Agreement to create an interconnected approach for sustainability disclosures
The International Sustainability Standards Board (ISSB) and the Global Sustainability Standards Board (GSSB), will be jointly worked on by the IFRS Foundation and Global Reporting Initiative (GRI). Both have announced a collaboration agreement under which they will seek to coordinate their work programmes and standard-setting activities.
At COP26, both made known their intentions, the IFRS Foundation launched the establishment of the ISSB to develop a fully global model of investor-focused sustainability disclosures for the capital markets, whereas GRI, announced that they will join each other’s consultative bodies in connection with sustainability reporting activities.
The IFRS Foundation and GRI recognise the ever increasing public interest in aligning, if possible, any respective work programmes, terminology and guidance – striving to remove unwanted burdens on a global level. Thus, the agreement reflects the importance of ensuring compatibility and interconnectedness of investor-focused baseline sustainability information – which in turn satisfies the needs of the capital markets, in particular stakeholders.
The vision is to collaborate in forming two ‘pillars’ of international sustainability reporting by the IFRS Foundation and GRI – the first pillar representing investor-focused capital market standards of IFRS Sustainability Disclosure Standards developed by the ISSB, and a second pillar of GRI sustainability reporting requirements set by the GSSB, compatible with the first, designed to meet multi-stakeholder needs.
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 minimises reporting burden for those companies also using GRI Standards.”
Erkki Liikanen, Chair of the IFRS Foundation Trustees
The MoU between GRI and the IFRS Foundation 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.”
Eelco van der Enden, CEO of GRI
For those interested in considering impact when assessing enterprise value, using the standards set by the ISSB and GSSB together will offer a complete and compatible suite of sustainability disclosures. This agreement will see the two standard-setting boards cooperate in pursuit of that objective.”
Emmanuel Faber, Chair of the ISSB
The collaboration between the GSSB and the ISSB demonstrates our shared commitment to the global alignment of disclosure requirements. This is crucial if we are to enable consistent reporting by companies, which increases accountability and drives responsible business practices. We look forward to aligning work programs and to making the two-pillar corporate reporting system a reality, with financial and sustainability reporting on an equal footing.”
Judy Kuszewski, Chair of the GSSB
The Memorandum of Understanding (MoU) agreement depicts the latest development in pushing to consolidate or align multiple international initiatives covering sustainability reporting into a more cohesive tactic, benefiting companies, investors and society at large.
The ISSB intends to publish proposed Climate and General Sustainability-related Disclosure requirements that, once concluded, will form the global baseline for climate-related disclosures. The concept has been welcomed by many leading organisations including G20 Leaders, the International Organization of Securities Commissions (IOSCO) et al. The IFRS Foundation had previously announced consolidation with the Climate Disclosure Standards Board and the Value Reporting Foundation (which houses Integrated Reporting and SASB Standards).
GRI Standards, widely recognised as the leading global standard-setter for sustainability reporting that addresses an organization’s impact on the economy, environment, and people for a multi-stakeholder audience, are adopted extensively by companies worldwide. Many jurisdictions adhere to such standards when developing their own multi-stakeholder sustainability reporting requirements. GRI Standards are continually studied, analysed and revised, with current developments including new Sector Standards and an updated Biodiversity Standard.