The International Financial Reporting Standards Foundation and the Global Reporting Initiative have agreed to coordinate their standard-setting and work programmess between the IFRS Foundation’s International Sustainability Standards Board and GRI’s Global Sustainability Standards Board.
The move comes after the IFRS Foundation formally launched the ISSB last November during the United Nations COP26 climate change conference in Glasgow.
The IFRS Foundation and GRI said they recognise the considerable public interest in aligning where possible their respective work programmes, terminology and guidance – helping to reduce the reporting burden for companies and to further harmonise the sustainability reporting landscape at an international level.
They added that together they will provide two ‘pillars’ of international sustainability reporting – an investor-focused capital market standards of IFRS Sustainability Disclosure Standards developed by the ISSB, and a GRI sustainability reporting requirements set by the GSSB, compatible with the first.
The competing sustainability standard-setters have come under increasing pressure in recent years from global financial regulators such as the International Organisation of Securities Commissions (IOSCO) to standardise and align their sometimes conflicting standards as demand for sustainable investment products as significantly increased.
One of the main concerns is that it is difficult to compare the disparate frameworks on the market which can leave companies open to accusations of greenwashing.
“At COP26 we heard strong support for consolidation in the sustainability reporting landscape,” said IFRS Foundation chair Erkki Liikanen.
“The work of the ISSB and its global baseline concept will help deliver this objective for the capital markets, whilst this agreement with GRI will help ensure capital market standards are developed in a way that minimizes reporting burden for those companies also using GRI Standards.”
Eelco van der Enden, CEO of GRI added that the collaboration is a “strong signal to capital markets and society that a comprehensive reporting system, which combines financial and impact materiality for sustainability reporting, is possible on a global scale. Aligning GRI’s established and widely adopted standards for sustainability impacts with the investor-focused standards being developed by the ISSB will benefit both companies and investors, as well as a wide range of stakeholders around the world.”
©Markets Media Europe 2022