Today, five organisations—CDP, CDSB, GRI, IIRC and SASB—announced a shared vision for a comprehensive corporate reporting system and our commitment to collaborate to achieve it. The paper, titled Statement of Intent to Work Together Towards Comprehensive Corporate Reporting, provides:
- A shared vision for how existing sustainability standards and frameworks can complement generally accepted financial accounting principles (Financial GAAP) and serve as a basis for a coherent and comprehensive corporate reporting system;
- A joint commitment to drive toward this goal through an ongoing program of deeper collaboration between the institutions; and
- Joint market guidance on how these frameworks and standards can be applied in a complementary and additive way.
This joint vision is significant for several reasons. First, there are many types of organisations playing various roles in the sustainability disclosure landscape, which has led to ongoing confusion about which actors are playing which roles, and how companies and investors should interact with these different players. The paper addresses the complexity surrounding sustainability disclosure by explaining the unique role of frameworks and standards, which underpin and should not be confused with other important parts of the information eco-system, such as data aggregators, analytics providers, ratings and indices. We also describe the role of taxonomies and technology to enable sustainability-related data to be structured for sharing and comparison, as well as the importance of a publicly available data platform to democratise access to this information as a public good.
Second, because sustainability information serves a much broader array of stakeholders than traditional financial reporting, no single standard or framework suffices. Notably, there are two lenses through which to view environmental and social issues: how these issues impact a company’s financial performance and long-term enterprise value, and how a company’s actions on these issues impact society and the environment. A sustainability disclosure solution must meet these varied information needs. This paper sets out a vision of the elements necessary for a comprehensive corporate reporting system that includes both financial accounting and sustainability disclosure, connected via integrated reporting.
Perhaps most importantly, this is the first time that the five major players in sustainability disclosure have aligned on a definitive shared vision. Taken together, CDP, CDSB, GRI, IIRC and SASB guide most quantitative and qualitative sustainability disclosures and provide the framework that connects sustainability disclosure to reporting on financial and other capitals. Our joint commitment comes at a pivotal moment for progress: as climate change and the global pandemic exemplify the increasingly clear connection between sustainability performance and financial risk and return, regulators and markets are moving to determine their response. This joint paper builds on the important work of the Better Alignment Project, which was coordinated by the Corporate Reporting Dialogue. It also builds on SASB and GRI’s joint workplan to help make the two sets of standards easier to use together.
A true team effort, the paper is a significant step forward toward developing a common language, common visuals, and common vision for not only sustainability disclosure, but for the future of corporate reporting.