Five Organizations to Create Single Set of Standards for Corporate Sustainability
- Knowledge Management
- Five Organizations to Create Single Set of Standards for Corporate Sustainability
Photo by Lynn Wagner
CDP, the Climate Disclosure Standards Board, the Global Reporting Initiative, the International Integrated Reporting Council, and the Sustainability Accounting Standards Board will work together to create a single set of standards for corporate sustainability reporting.
This approach is intended to help stakeholders base decisions on comparable information and reduce the burden on reporting companies.
The groups note the need for corporate sustainability data to be structured around agreed taxonomies and available in a public platform.
Five organizations that set global standards for sustainability reporting have announced that they will work together to create a single set of reporting standards. This approach is intended to help stakeholders base decisions on comparable information and reduce the burden on reporting companies.
In a statement launched on 11 September 2020, CDP, the Climate Disclosure Standards Board (CDSB), the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC), and the Sustainability Accounting Standards Board (SASB) said the urgency for reporting coherence is driven by “the increasingly clear connection between sustainability performance and financial risk and return,” as well as climate change and the global pandemic. The organizations cite a groundswell of stakeholder support for a comprehensive reporting system.
Sustainability disclosures enable stakeholders to understand a company’s impacts on society and the environment, and how these issues affect the organization’s financial performance and long-term enterprise value creation. The groups note the need for corporate sustainability data to be structured around agreed taxonomies and available in a public platform.
SDG target 12.6 commits governments to “Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle.” The global indicator (12.6.1) is “Number of companies publishing sustainability reports.”
Previous efforts to improve corporate reporting on sustainable practices include a toolkit launched by the UN Conference on Trade and Development (UNCTAD) in 2019, aiming to improve coherence between financial and sustainability reporting. UNCTAD noted that the diversity of reporting frameworks has presented a challenge for government agencies and investors interested in monitoring SDG implementation at the national level.
Harmonized sustainability reporting could help governments incorporate the private sector’s contributions to SDG implementation into voluntary national reviews (VNRs).
In April 2020, GRI issued suggestions for governments to capture business action on the SDGs in their VNRs through the use of corporate reporting. GRI stressed that capturing the contribution of the private sector is necessary for understanding what actions are needed and who can take them in order to achieve the SDG targets in each country. [Publication: Statement of Intent to Work Together Towards Comprehensive Corporate Reporting] [Joint press release]