As highlighted in the Sustainability and business — the call to action; build back better report, we started on a programme of thought leadership to explore accountancy and sustainability. This is part of a series of briefs exploring the topic of sustainability, business and the finance professional’s key role. These briefs will help organisations consider the sustainability issues, how to integrate them into their long-term decision-making, and how to incorporate these issues into internal and external reporting.
This paper is designed as a summary of a specific standard or framework. It is written from the management accounting perspective. As a finance professional you are likely to encounter one or many of the sustainability frameworks and standards. It isy a crowded and fragmented landscape, with slightly different terms, inconsistent language and various measures between the numerous methodologies. Adding to the confusion is whether adoption is voluntary or mandatory and that some organisations simultaneously work with combinations of standards and frameworks. Finally, the approaches to reporting also differ. They range from annual reports, integrated reports, sections on an organisation’s website aimed at a specific audience or a stand-alone sustainability report.
Fortunately, there are several initiatives underway to address this fragmented accounting and reporting landscape. They will build a coherent global approach to corporate reporting that encompasses financial and non-financial reporting.1
A framework or a set of standards? The difference
A framework is a set of principles-based guidance for how information can be structured and prepared, and what broad topics should be covered. A set of standards are specific, replicable and detailed requirements for what should be reported for each topic. They are rules-based requirements.
Background
The International Integrated Reporting Council (IIRC), launched in 2010, is a collaboration between Accounting For Sustainability (A4S), the Global Reporting Initiative (GRI) and the International Federation of Accountants (IFAC). It was set up as a coalition of regulators, investors, companies, standard setters, the accounting profession and NGOs. The coalition promotes communication about value creation, preservation and erosion as the next step in the corporate reporting evolution.
The International Integrated Reporting (IR) Framework was launched in 2013, and a revised edition launched in January 2021.
In November 2020, the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) announced their intention to merge into a combined organisation, The Value Reporting Foundation.2