The report addresses four broad areas. First, investors want to understand governance and processes, with regard to how the board and management identify, monitor and manage the risks, uncertainties and opportunities they face. The report then considers reporting needs relating to both the nature of these factors, in terms of characteristics such as context, importance and form, and approach, or how management is responding. Finally, it looks at scenarios and stress-testing and what investors want from them. A particularly helpful aspect of the report is the inclusion of a number of examples of current reporting practice from real companies, highlighting what is useful about them. A one-page summary and a discussion podcast are also both available.

Review the press release and publication on the FRC's website.

According to the group, the SEC should refrain from measuring the broader societal impacts of ESG compliance by listed firms because those matters are outside the regulator’s areas of expertise. “While several members of FER expressed concerns over lack of progress on environmental and social issues, the group agreed the costs of the SEC mandating these kinds of disclosures could be substantial and the potential gains would likely be slight,” said Richard Herring, Wharton professor of international banking and professor of finance, who is one of the 30 signatories to the FER statement.

Review the article on Wharton's website.

The letter notes the developments of the last few months beginning with the WEF publication Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation, then citing the IFRS Foundation consultation on setting up a global sustainability standards board and the statement of intent of CDP, CDSB, GRI, IIRC, and SASB to work together towards a comprehensive corporate reporting system.

The letter states that the same global standardisation and coordination as is already in place for financial reporting is needed for ESG reporting as well so that that companies of any industry or country are comparable and can be held accountable to investors. The letter outlines three steps for achieving this:

1. An independent global standard setting body should develop ESG standards that can be adopted worldwide. The letter notes that the IFRS Foundation is well positioned to do this and that the WEF supports the proposal to establish a Sustainability Standards Board (SSB) that would sit alongside the International Accounting Standards Board (IASB).
2. For the standards to be enforced in individual capital markets, regulatory authorities must endorse their use. The letter cites the support of the International Organization of Securities Commissions (IOSCO) for the IFRS Foundation initiative and the suggested "building blocks" approach and welcomes the statements.
3. For the IFRS Foundation standard setting process to best succeed, it should build on the main reporting initiatives already in use. The letter points at the work of CDP, CDSB, GRI, IIRC, and SASB and notes that the WEF's work has included helping to facilitate the collaboration among the five organisations and that the WEF looks forward to working even more closely with them in support of creating sustainability reporting standards through the SSB.

The WEF, which is also a member of the recently announced IFRS Foundation sustainability working group, concludes its letter by stating:

These, then, are the steps we need to complete to get to system change on ESG metrics. We support this process and the organizations that are working to achieve it. Concretely, we look forward to supporting the IFRS’s Sustainability Standards Board, as appropriate, during its establishment and as it delivers on its mandate. We will promote opportunities for high-level public-private dialogue to strengthen strategic alignment on these objectives and will mobilize corporate support at the chief executive level in the global business community. We also encourage capital market regulatory bodies to work with the IFRS Foundation and IOSCO to support the Sustainability Standards Board.

Review the full letter on the WEF’s website.