A determined request for major standard-setting attempts to closely align with and reinforce a global baseline for reporting sustainability-related data has been made. The call comes from 65 global, leading companies, investors and professional accounting firms. Developed jointly by the World Business Council for Sustainable Development (WBCSD), the Principles for Responsible Investment (PRI) and the International Federation of Accountants (IFAC), the approved clarifies the momentum and encouragement behind stronger alignment between sustainability standard-setting efforts.
The International Sustainability Standards Board (ISSB), the US Securities and Exchange Commission (SEC) and the European Commission in collaboration with the European Financial Reporting Advisory Group (EFRAG) all aim to enhance and develop corporate reporting to include and consider information related to sustainability issues. However, current draft standards and initiatives do not satisfy requirements in terms of concepts, terminologies and metrics. As these proposed sustainability-related disclosure needs are refined and settled, quintessential financial market players are demanding financial market regulators to avoid regulatory and standard setting fragmentation by aligning on key concepts, terminologies and metrics on which disclosure requirements are built.
For reporting entities to evade an undue inconvenience and for investors to make investment decisions that fully add to sustainable outcomes, a wide-reaching baseline of sustainability disclosures is required. Thus, in order to provide stakeholders with a clear, exact picture of an organization’s ability to create sustainable value over time, a consistent, comparable, reliable corporate reporting system is indispensable.