The International Integrated Reporting Council and several other leading corporate bodies, including the Sustainability Accounting Standards Board, the Global Reporting Initiative and the Carbon Disclosure Project, announced plans Wednesday to align their standards and frameworks within two years at the World Congress of Accountants in Sydney, Australia.
Accounting Today reports the ground-breaking two-year project is focusing on driving better alignment in the corporate reporting landscape to make it simpler for companies to prepare effective, coherent disclosures that meet the information needs of capital markets and society.
Launched simultaneously at the Bloomberg Sustainable Business Summit in London and in Sydney, during the World Congress of Accountants 2018, the participants in the umbrella group, known as the Corporate Reporting Dialogue, committed to driving better alignment of sustainability reporting frameworks, along with other frameworks that promote further integration between non-financial and financial reporting.
The Corporate Reporting Dialogue actually launched four years ago as a way to achieve dialogue and alignment between some of the key standard setters and framework developers around the world that have a significant international influence on the corporate reporting landscape. It includes the Carbon Disclosure Project, the Climate Disclosure Standards Board, the Financial Accounting Standards Board (which participates as an observer), the International Accounting Standards Board (which also participates as an observer), the Global Reporting Initiative, the International Organization for Standardization, the Sustainability Accounting Standards Board, and is convened by the International Integrated Reporting Council.
Corporate Reporting Dialogue participants hold regular meetings to share their views and provide further cooperation. The participants have already adopted a Statement of Common Principles of Materiality, developed a common map of the reporting landscape, and took a common position in support of the recommendations of the Financial Stability Board Task Force on Climate-related Financial Disclosure, or TCFD. This collaborative project aims to align standards with the recommendations published by the TCFD in June of last year.
Under the new project, the various participants plan to map out their own sustainability standards and frameworks to identify the common traits and differences, while jointly refining and continuously enhancing the overlapping disclosures and data points to achieve better alignment. They will be taking into account the various focuses, audiences and governance procedures of the different organizations. Participants will identify how non-financial metrics relate to financial outcomes and how this can be integrated in mainstream reports.
An important aspect of conducting this project in the context of the Corporate Reporting Dialogue is to undertake this work with the overview of financial standard-setters, consistent with the ultimate aim of integrating financial and non-financial reporting.
In undertaking this project, the participants in the Corporate Reporting Dialogue aim to demonstrate visible improvement in the coherence, consistency and comparability of corporate reporting by business. This will lead to improvements in reporting from a multi-capital perspective for the long-term efficient allocation of capital given the changing nature of risks and opportunities.
“The different elements of the corporate reporting system are not working as harmoniously as possible, with the result being that corporate reporting can be seen to pursue conflicting objectives, under disjointed definitions with unclear aims,” said Corporate Reporting Dialogue chair Ian Mackintosh in a statement. “There is a renewed urgency to drive better alignment that can combat reporting fatigue, reduce burden and enable more effective corporate reporting. Today, the participants of the Corporate Reporting Dialogue have made clear their commitment to delivering this.”
Bloomberg Philanthropies will be providing funding for the project. “Transparent disclosure brings many benefits to global markets,” said Curtis Ravenel, global head of sustainable business and finance, at Bloomberg in a statement. “Advancements in corporate reporting over recent years have led to a better understanding of how businesses operate across their value chains. However, as efforts to improve disclosures have emerged, so has a range of varying guidance, frameworks and standards in the field. At Bloomberg, we are committed to helping organizations communicate clearly, succinctly and effectively with the market. That is why we are delighted to support this project, which will lead to better alignment in the corporate reporting landscape.”
More information about the project can be found on the Corporate Reporting Dialogue website.