRF) voted to approve the consolidation of the VRF into the IFRS Foundation.
Consolidating the VRF will require several organisational arrangements to align with the vision and meet the objectives of the parties that led to their announcing consolidation plans at COP26 in Glasgow in November last year.
These arrangements will inform the work of the IFRS Foundation through the industry-based approach of the SASB Standards and the Integrated Reporting Framework.
The consolidation, effective from 1 August 2022, will support the work of the ISSB and follows the successful consolidation of the Climate Disclosure Standards Board into the IFRS Foundation in February 2022.
Both governing boards formally approved the consolidation in June 2022.
- The MoU between the ISSB and GRI was discussed in a recent webinar hosted by the ICAEW’s Financial Reporting Faculty in conjunction with the Sustainability and Climate Change community, ISSB’s Exposure Drafts explained. The webinar provides insight into the ISSB’s proposed standards from two staff members who have been instrumental in their development. The webinar may be of particular interest to those who are in the closing stages of responding to the ISSB (deadline is 29 July).
- A new global baseline? | ICAEW
- Sustainability reporting proposals: ICAEW initial views | ICAEW
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