New foundation aims to create “comprehensive” corporate reporting framework.
The International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) plan to merge with the aim of providing investors and corporates with a “comprehensive corporate reporting framework across the full range of enterprise value drivers and standards to drive global sustainability performance”.
The two reporting standards setters intend to merge into a unified organisation by mid-2021, to be named the Value Reporting Foundation, led by Janine Guillot, currently CEO of SASB. IIRC CEO Charles Tilley will serve as Senior Advisor on the Value Reporting Foundation Board and chair the <IR> Framework committee. The new entity will be headquartered in London and San Francisco.
According to a statement, the new body will merge SASB and IIRC into a “credible, international organisation” that maintains the Integrated Reporting Framework and sets sustainability disclosure standards for enterprise value creation. The two organisations said the merger responds to calls from investors and corporates to simplify the corporate reporting landscape, providing greater clarity when communicating on drivers of enterprise value.
“Capital markets are hungry for information linked to enterprise value creation, but they cannot easily digest what comes from a fragmented reporting landscape,” said Robert Steel, Chair of the 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.”
Complementary reporting frameworks
Barry Melancon, Chair of the IIRC Board, said the Value Reporting Foundation would link and build on shared concepts across the two bodies’ existing reporting systems.
“The <IR> 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. Organisations globally already use both to communicate effectively with investors about how sustainability issues are connected to long-term enterprise value, with these endeavours ultimately benefitting other key stakeholders,” he said.
The International <IR> Framework and SASB Standards will remain complementary tools, but the Value Reporting Foundation will facilitate the use of both together.
In September, both bodies were signatories of a statement of intent to work toward a single comprehensive corporate reporting framework, with the CDP, CDSB and GRI, facilitated by the Impact Management Project, World Economic Forum and Deloitte. SASB and IIRC said their merger would advance coordination efforts, noting that the new foundation had “jointly signalled interest in entering into exploratory discussions” with CDSB in the coming months.
“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 SASB’s Guillot.
The merger was welcomed by Eric Hespenheide, chairman of the Global Reporting Initiative. “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,” he said.