Two international setting boards have signed a deal to align their work programmes and reporting on sustainability.
The International Financial Reporting Standards (IFRS) Foundation and Global Reporting Initiative (GRI) have agreed to co-ordinate their capital market and multi-stakeholder standards. Under the deal, the IFRS Foundation will co-ordinate its recently launched International Sustainability Standards Board (ISSB) with the GRI’s Global Sustainability Standards Board (GSSB).
The ISSB was formally launched at November’s COP26 climate conference with the aim of developing a comprehensive global baseline of investor-focused sustainability disclosures for capital markets. Under the agreement, the Foundation and the GRI will also join each other's consultative bodies on sustainability reporting.
The move aims to provide two ‘pillars’ of international sustainability reporting, with the first representing investor-focused capital market standards developed by the ISSB. A second pillar of GRI sustainability reporting requirements set by the GSSB will be compatible with the first and will be designed to meet multi-stakeholder needs.
Both bodies said that the move recognises considerable public interest in aligning their respective work programmes, terminology and guidance. This will help reduce the burden on companies and further harmonise the sustainability reporting landscape internationally.
“At COP26, we heard strong support for consolidation in the sustainability reporting landscape,” said IFRS Foundation Trustees chair Erkki Liikanen. “The work of the ISSB and its global baseline concept will help deliver this objective for the capital markets, while this agreement with GRI will help ensure capital market standards are developed in a way that minimises reporting burden for those companies also using GRI standards.”
GRI chief executive officer Eelco van der Enden added that the agreement is “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 ISSB will shortly publish proposals for climate and general sustainability-related disclosure requirements. These will form the global baseline for climate-related disclosures, a concept welcomed by G20 leaders and the International Organization of Securities Commissions.
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