Standards bodies agree to collaborate on sustainability disclosures

The IFRS Foundation and the Global Reporting Initiative (GRI) will be coordinating their standard-setting activities to help harmonize the sustainability reporting landscape, the organizations announced on Thursday.

Members of the foundation and the initiative will join each other’s consultative bodies, and the International Sustainability Standards Board (ISSB) and the Global Sustainability Standards Board will coordinate their work programs and standard-setting activities.

The organizations said they hoped their coordination would reduce the reporting burden for companies while putting financial and sustainability reporting on an equal footing.

“At COP26 we heard strong support for consolidation in the sustainability reporting landscape. 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 the reporting burden for those companies also using GRI standards,” said Erkki Liikanen, chairman of the IFRS Foundation Trustees, in a statement.

Next week, the ISSB will publish proposed climate and general sustainability-related disclosure requirements that are intended to form the global baseline for climate-related disclosures, the organization said. The initiative is supported by the International Organization of Securities Commissions, among others.

Earlier this week, the U.S. Securities and Exchange Commission released proposals that would mandate climate-risk disclosures by public companies.

In October 2021, the Canadian Securities Administrators published their proposed approach to issuers’ climate-related disclosure, and the associated consultation generated about 130 comment letters. While the notion of explicit disclosure requirements targeting climate-related risks is widely supported, the details of what should be disclosed remain hotly contested.

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