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Position paper calling for a global standard-setter for non-financial reporting

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07 Jul 2020

The Eumedion Foundation based in the Netherlands has published a position paper 'Towards a global, investor focused standard setter for corporate non-financial reporting' calling on the IFRS Foundation to establish such a standard-setter.

Eumedion is a non-profit organisation that monitors listed companies in the Netherlands and in Europe on their ESG-performance and looks at risk management, remuneration, transparency and reporting. Eumedion operates as a representative of the interests of institutional investors in the field of corporate governance and sustainability.

The position paper published yesterday concludes the final views of Eumedion, following the publication of Eumedion’s Green paper in October 2019, the feedback received during the Eumedion Conference 2019, the formal and informal responses received and the insights shared during the round table that Eumedion organised together with Accountancy Europe on 9 March 2020.

Key messages of the position paper are:

  • Investors struggle to understand how a company creates long-term value and how a company lives up to the valid needs of society where non-financial performance matters.
  • There is a need for an International Non-financial reporting Standards Board (‘INSB’) to ensure that enforceable and consistent investor-relevant non-financial information is faithfully reported.
  • Eumedion calls on the IFRS Foundation to establish the INSB, as a second separate board next to the International Accounting Standards Board (IASB).
  • External auditors should provide at least limited assurance on the information reported; this would enhance the reliability of corporate non-financial reporting.

The position paper states that the EU needs to be credited for its important role in accelerating the adoption of IFRSs to the current near-global level and expresses the belief that the EU could play a similar role for international non-financial reporting standards. Eumedion also urges the EU to adhere to its leadership role in the field of non-financial reporting. However, the paper quotes ESMA Chair Steven Maijoor in warning that:

It would not only be short-sighted but also detrimental for investors – who typically operate in global financial markets – to build a set of corporate ESG disclosure standards that is only regional.

Please click to access the full position paper on the Eumedion website.

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