The IFRS Foundation and GRI are taking the latest step toward a more closely aligned set of global ESG reporting frameworks.
The organizations last week announced an agreement under which their respective standard-setting boards – the International Sustainability Standards Board (ISSB) and the Global Sustainability Standards Board (GSSB) – will co-ordinate their work programs and standard-setting activities.
The news came just days after the SEC proposed highly anticipated rule changes that, if approved, will require companies to make climate-related disclosures including on climate-related risks that are expected to have a significant impact on them. The SEC proposals are in part inspired by a desire to generate consistent and comparable reporting requirements for companies.
The IFRS Foundation announced the creation of the ISSB at COP26 last November, with the aim of developing a comprehensive global baseline of investor-focused sustainability disclosures for the capital markets. The foundation and GRI last week also said they will join each other’s consultative bodies on sustainability reporting activities.
‘The agreement reflects the importance of ensuring compatibility and interconnectedness of investor-focused baseline sustainability information that meets the needs of the capital markets, with information intended to serve the needs of a broader range of stakeholders,’ the organizations said in announcing the developments.
According to the groups, they provide two ‘pillars’ of international sustainability reporting: one being the IFRS Sustainability Disclosure Standards developed by the ISSB, and the other being the GRI sustainability reporting requirements set by the GSSB.
Erkki Liikanen, chair of the IFRS Foundation Trustees, says in a statement: ‘At COP26 we heard strong support for consolidation in the sustainability reporting landscape. 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 minimizes the reporting burden for those companies also using GRI standards.’
GSSB chair Judy Kuszewski says in the announcement: ‘The collaboration between the GSSB and the ISSB demonstrates our shared commitment to the global alignment of disclosure requirements. This is crucial if we are to enable consistent reporting by companies, which increases accountability and drives responsible business practices.’
The IFRS Foundation has previously announced consolidation with the Climate Disclosure Standards Board and the Value Reporting Foundation, which incorporates the integrated reporting framework and SASB standards. The ISSB plans to issue proposed climate and general sustainability-related disclosure requirements that will form the global baseline for climate-related disclosures.