Completion of the consolidation of the Value Reporting Foundation (VRF) into the IFRS Foundation has been announced by the IFRS Foundation. The news comes due to the commitment made at COP26 to enhance staff and resources of the foremost global sustainability disclosure initiatives, assisting the IFRS Foundation’s new International Sustainability Standards Board’s (ISSB) endeavours to acquire a global far-reaching baseline of sustainability disclosures for the capital markets.
A paramount starting point for the development of the IFRS Sustainability Disclosure Standards are the VRF’s SASB Standards, while the Integrated Reporting Framework delivers connectivity between financial statements and sustainability-related financial disclosures.
Serving market demand, including from companies, investors and regulators, for simplification of the sustainability disclosure landscape, the consolidation follows on from the Climate Disclosure Standards Board (CDSB) into the IFRS Foundation earlier this year.
The ISSB, which regulates the SASB Standards, is entrenching the SASB Standards industry-based approach into its standard-setting process, including focusing on the international applicability of SASB Standards as a priority. The ISSB urges companies and investors to retain the full support provision for, and use of, the SASB Standards.
The IFRS Foundation’s International Accounting Standards Board (IASB) and the ISSB now hold collaborative responsibility for the Integrated Reporting Framework and thus agree on how to both consolidate and integrate it into their standard-setting projects and requirements.
The Foundation is dedicated to continued market activities in the development of IFRS Sustainability Disclosure Standards, including harmony in the reporting required by the IASB and the ISSB. To promote market engagement and to urge continued dialogue, the Value Reporting Foundation advisory bodies, education, membership and licensing programmes and networks are guided by the IFRS Foundation.
A select group of VRF Board Directors will transition into advisor roles, supervising IFRS Foundation Trustee meetings and to take an active role in a newly formed IFRS Foundation Transitional Advisory Group.
Erkki Liikanen, Chair of the IFRS Foundation Trustees, said:
"I am delighted that the IFRS Foundation has finalised consolidation with the VRF. This consolidation follows the successful consolidation of the Climate Disclosure Standards Board in February. These consolidations help us to respond to the demand from stakeholders and deliver on the commitment we made at COP26 – to harmonise the sustainability disclosure landscape and build on the work of existing reporting initiatives.”
Richard Sexton and Robert K Steel, Co-Chairs of the Value Reporting Foundation Board, commented:
“The Integrated Reporting Framework and SASB Standards were developed to meet market demand for effective reporting and management tools. Their adoption worldwide has enabled companies to voluntarily deliver comparable, consistent and reliable information for investors. Now, we look to a future under the IFRS Foundation where these tools can help deliver a global baseline for sustainability disclosure, 1 Any standard-setting proposals of the ISSB or IASB are subject to due process. connected to financial statements. We know the VRF team, as they take up new roles alongside colleagues in the IFRS Foundation, stand ready to meet this new challenge and deliver on this mission. We count on the ongoing support of our stakeholders globally to enable us to reach this goal.”