Consistency sought in sustainability, corporate reporting through global effort

By Ken Tysiac

The movement toward a unified global approach to sustainability accounting standards and comprehensive corporate reporting took a step forward Friday with the support of leading global organizations.

The International Federation of Accountants (IFAC) called for the creation of a new sustainability accounting standards board that would exist alongside the International Accounting Standards Board (IASB) under the IFRS Foundation.

Meanwhile, five global organizations issued a joint statement announcing a shared vision of what is needed for progress toward comprehensive corporate reporting and the intent to work together to achieve it. The collaborating organizations are:

  • The International Integrated Reporting Council (IIRC).
  • CDP, a global not-for-profit that drives companies and governments to reduce greenhouse gas emissions, safeguard water resources, and protect forests.
  • The Climate Disclosure Standards Board (CDSB).
  • The Global Reporting Initiative (GRI).
  • The Sustainability Accounting Standards Board (SASB).

It's hoped that by sharing and collaborating, these organizations will establish a global consistency in reporting that will reduce burdens on reporting organizations while facilitating analysis, interpretation, and action by users of information.

"The connectivity between sustainability-related factors and immediate financial viability is clearer than ever before," Charles Tilley, FCMA, CGMA, the CEO of the IIRC and former chief executive of The Chartered Institute of Management Accountants, said in a news release. "It is why we are committed to working with our partners to drive a holistic system for reporting across the value chain."

Tilley said businesses globally already are using a mixture of the organizations' frameworks and standards to provide stakeholders with robust, effective information to drive better decision-making and capital allocation through integrated reports. The goal of the collaboration is to provide further clarity on how to do this effectively.

Meanwhile, IFAC is proposing the creation of a new sustainability accounting standards board that would address the urgent and growing demand from investors, policymakers, and regulators for a reporting system that delivers consistent, comparable, reliable, and assurable information relevant to enterprise value creation, sustainable development, and evolving stakeholder expectations.

"The time for a global solution is now," IFAC CEO Kevin Dancey said in a news release. "…IFAC believes the IFRS Foundation, with the backing of public authorities, is optimally positioned to lead and coordinate this initiative, and they would do so with our full support. We recommend that the proposed board adopt a 'building blocks' approach, working with and leveraging the expertise and disclosure requirements of the CDP, CDSB, GRI, IIRC, and SASB."

Barry Melancon, CPA, CGMA, CEO of the Association of International Certified Professional Accountants and chair of the IIRC board, said in a news release that IFAC's recommendations are powerful and come out at a time when the world is in search of answers. He said this is an important moment for the IFRS trustees because businesses and investors need robust and trusted standards and interconnected oversight.

"A cohesive approach to reporting is not just more efficient, it is essential to unlock the positive force of value creation," Melancon said. "We also need innovation to complete the corporate reporting system, to ensure we have an assurance process that is fit for purpose and the technology to support high-quality reporting and governance."

In response to a request for comment about the IFAC recommendations, an IFRS Foundation communications manager explained that the summary of the June IFRS Foundation trustees' meeting notes that the trustees considered a report from a trustee task force on global developments with sustainability reporting and a focus on climate change.

The task force's report analyzes the different developments and the increasing demand for global standards that provide comparable, decision-useful, and auditable information to investors and other stakeholders.

The trustees noted that some influential stakeholders had expressed a view that the IFRS Foundation could or should play a role in developing these global standards. The trustees agreed that further steps should be taken to consult on this issue and they intend to publish a public consultation paper at a later date.

The Center for Audit Quality (CAQ), which is affiliated with the AICPA, applauded the progress toward a more consistent system for environmental, social, and corporate governance (ESG) reporting.

"A globally accepted system built from existing standards and frameworks, adapted to market needs, could help ensure companies put forth readily comparable ESG information," CAQ Executive Director Julie Bell Lindsay said in a statement. "Further, the financial reporting process that has long underpinned our capital markets serves as a model, providing a path forward for ESG reporting with greater comparability and reliability."

Ken Tysiac ( is the JofA's editorial director.

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