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Towards comprehensive corporate reporting

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11 Sep 2020

Five internationally significant framework- and standard-setting institutions (CDP, CDSB, GRI, IIRC, and SASB) have published a statement of intent to work together towards a comprehensive corporate reporting system.

While GRI, SASB, CDP and CDSB set the frameworks and standards for sustainability disclosure, including climate-related reporting, along with the TCFD recommendations, the IIRC provides the integrated reporting framework that connects sustainability disclosure to reporting on financial and other capitals.

These organisations have now declared their intent to provide:

  • joint market guidance on how the frameworks and standards can be applied in a complementary and additive way;
  • a joint vision of how these elements could complement financial generally accepted accounting principles (financial GAAP) and serve as a natural starting point for progress towards a more coherent, comprehensive corporate reporting system; and
  • joint commitment to drive toward this goal, through an ongoing programme of deeper collaboration between them, and a stated willingness to engage closely with other interested stakeholders.

The “big picture” view of the relationship between the standards and frameworks, including their relationship to the IASB and FASB standards, foresees an approach to standard-setting that results in a globally agreed set of sustainability topics and related disclosure requirements under a rigorous and ongoing standard-setting due processes that will result in high-quality global standards.

The comprehensive corporate reporting system the paper envisions would then see three nested sets of reporting:

  • Reporting on matters that reflect the organisation’s significant impacts on the economy, environment and people;
  • reporting on the sub-set of sustainability topics that are material for enterprise value creation; and
  • reporting that is already reflected in the financial accounts.

Reporting already reflected in the annual accounts would continue to be the remit of IASB and FASB and the subset of sustainability topics that are material for enterprise value creation would be covered by CDSB and SASB. Both sets would be connected by an overarching integrated reporting framework. GRI Standards would enable companies to report sustainability information that describes their significant impacts on the economy, environment, or people, and hence their contributions towards sustainable development and could also be used to describe impacts on the company. CDP would fill the crucial role of technology in reporting and enable access for all stakeholders to corporate performance on sustainability topics. The standards rsulting from this comprehensive reporting system would enable companies to collect information about performance on a given sustainability topic once but provide relevant information to different users through appropriate communication channels.

Please click to access the joint press release and statement of intent (external link).

In addition, see Deloitte's Purpose-driven Business Reporting in Focus — Progress towards a comprehensive corporate reporting system.

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