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Clarity of purpose and intended audience
Some of the debate around sustainability reporting stems from the lack of consensus about what sustainability reporting is and who it is for. We believe more needs to be done to clearly articulate the differences in approaches taken by different sustainability standard-setters and who the intended audiences are. Read more
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Strategic plan and detailed roadmap
There is a risk that the recent fast pace of sustainability standard setting may lead to a default position of agile rather than strategic, resulting in standard setting that is almost too reactive. We strongly recommend that sustainability standard-setters publish a clear and detailed roadmap setting out the steps that need to be taken to achieve its core objectives in the long term. Read more
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Conceptual framework
One of the more significant features of the International Accounting Standards Board’s (IASB’s) standard setting is its Conceptual Framework – high-level, overarching principles covering key aspects of financial reporting. While perhaps not an immediate priority, a conceptual framework designed for sustainability standard setting should feature prominently in the plans of the ISSB and other relevant standard-setters. Read more
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Effective due process
Rigorous due process is a vital part of standard setting. Established practices may need to be flexed in the face of time pressures, but sacrificing them without very careful consideration would be counterproductive. As time pressures abate, sustainability standard-setters should consider a steadier pace of activity. Read more
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Independence and appropriate expertise
Other than professional competence and practical experience, it is also important that standard-setters are independent, unbiased and have no conflicts of interest. Sustainability standard-setting boards will also need the skills to support the process of adopting a brand new set of sustainability standards. Read more
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Stakeholder engagement and political pressures
Compared with financial reporting, there is a wider range of stakeholders with an interest in sustainability reporting and, increasingly, it is also the subject of much political debate. Effective engagement with this wider stakeholder group, to ensure adequate awareness of their views and concerns, is important for true legitimacy. Read more
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Avoid disclosure overload
Sustainability standards come with a significant volume of disclosure requirements but it is critical that sustainability reporting does not become just another box-ticking exercise where the focus is on compliance rather than communication. In this regard, cost-benefit considerations are a crucial element of developing reporting standards. Read more
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Interoperability
Interoperability is arguably the biggest challenge for sustainability standard setting. While the ISSB has been working on its standards, the EU and the US have been developing their own requirements, making the pathway to a global baseline less clear. We encourage major sustainability standard-setters to commit to minimising differences between their standards as a starting point when developing their own. Read more
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Prioritise implementation
Sustainability standard-setters should make the adoption and successful implementation of the new standards the highest priority, as doing so is key to ensuring the whole project’s continued success and credibility. Read more
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Assurance and enforcement
Without robust assurance and enforcement, there will be no certainty that information reported will be reliable or comparable. Like accounting standard-setters, sustainability standard-setters must produce standards that are of sufficient quality and clarity to allow for effective assurance and enforcement. Read more
Why sustainability reporting standards matter
As the world has woken up to the climate crisis, so a proliferation of sustainability reporting standards has emerged. In a recent report, ICAEW maintains that now is the time to take stock of what’s gone before and shape sustainability standard setting so that it can achieve its stated purpose.
Navigating the sustainability reporting standard setting landscape
Chris Nobes, a member of the steering group that oversaw the production of the ICAEW thought leadership report, Shaping sustainability standard setting, guides stakeholders through this complex area.
A framework for successful sustainability standard setting
As new standards are introduced to help businesses quantify their impact on people and the planet, the more vital it becomes that all standard-setters build from a consistent base, says Jeremy Nicholls, a contributor to ICAEW’s report, Shaping sustainability standard setting.
Building credibility and trust in sustainability reporting and disclosure
Collaboration is key when it comes to developing global sustainability reporting standards, says IAASB Chair Tom Seidenstein.
Sustainability assurance: understanding ISSA 5000
It is more important than ever to ensure that finance professionals are faithfully monitoring company sustainability assurance and reporting so that stakeholders and governments can judge businesses’ ability to reach their UN Sustainability Goals, Malcolm Bacchus, ICAEW President, told a gathering of accountants.
