Disclosure Initiatives Consolidate

    Stockholm (NordSP) – The International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) announced they will merge into a unified organization, to be called the Value Reporting Foundation, by mid-2021.

    “Information is the lifeblood of good decision making. Capital markets are hungry for information linked to enterprise value creation, but they cannot easily digest what comes from a fragmented reporting landscape,” says Robert K. Steel, Chair, SASB Foundation Board of Directors. “This merger is an important step towards businesses and investors communicating with clarity and ease about the issues that matter most to financial performance.”

    The merger directly responds to calls from global investors and corporates to simplify the corporate reporting landscape and provide the market with a clear solution for communicating about the drivers of enterprise value. The foundation will set sustainability disclosure standards and provide investors and corporates a comprehensive corporate reporting framework “across the full range of enterprise value drivers and standards to drive global sustainability performance”. The merger was motivated by capital markets’ demand for evidence-based, market-informed, and transparent data in order to deliver long-term value to shareholders.

    “The Framework and the SASB Standards are complementary. Integrated reporting describes all relevant value creation topics and the approach to integrating them in corporate thought and reporting. SASB provides the precise definitions of the data that should be reported for these topics in each industry. Organizations globally already use both to communicate effectively with investors about how sustainability issues are connected to long-term enterprise value, with these endeavors ultimately benefiting other key stakeholders. Under the Value Reporting Foundation, we will link the concepts between the Framework and SASB Standards even further,” says Barry Melancon, Chair, IIRC Board.

    The Value Reporting Foundation will be headquartered in London and San Francisco, with staff around the world. Charles Tilley will serve as Senior Advisor through 2021, partnering with Janine Guillot (CEO of the Value Reporting Foundation) on the integration of SASB and the IIRC. Richard Sexton of the IIRC and Robert K. Steel of SASB will co-chair the Board of the Value Reporting Foundation. Mary Schapiro and Helen Brand will serve as Vice Chairs.

    “Sustainability disclosure is at the top of the agenda for many, creating incredible momentum towards simplifying the corporate reporting landscape. By merging two organizations focused on enterprise value creation, we hope to clarify the field. We stand ready to engage with the efforts of the IFRS Foundation, IOSCO, EFRAG, and others working towards global alignment on a corporate reporting system,” said Guillot.

    “This merger is a significant advancement towards building a comprehensive system of corporate reporting, as we work to ensure integrated reporting and sustainability disclosure have the same level of rigor as financial accounting and disclosure. But reporting should never be for reporting’s sake. Our focus is on ensuring businesses have effective governance over enterprise value creation factors and that investors are able to fulfil their role as stewards. We will continue to advance integrated thinking to achieve this,” said Tilley.

    Commenting on the formation of the Value Reporting Foundation and its future partnership with the Global Reporting Initiative, GRI Chairman Eric Hespenheide said, “GRI looks forward to working closely with the Value Reporting Foundation to continue progress towards the vision of a single, coherent system of corporate disclosure.”

    According to the announcement, the Value Reporting Foundation remains open to integrating other disclosure-focused entities, and the Foundation and Climate Disclosure Standards Board (CDSB) have jointly signaled interest in entering into exploratory discussions in the coming months.

    Image by Free-Photos from Pixabay

    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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