SASB and IIRC launch new reporting organization
SASB and the International Integrated Reporting Council (IIRC) today launched their new merged organization – the Value Reporting Foundation – as the latest step aimed at developing a comprehensive corporate reporting framework covering global sustainability performance.
The foundation intends to help companies and investors through three resources: integrated thinking principles to improve understanding of how value is created in the short, medium and long term; the integrated reporting framework to aid reporting on strategy, governance, performance, prospects and business models; and the SASB standards to offer investors consistent, comparable and reliable information on the ESG factors that are most relevant to companies.
The Value Reporting Foundation will more closely align the integrated reporting framework and the SASB standards, and is also committed to creating a more coherent corporate reporting system by working with the IFRS Foundation and other framework providers and standard setters.
At a virtual event to launch the new group today, Value Reporting Foundation CEO Janine Guillot described 2021 as a ‘momentous year’ for advancing sustainability disclosures. She pointed to the IFRS Foundation’s proposed creation of an International Sustainability Standards Board, the introduction of the EU’s Sustainable Finance Disclosure Regulation and the SEC’s request for input on climate change disclosures.
The SASB standards and integrated reporting framework are already complementary but the foundation aims to fully harmonize them over time – though it has yet to finalize a timetable for doing so, Guillot said. The foundation wishes to make it easier to use them together but not to replace the broader stakeholder reporting covered by GRI, she added.
Robert Steel, who co-chairs the new foundation’s board, said today that the histories and perspectives of SASB and the IIRC are complementary. ‘We can accomplish more of our shared vision together… The wind is in our sails to achieve great things,’ he told reporters.
SASB has previously taken a number of steps – in partnership with other organizations – to simplify and streamline the ESG reporting landscape. In July 2020, SASB and GRI announced they would work together to provide guidance on joint implementation.
Last year CDP, the Climate Disclosure Standards Board, the IIRC and SASB announced a shared vision for enhanced sustainability accounting disclosures through integrated reporting. This was followed in December 2020 by a prototype climate-related financial disclosure standard.
SASB’s standards align companies with 77 industries and provide industry-specific ESG reporting suggestions, based on financial materiality. As part of a recent review, SASB found that 68 of those 77 industries are significantly affected in some way by climate risk, totaling 89 percent of the market capitalization of the S&P Global 1200.