As highlighted in Sustainability and business — the call to action: build back better report, we began a programme of thought leadership exploring accountancy and sustainability. This is part of a series of briefs exploring sustainability, business and the finance professional’s key role. These briefs 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.
A collection of summaries of specific standards or frameworks, written from the management accounting perspective is part of this initiative. As a finance professional, you’ll likely encounter one or many of the sustainability frameworks and standards. It is 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 work with combinations of standards and frameworks at the same time. 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 many initiatives underway. They address the fragmented accounting and reporting landscape and build a coherent global approach to corporate reporting to encompass financial and non-financial reporting. This brief is intended to highlight significant recent developments.
A framework or a set of standards? The difference A framework is 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 In September 2020, recognising the urgent need to address the confusion around sustainability information and the need for a comprehensive solution, five of the leading sustainability and integrated reporting organisations issued a Statement of Intent to Work Together Towards Comprehensive Corporate Reporting.
The five leading organisations issuing the Statement include CDP, Climate Disclosures Standards Board (CDSB), Global Reporting Initiative (GRI), International Integrated Reporting Committee (IIRC) and Sustainability Accounting Standards Board (SASB). Their Statement summarises discussions that the Impact Management Project (IMP), World Economic Forum (WEF) and Deloitte facilitated.
In an effort to advance this work towards simplifying the corporate reporting landscape, the IIRC and the SASB (November 2020) have announced their intention to merge into a unified organisation, the Value Reporting Foundation.
