This chapter explains that integrated information and communication, which is to say routine data collection and reporting of material financial and non-financial or intangible aspects of corporate performance, is both the starting point and concrete expression of a firm’s practice of stakeholder capitalism. But while there has been great progress over the past decade in the development and implementation of non-financial corporate performance metrics and their inclusion in integrated corporate reports, the field remains underdeveloped and unfit for purpose in certain critical respects, particularly the comparability, completeness, consistency and relevance of such information to providers of capital. The chapter provides a practical guide for individual companies wishing to navigate this complexity and apply best practice in their own mainstream reporting. It also suggests how the business community as a whole could play a stronger leadership role in helping to improve the overall quality and comparability of non-financial reporting and its connection to financial reporting through the creation of an international standard or set of standards for this purpose. A baseline global sustainability reporting standard adopted by national regulators is ultimately what is needed to bring the resource allocation of companies, capital markets and entire economies into better alignment with stakeholder capitalism and sustainable enterprise value creation. The chapter concludes by tracing the recent acceleration of progress in this direction by international accounting authorities and recommends how companies can prepare themselves for the likely introduction of such an international sustainability disclosure standard within the next few years.
The two previous chapters have argued that in order to faithfully implement the principles of stakeholder capitalism a board and its executive team must rigorously integrate non-financial and intangible aspects of corporate performance into their firm’s strategy and management practices. There is a strong business case for doing so; these factors are increasingly material to enterprise value creation and resilience in today’s more technologically disruptive, environmentally constrained, socially fragile and geopolitically uncertain business context.
Integrated reporting goes hand in hand with such integrated corporate governance. Integrated information and communication, which is to say routine data collection and reporting of material non-financial and intangible aspects of corporate performance for internal as well as external consumption, is both the starting point and concrete expression of a firm’s practice of stakeholder capitalism.
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But while there has been great progress over the past decade in the development and implementation of sustainability and other non-financial corporate performance metrics and reporting, the field remains underdeveloped and unfit for purpose in certain critical respects, particularly with regard to the comparability, completeness, consistency and relevance to providers of capital of such information.
In this chapter, we provide a practical guide for individual companies wishing to navigate this complexity and apply best practice in their own reporting. We also suggest how the business community as a whole could play a stronger leadership role in helping to improve the overall quality and comparability of non-financial reporting and its connection to financial reporting through the creation of an international standard or set of standards for this purpose. A global sustainability reporting standard adopted by regulators that guides full ESG&D integration into mainstream corporate reporting on a comparable basis is ultimately what is needed to bring the resource allocation of companies, capital markets and entire economies into better alignment with the fundamental objective of stakeholder capitalism: sustainable enterprise value creation.
6.1 Assessing the Current State of Integrated Corporate Information and Reporting
Non-financial and particularly sustainability-related corporate reporting has expanded dramatically in the past two decades. However, it remains far short of what is needed to enable stakeholder capitalism to become the dominant mode of behaviour among companies, investors and market economies. This is in large part because material ESG&D factors have yet to be widely and comparably integrated into companies’ core strategies, governance processes and corresponding communications with investors and lenders. Only when material social and environmental externalities are systematically internalized in capital and other resource allocation decisions, both within and across firms, can the win-win, stronger-economy-and-society promise of stakeholder capitalism be fully realized.
The conceptual argument for integrated reporting has been well made1 and largely won.2 However, three preconditions necessary for its scaled application remain largely unfulfilled. First, the new reality of the heightened financial materiality of ESG&D factors has yet to be fully assimilated into the thinking and behaviour of most directors, managers and investors. Second, even the converted—those companies and investors that do accept the strong relevance of these factors for business value creation—do not yet have the information at their disposal to act on this conviction in a systematic and efficient fashion because of serious weaknesses in the comparability and relevance of such information in core communications with investors, especially the annual report. Third, in the absence of these two other preconditions, neither the magnetic pull of customary peer practice (to which managers and investors are very susceptible) nor the brute force of specific regulatory requirements has materialized at scale.
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As a result, integrated reporting remains the exception rather than the rule—best rather than customary practice. Surveys confirm that systematic internalization of ESG&D considerations remains far from the dominant paradigm in board rooms, management suites and investment committees.
To be certain, non-financial information reporting in the form of corporate responsibility or sustainability reports has risen remarkably in the past two decades and has become customary practice now among large and mid-cap firms. KPMG research in 20173 concluded that about three-quarters of the leading 100 firms in each of 49 countries issue corporate responsibility or sustainability reports, up from about one-fifth in 2001–2002. The global average reporting rate is now at least 60% in each industrial sector, and nearly half of such companies seek third-party assurance of at least some of this data.
However, integrated reports—those systematically combining financial and so-called non-financial (sustainability, governance and certain intangible asset) information in firms’ annual reports to investors and regulators with all of the added CFO and board scrutiny this entails—remain at a formative stage. Only about 22% of firms in KPMG’s most recent sample labelled their reports as integrated reports, and the methodology used in preparing them remains a long way from the comparability needed for effective benchmarking.
Stock exchanges have played an important role in driving reporting trends in a positive direction. In a global survey4 of 63 stock and derivatives exchanges around the world, 84% reported encouraging or requiring ESG disclosure. One-third encouraged or required firms to do so in an integrated fashion within their annual report. But most exchanges that reported investor interest in ESG disclosure said that such investor demand was limited; only 18% perceived investor interest to be “extensive.” Regarding climate change, only six exchanges (19%) included the recommendations of the Task Force on Climate-Related Financial Disclosures in their reporting guidance; however, 56% said they planned to include it.
The trend is unmistakably in the right direction. Over the past decade, sustainability reporting has become the norm for larger firms, and many are beginning to contemplate the next step in this journey, namely integrating these considerations into their core strategy, governance and reporting processes. Indeed, a recent survey of 400 CEOs, CFOs and other C-suite executives and senior accounting professionals at large firms in over 50 countries found that an overwhelming majority believe their companies and investors need to shift their focus to a wider conception of value creation and that financial and non-financial information need to be brought together to support enhanced risk management, decision-making and trust in this regard. 5 But only 24% of this group have confidence that current reporting satisfactorily meets the information needs of investors, and 84% of surveyed investors said that the reason they often do not use non-financial information in their decisions is lack of availability of comparable information among firms and lack of consistency and assurance of the information that is available. Thus, for all of its movement in the right direction, the non-financial reporting landscape remains fragmented and is producing information of limited value to providers of capital.6
But here, too, the winds of change are blowing with increasing force. The sharp and sudden economic contraction triggered by the COVID-19 virus may be a turning point. It has been characterized as the mother of all ESG&D shocks to value creation, leaving few companies and communities unscathed. The national health system weaknesses it exposed—coming in many countries on top of #MeToo sexual harassment and discrimination scandals; air pollution- and water scarcity-related production losses; employee health and safety disasters; trade war-related supply chain disruptions; cybersecurity breaches; consumer and regulatory backlashes about personal data privacy and ownership; skilled-worker shortages and related immigration restrictions; and social protests for faster progress on inequality, racial injustice and climate change—should eliminate any doubt in boardrooms that ESG&D factors have the potential to destroy substantial value in short order or even threaten the viability of a business.
Indeed, recognition is growing rapidly among companies, investors, accountants and governments that in this new context integrated reporting of sustainable enterprise value creation is a hallmark of a well-governed firm. Companies therefore need to get on with the job of adapting their annual reports and primary communications with investors and regulators accordingly, notwithstanding the complexity and still-evolving nature of practice and regulation. In particular, material ESG&D factors need to be more fully integrated into such mainstream reporting rather than segmented and de facto subordinated as matters of corporate social responsibility in stand-alone corporate responsibility or sustainability reports that are not subject to the same level of scrutiny by CFOs, boards and external assurers as financial information in annual reports.
Signs of this growing consensus include:
Businesses. The World Economic Forum’s International Business Council (IBC), approximately 120 of the world’s largest firms, agreed in 2019 to develop a core set of common metrics and disclosures7 of sustainable value creation that they could report against on a consistent basis in their mainstream reports. Impatient to demonstrate the shared value they create on a more credible and comparable basis and convinced that they could provide catalytic leadership to encourage regulators and private standard setters to improve the coherence and quality of corporate reporting in this respect, they worked in 2020 with the four largest accounting firms to refine 21 metrics and disclosures of relevance to all industries drawn from existing standards.8 Most IBC firms have indicated that they plan to begin implementing these. In a similar sign of progress, the number of companies using the SASB standards in their reporting rose from less than 200 in 2018 to over 800 in 2021.9
Investors. In 2006, when the UN-backed Principles for Responsible Investment was launched, 63 investment companies (asset owners, asset managers and service providers) with $6.5 trillion assets under management (AUM) signed a commitment to incorporate ESG issues into their investment decisions. Today, the number of signatories has grown to over 3000, including 500 asset owners, representing $90 trillion in AUM.10 A recent study of institutional asset owners found that 95% are integrating or considering integrating sustainable investing in all or part of their portfolios, and 57% envision a time when they will only allocate to third-party investment managers with a formal ESG approach.11 As for individual investors, 81% of people in a global survey12 said they wish to align their consumer spending behaviour with their values and 39% already have sustainable investments in their portfolios. Investors across all ages, wealth levels and regions said sustainable investing was growing in importance, and a majority (58%) expected it to become the new normal in a decade.
Accountants. The International Federation of Accountants (IFAC), representing nearly 3 million accountants in 130 countries and jurisdictions, sees “a significant opportunity to enhance trust in companies and confidence in markets by including information in corporate reporting … derived from the financial statements (i.e., ‘non-GAAP’ or ‘non-IFRS’ measures), other ‘Key Performance Indicators’ connected to financial performance, and broader information related to value creation, sustainability or environmental, social, and governance factors.” 13 It believes that “integrated reporting, bringing together the relevant information about a company, provides a holistic picture of performance and provides insights on an organization’s ability to create sustainable value over time. Integrated reporting supports ‘integrated management thinking’—which fosters organizational decision-making and change focused on broader, longer term value creation.” Similarly, Accountancy Europe, representing about 1 million accountants from 35 countries, states that “inclusion of a core set of global metrics for non-financial information in mainstream reports and in a connected way with financial information would respond to stakeholders’ concerns that these issues that are often material to business resilience are not reported with the same discipline and rigour as financial information. An approach to interconnected standards setting for corporate reporting is therefore needed that will standardise the qualitative characteristics of information and disclosure principles for mainstream reports, connecting non-financial information will financial reporting.”14
Regulators. Governmental and regulatory authority interest in mainstream ESG disclosure is also increasing rapidly. As of 2016,15 there were 248 mandatory ESG and sustainability reporting requirements around the world, up from 35 in 2006. The number of reporting instruments that require such disclosure in the annual or integrated report grew from 67 to 127 between 2013 and 2016. As of 2020, the total number of mandatory provisions had risen further to about 350.16 While many of these instruments are narrowly sector- or issue-specific, some are broader such as the EU’s 2014 Non-financial Reporting Directive and related 2016 UK regulations as well as Japan’s 2014 Stewardship and Corporate Governance Codes. Intergovernmental institutions have also become more active. The 2017 recommendations of the Financial Stability Board’s Industry-Led Task Force on Climate-Related Financial Disclosures have prompted the 95 governments and financial regulators that are members of the Network for Greening Financial Systems to encourage “all companies issuing public debt or equity as well as financial sector institutions to disclose in line with the TCFD recommendations.”17 Many are preparing to make such disclosure mandatory. More recently, the Board of the International Organization of Securities Commissions (IOSCO), whose member agencies regulate more than 95% of the world’s securities markets in some 130 jurisdictions, agreed in February 2020 to establish a Task Force on Sustainable Finance aimed at enabling it to play a driving role in improving sustainability-related disclosures made by issuers and asset managers and in avoiding duplicative efforts among regulators and other organizations.18 Pursuant to the work of that Task Force, the organization announced in February and June 2021 its priorities and vision for the establishment of an International Sustainability Standards Board (ISSB) under the IFRS Foundation.19 And in the US, following a December 2020 recommendation of the ESG Subcommittee of its Asset Management Advisory Committee, the Securities and Exchange Commission in March 2021 launched a public consultation process on how it could facilitate the disclosure of consistent, comparable and reliable information on climate change.20
International Accounting Authorities. Reflecting the growing interest in more consistent reporting of material sustainability-related information, the Board of Trustees of the IFRS Foundation, which oversees International Accounting Standards Board (IASB) financial reporting standards required in more than 140 countries and jurisdictions, launched a formal consultation process in late 2020 to determine whether and how it should enter this field.21 Based on the feedback received, the Foundation in April 2021 published a draft set of amendments to its constitution that would authorize it to establish an International Sustainability Standards Board (ISSB) as a sister body to the IASB. It also formed an informal working group of voluntary standard setters to help it undertake technical preparations for such a board.22 In parallel, the IASB has been reviewing its guidance regarding the Management Commentary,23 which is a potential vehicle for narrative and other qualitative information about a firm’s strategy in advancing long-term value creation, including with respect to ESG&D matters.
Thus, there is a growing consensus behind mainstreaming ESG&D and sustainability reporting in the sense of formally integrating it into the annual report and other core communications to providers of capital and connecting it to financial reporting. However, this practice remains nascent, with the complexity and lack of comparability of such reporting continuing to frustrate progress. International accounting authorities and national securities regulators are at long last mobilizing to solve this problem by creating a baseline global reporting standard that individual national jurisdictions could apply in a coherent, interoperable fashion. However, the challenges they face in this regard are not to be underestimated.
Among these challenges are first the ESG corporate reporting ecosystem consists of multiple types of actors serving different purposes (e.g., rating agencies, disclosure frameworks, sustainability stock and bond indices, advocacy initiatives and proprietary service providers) and multiple tools and frameworks within each of these functionally different layers of the ecosystem.24 Second, it includes different audiences often interested in different information (e.g., investors, NGOs, governments and the public). Indeed, investors themselves are a heterogeneous group, encompassing active, passive, quantitative, value, engagement and other styles of asset management, each with slightly different information preferences. Third, there are considerable differences in the relevance or materiality of information according to industrial sector; for example, some sustainability issues are inherently more important for B2C businesses than B2B businesses, and others are more relevant to extractive industries having extensive dealings with governments and poor, remote communities and so on.
This complexity drives the lack of comparability in current reporting. In the absence of a central international authority prescribing a common system of metrics and disclosures, multiple frameworks and mandates have emerged over time spanning these different scopes and primary audiences, contributing to confusion and costly inefficiencies. This patchwork quilt of reporting requirements and tools has been mapped by The Reporting Exchange, a free online platform developed by the World Business Council for Sustainable Development that collates comprehensive and reliable information on ESG reporting mandates and resources across more than 70 countries.25
The primary international standards, each of which is voluntary and serves a slightly different and fundamentally complementary purpose, have been under rising pressure from companies, investors, accountants and governments to align or merge, or at least to become more explicitly modular and interoperable. However, they have been slow to heed this call until recently, and companies, investors and governments have grown impatient. The International Business Council’s recent project to identify and collectively implement a common set of material metrics and disclosures drawn from existing voluntary frameworks is a case in point. Some governments have also begun to move forward on their own.
In particular, the European Commission launched an initiative in early 2020 to provide more specific guidance regarding how listed companies with more than 500 employees should report on an annual basis with regard to the environment, social and employee issues, human rights and bribery and corruption. It explained its rationale as follows:
1)
There is inadequate publicly available information about how non-financial issues, and sustainability issues in particular, impact companies, and about how companies themselves impact society and the environment. In particular:
a)
Reported non-financial information is not sufficiently comparable or reliable.
b)
Companies do not report all non-financial information that users think is necessary, and many companies report information that users do not think is relevant.
c)
Some companies from which investors and other users want non-financial information do not report such information.
d)
It is hard for investors and other users to find non-financial information even when it is reported; and
2)
Companies incur unnecessary and avoidable costs related to reporting non-financial information. Companies face uncertainty and complexity when deciding what non-financial information to report, and how and where to report such information. […]
The underlying drivers of these problems arise from regulatory and market failures. The reporting requirements in the NFRD (Non-Financial Reporting Directive) are not detailed, are difficult to enforce, leave a lot of discretion to reporting companies, and do not apply to some companies from which users say they need information. Market pressures on their own have not proven to be sufficient to ensure that companies report the non-financial information that users say they need. The market is characterised by a number of overlapping and sometimes inconsistent private non-financial reporting frameworks and standards, and companies face significant challenges in deciding whether and to what extent they should use these different frameworks and standards.26
The EU initiative, which is being extended to cover a larger universe of companies including those not listed,27 has created a sense of urgency within the business community and among other actors in the sustainability reporting world. Large businesses and investors have a natural interest in the emergence of a coherent international system of ESG&D reporting because they tend to operate in complex supply chains across many jurisdictions. The IBC firms undertook their project for the express purpose of accelerating the creation of such a system. They thought that leading by doing—taking a shared view about what constitutes best practice based on the respective strengths of the main existing voluntary private standards and implementing this composite best-practice framework at scale—might spur both these private standard setters and regulators to act more rapidly and coherently to form a generally accepted international standard and thereby help to avoid the emergence of a new patchwork quilt of national or regional regulatory standards.
This is similar to how financial accounting standards developed over the past century—through the iterative cooperation of companies, investors, accounting authorities and governments. In the US, financial accounting standards evolved over many decades through the interplay of private sector practice, independent public-private standard-setting bodies and regulators who adopted the standards set by such multi-stakeholder processes. In response to the advent of railroads needing to raise large amounts of capital in public markets, big industrial firms seeking better information to manage complex and far-flung operations, institutional investors requiring better and more transparent metrics to permit more efficient portfolio allocation, and individual investors wishing to guard against the risks of asymmetric information (e.g., misrepresentation or self-dealing by managers and institutional investors), financial accounting and disclosure practices evolved out of the practical experience of companies and their professional accountants. Innovations evolved into best practices, with many eventually codified first as private standards set by the accounting community (the American Institute of Certified Public Accountants Accounting Principles Board) and later as official standards under the auspices of the quasi-public independent authority of the Financial Accounting Foundation and its two similarly independent and public-private standards boards, the FASB and GASB, whose decisions have been formally recognized as authoritative by the US securities regulator, the Securities and Exchange Commission, since 1973.
The past 20 years can be thought of as a period of “market discovery” for sustainability reporting not unlike the innovation of more structured forms of financial reporting by the private sector during the late nineteenth and much of the twentieth centuries. Several essentially complementary sustainability reporting frameworks have been created and tested in the market during this period. These constitute the natural building blocks of the systemic solution which all stakeholders now desire.
However, the complexity of the sustainability reporting ecosystem (the different layers, audiences and substantive disciplines) has meant that no existing international authority has had sufficiently broad technical competence and stakeholder legitimacy to create it. There is an international financial accounting standard-setting body whose standards have been adopted in 144 jurisdictions with a governance structure that is analogous to that of the quasi-public independent public-private authority described above in the US: the IFRS Foundation and its International Accounting Standards Board. These are overseen by a Monitoring Board of public authorities, specifically financial market regulators. In principle, this three-tier structure could serve as a vehicle for the desired global integration and rationalization of existing ESG/sustainability standards under the auspices of public authorities. But as recognized by the IFRS Foundation in the recent changes to its constitution, this structure needs to be adapted to incorporate certain additional technical capabilities and broader oversight features important for the credibility and ultimate success of such a societally and politically sensitive endeavour. In addition, care must be taken to engage the primary intended producers and consumers of such reporting, the industrial and investment communities, which are far from monolithic in their information and disclosure preferences, as well as the world’s regulators, including particularly those of the largest markets. The US, for example, has never engaged fully in the IFRS, preferring to maintain its own GAAP accounting standards.
Thus, conditions are ripe for rationalization of material ESG/sustainability disclosure over the next few years, with the history of financial accounting standards development providing a template for the way forward, namely an initial reliance upon the private sector to develop and market test practices, followed by the translation of these into standards by a quasi-public, independent and multi-stakeholder technical body overseen by public authorities representing relevant regulatory domains and jurisdictions. This is the model that IFRS and IOSCO are now following for their entry into this field, closely tracking the vision originally articulated by the private sector and voluntary standard setters in the Accountancy Europe Cogito paper published in late 201928 and Joint Statement of the so-called Group of 5 leading voluntary standard setters in the fall of 2020, respectively.29 To add the necessary additional technical competence and multi-stakeholder character to this endeavour, IOSCO and IFRS have been consulting closely with these five private standard setters and the TCFD on the design and resourcing of the International Sustainability Standards Board, including with respect to its governance and initial substantive agenda. It is also negotiating with some of them the potential integration of their teams and intellectual property, building on the merger of SASB and IIRC into the Value Reporting Foundation in the spring of 2021.30 These preparations culminated in the Foundation’s announcement at the United Nations COP26 climate conference in Glasgow, Scotland, in November 2021 that it will form the new standards board in 2022. Two prototype standards were published for the board’s initial consideration, including one on climate change reporting that is included in Appendix A.31
The shared goal of all of these parties is to enable the new board to hit the ground running while ensuring that its standards build on rather than reinvent the important elements the market has developed over the past 15 years. At the same time, by making the process ultimately accountable to public authorities—overseen but not (micro-)managed by them—the intention is to increase the chances that the standards it produces will be widely adopted by such regulators while keeping politics at a distance during the board’s deliberations. Finally, there is a shared understanding that the process will focus on the nexus of ESG factors and sustainable enterprise value creation, that is, it will consider social, environmental and economic governance factors only to the extent that these are material to such value creation and therefore belong in annual reports and other core communications to investors.
In sum, mirroring the arrangements by which leading financial accounting practices have been standardized would appear to offer the right formula for balancing the need for speed, quality, legitimacy and independence in an international process having the task of delivering generally accepted standards for the reporting of material non-financial information. However, success is not a given, and the process will take time. Having been launched as a sister board to the IASB at the United Nations Framework Convention on Climate Change (UNFCCC) Conference of Parties (COP26) meeting in Glasgow, UK, the ISSB plans first to issue a climate standard exposure draft based on the prototype developed through informal consultations with its Technical Readiness Working Group of voluntary standard setters cited above. The full process, beginning with the formal consideration and issuance of a climate standard in 2022 and continuing through the development of a fuller set of ESG standards, is likely to take a number of years.
The private sector—the business, investor and accounting communities—has a key role to play in helping to ensure the continued momentum and ultimate success of this process, which depends upon the relevance of the standards to corporate decision-making. These communities have a powerful influence when they move together, and they are the natural constituency for the efficiencies that international standardization would bring given the cross-jurisdictional nature of their activities. They are also closest to the state of play in the market and best positioned to frame best practices and ensure the strong engagement of relevant NGOs and experts, who for reasons of both representation and expertise will need to participate in and support the process. Finally, CEOs have considerable convening power, particularly when they work together. They could help with the convening of leaders of the most relevant international organizations, governments, firms and civil society organizations in order to sustain the necessary political support for the process.
However, business leaders intent upon translating the principles of stakeholder capitalism into action in order to strengthen the sustainable value creation performance of their firms should not merely support and then await the outcome of this international standard-setting process. They should move rapidly to implement their own approach to integrated reporting in the form of a composite, best-practice application of existing standards in their annual report. This will ensure that their disclosures are fit for purpose in today’s new business context and can be benchmarked against comparable information from other firms for use in decision-making in their own boardroom as well as in financial markets. There is no need to wait for the international standards landscape to shake out over the next few years. Better returns and more satisfied investors and other stakeholders await those companies that act to improve their communications with investors and other stakeholders now.
The following section of this chapter provides a practical implementation guide for both of these business leadership action items: implementing integrated reporting in one’s own firm; and engaging collectively with other business leaders to expedite the creation of an international standard for non-financial information reporting, reprising the critical role that the private sector played decades ago in helping to establish generally accepted standards for financial reporting.
6.2 Implementing Integrated Reporting in the Firm
As discussed in Chap. 2, any firm that commits to align itself with the principles of stakeholder capitalism, such as those articulated by the World Economic Forum, the US Business Roundtable or any one of a number of conceptually related legal frameworks around the world, is by definition committing to “hardwire” or rigorously integrate material ESG&D considerations into its core governance, strategy and reporting. This is the practical essence of stakeholder capitalism—the bottom-line determinant of whether a company is “walking the talk.”
Most firms—even those that have done a good job of articulating to stakeholders their wider social purpose—are still at an early stage of the journey towards the systematic integration of material ESG&D considerations in their reporting on strategy and performance. The following is a practical guide that can be used by any business wishing to progress on this journey based on the experience of industry leaders in this regard.
6.2.1 Lay the Foundation: Embrace ESG&D Materiality and Design It into the Annual Report
Recognize within the board and management team the inherent implications of the growing materiality of ESG&D considerations for the structure and content of the company’s mainstream reporting and commit to adapt the annual report for this purpose.
Map ESG&D materiality through engagement of internal business units and functions as well as external stakeholders, and cross-check this against current strategy, performance and information and reporting systems.
Mobilize a thought process within the company and in consultation with key stakeholders around purpose, and cross-check this against current strategy, performance and information and reporting systems.
As documented above, more and more firms are embracing a wider concept of value creation and reflecting this in their governance, strategic thinking and disclosure by integrating material ESG&D considerations within them. The trend is unmistakable and inexorable. Companies need to get ahead of or at least on this curve rather than end up behind it and falling short of the expectations of their investors, employees, communities and, sooner or later, regulators.
The International Integrated Reporting Council (IIRC) has been tracking this trend. It reports that there are now over 2000 businesses using principles of the <IR> Framework in more than 70 markets.32 This includes:
Over 500 businesses (including 75% of the Nikkei 225) in Japan where the government has encouraged integrated reporting as a means of enhancing investor/company dialogue and building long-termism. The government backed this approach as part of the governance reforms undertaken by former Prime Minister Abe.33
Over 500 businesses in South Africa, where integrated reporting is core to the corporate governance code.
Around 400 companies in the UK, according to Deloitte’s annual report insights 2019, where 38% of their sample of FTSE companies use the IIRC’s concept of the capitals, in a country where integrated reporting is substantially equivalent to the local strategic report requirements.34
Hundred in Malaysia according to the local regulator, where integrated reporting has been adopted as part of corporate governance reform.
Ninety-six (74% of the ASX200) in Australia according to KPMG, again linked to corporate governance reform.
Fifty-eight per cent of the CAC40 in France—according to PWC.35 In France it has been a case of some of the big businesses providing leadership which has led others to follow suit.
The quality of practice is inconsistent and for the most part at a basic level. However, two best practices have emerged: ESG&D materiality mapping and corporate purpose articulation and alignment.
A recent quality review of 50 integrated reports identified Nedbank’s approach to materiality mapping as a best practice and helpfully excerpted a graphical representation of its key elements.36 A World Business Council for Sustainable Development (WBCSD) analysis37 of 159 of its members’ company reports found that the clear majority (97%) of reports (of which 39% were integrated reports of some sort, up from 26% in 2015) included a materiality assessment that considered stakeholder inputs. Most of these (86%) disclosed an overview of the process and often published a matrix of results within the report, continuing an upward trend (2015: 82%). Nearly half (46%) of members reviewed demonstrated strong alignment between report content and materiality assessment outcomes, representing a significant upward trend (2015: 24%). Based on its review, WBCSD defined the 30 top material ESG&D considerations and 10 further relevant topics; this list can serve as a useful starting point for company materiality mapping exercises.38 It also provided a case-study graphical illustration of a company best practice, that of Stora Enso, a Finnish wood and biomass products company.39
As for articulating the larger purpose of a company and connecting it to strategy and resource allocation, there are a wide range of resources and best practices available for consideration. One review identified ten companies with a perfect score regarding this aspect of their integrated report: ABN AMRO, KPN, Kumba Iron Ore, Nedbank, Philips, Redefine Properties, Suez, United Utilities, Valéo and Vodacom.40 The British Academy has issued two influential reports on corporate purpose stating that “profit should be a product of a corporation’s purpose, but not the purpose of the corporation. (…) Corporate purposes should profitably solve problems for people and planet and avoid profiting from creating problems for people and planet.” It further argues that defining corporate purpose requires identifying and creating accountability to a firm’s stakeholders, and thus the process of identifying and articulating a company’s purpose should involve consultations with its stakeholders. It cites the reports of three companies—Novo Nordisk, Danone North America and Anglian Water—as illustrations of good practice and defines eight principles for organizing businesses around their purpose.41 WBCSD cites the reports of two companies—Rabobank and SCG—as illustrating good practice with respect to stakeholder engagement, which is essential for both framing core purpose and mapping material considerations.42
Box 6.1 Materiality Disclosure Best Practice
A materiality process identifies and prioritizes the most significant ESG risks and opportunities from the perspective of the organization and its key stakeholders. It looks at the relative importance of issues to stakeholders and their impact on the business to help determine priority issues. Materiality forms the foundation for effective strategic decision-making, such as setting strategy, goals and KPIs. Key recommendations include:
Describe specific steps taken to identify, prioritize and validate material issues, including how you took the perspective of your organization and key stakeholders into account.
Include a range of factors when identifying and prioritizing issues, such as external trends, magnitude and likelihood of impacts, changes in materiality and alignment with enterprise risk management.
Disclose a prioritized list of outcomes through a matrix or concise list of highly material issues.
Where appropriate, acknowledge divisional and geographical differences.
Align the content of your report with outcomes of the materiality assessment, including strategy, targets, performance indicators, evidence of activities and details on implementation and control mechanisms.
Demonstrate internal validation of the results of the materiality assessment.
Explain how third parties contributed to the assessment process or validation of outcomes.
In assessing the quality of company reporting, WBCSD looks for this information in the body of the report or through clear links to additional information such as PDFs or webpages. We emphasize clear disclosure around internal validation and outside organizations that assisted in or validated the process; and we factor disclosures on the materiality assessment and outcomes into the Content analysis and they form an important part of our evaluation.
Source: World Business Council for Sustainable Development. Reporting Matters: Navigating the landscape—a path forward for sustainability reporting. 2019. Page 27
6.2.2 Assemble the Building Blocks of the Integrated Annual Report by Constructing Your Firm’s Disclosure “Stack”
Use the principles of integrated reporting in the <IR> Framework to set the conceptual foundation and guiding logic of the annual report, ensuring that it reflects the extent of integrated thinking within the firm about its purpose, financial/ESG&D interdependencies and their implications for sustainable value creation.
Identify salient financial and ESG&D performance themes to address in the report, including their interconnection and the corresponding implications for risk and strategy going forward, and assess the extent of their materiality.
Apply the most relevant combination of best-practice standards and frameworks (e.g., TCFD, CDSB, SASB and GRI) to report specific qualitative and quantitative aspects of performance and the implications for the firm’s governance, strategy, risk management, and metrics and targets, on an internationally comparable basis (construct your IR disclosure “stack”).
By articulating its core purpose and mapping the economic and ESG&D factors that have a material bearing on the firm’s ability to create value in line with this purpose, a management team lays the foundation for communicating the highlights of recent performance and forward strategy in shared and sustainable value creation terms. To ensure that it does so in a structured and rigorous manner, the team should familiarize itself with the fundamental concepts and guiding principles for integrated reporting enumerated in the Integrated Reporting Framework.43 Following these will ensure that the report conveys the full extent of the firm’s integrated thinking, that is, its assimilation of the principles of stakeholder capitalism through concrete practices and decisions like those described in Chaps. 4 and 5.
The <IR> guiding principles provide the key design criteria for a good integrated report:
Strategic focus and future orientation
Connectivity of information
Stakeholder relationships
Materiality
Conciseness
Reliability and completeness
Consistency and comparability
With these principles as a foundation, the team should then structure the firm’s material disclosures across the relevant parts of the annual report or other core communication with investors. This includes not only the financial statements but also the formal management commentary as well as other narrative elements of the report.
There is no one-size-fits-all approach to organizing an integrated annual report; however, there are a handful of well-established, best-practice standards and frameworks to guide disclosure of material quantitative and qualitative aspects of recent performance related to sustainable value creation and attendant risks and strategies. Just as utilizing the <IR> Framework as the conceptual foundation for the report will ensure the quality and comparability of its underlying logic and overall approach, so applying the methodologies prescribed by leading disclosure standards and frameworks like TCFD, CDSB, SASB and GRI will ensure that the specific metrics and narrative discussions used to convey historical performance and forward-looking strategies and targets are robust and comparable in the market.
Given their different primary emphases, these standards can be used in a complementary manner on top of the <IR> framework to construct the firm’s ESG&D disclosure “stack,” with the mainstream integrated annual report as the vehicle for communication particularly but not only to providers of capital. Figure 6.1 is a graphical depiction of the different substantive layers of the ESG&D corporate reporting stack and how the primary existing voluntary standards map onto these in an essentially complementary fashion by virtue of their respective primary areas of emphasis and use in the market.
Fig. 6.1
ESG&D disclosure stack (principal elements and corresponding standards/frameworks)
×
Starting from the bottom, or foundation, of the stack:
<IR> Framework: The conceptual framework and set of guiding principles for use in constructing an integrated report (as described above).44
TCFD Recommendations: For climate change only, an industry task force convened by financial regulators that are members of the Financial Stability Board has issued recommendations regarding corporate climate change disclosure. These recommendations are not a standard in the sense of prescribing a specific set of disclosure requirements following formal external consultations on preliminary drafts. Rather, this influential guidance from a balanced and respected group of private sector institutions has done something more fundamental. It has established a new behavioural norm of good corporate governance in respect of climate change by asserting that all organizations with public debt or equity, as well as other types of organizations, should provide climate-related financial disclosures in their mainstream (i.e., public) annual financial filings. To this end, it provided a standardized categorization of climate risks and opportunities and recommended that these disclosures be made in four functional areas: governance; strategy (with reference to scenarios); risk management; and metrics and targets. It provided further guidance regarding what should be disclosed in these four areas. But as a set of industry recommendations rather than a formal standard, it did not prescribe a detailed set of requirements in this regard. The three relevant global voluntary standards described below have since aligned their specific reporting requirements with the TCFD recommendations to facilitate their practical implementation by companies within their existing disclosures. In the case of CDSB and SASB, they have done this jointly in the form of a co-branded TCFD implementation guide45 and good practice handbook.46
CDSB Framework: For environmental and natural capital (the “E” in ESG&D), the CDSB framework is a prescriptive standard resulting from a structured consultation process developed with the technical support of all of the largest accounting firms and key professional accounting associations. It prescribes 12 specific reporting requirements and multiple specific sub-requirements, addressing particularly the “how” of translating material environmental information into a mainstream report. While largely leaving it up to each company to determine its choice of quantitative metrics, it defines the specific nature, format and boundary conditions of qualitative reporting, the firm’s narrative communication of its targets, strategies, risks, performance, outlook, policies, governance processes, assurance procedures and so on. This is crucial context for the quantitative metrics the firm reports, as it provides insight into the firm’s interpretation of its historical performance and what it plans to do going forward as a result. The CDSB, whose secretariat is hosted by CDP, has recently expanded its framework to cover the “S” of ESG&D issues. It is used by nearly 400 firms across 10 industry sectors worldwide.
SASB Standards. SASB prescribes industry-specific and largely quantitative metrics (KPIs) for 77 different industries across 11 sectors of the economy. It provides a materiality map to guide preparers in determining which thematic disclosures are likely to be financially material for their firm. The SASB standards were developed through a structured consultation process and are the most specific and comprehensive industry sector metrics available to use in disclosing material information in mainstream reports and core communications to investors. Thus, the qualitative reporting primary focus of CDSB and quantitative reporting primary emphasis of SASB are quite complementary and can be “stacked” together for environmental and soon social topics insofar as both standards are designed for mainstream reporting of financially material matters (those relevant to business value creation).
GRI Standards. The GRI standards are by far the most widely applied sustainability reporting framework; however, they have traditionally been applied primarily in stand-alone sustainability reports rather than mainstream or integrated reports. This reflects GRI’s different definition of materiality, which focuses on stakeholder and societal impacts rather than the intersection of business value creation and stakeholder/societal value creation, which is the focus of integrated reporting. Nevertheless, as represented by the downward arrows in the graphic, many individual GRI metrics and required disclosures are relevant for both enterprise and wider societal value creation, and companies may wish to include these in their mainstream and integrated reports subject to an assessment of their materiality, including those selected by the World Economic Forum’s International Business Council for inclusion in its recommended core set of cross-industry metrics and disclosures (see below). In addition, companies may wish to issue both an integrated annual report having investors as the primary audience and a stand-alone sustainability report having additional stakeholders and the public as the primary audience. These two reports and their content can be highly complementary and overlapping, particularly in the form of these “dual-purpose” GRI metrics.
Thus, as illustrated in Fig. 6.2, these five key frameworks and standards, all of which are global in scope and have been applied across multiple industry sectors for many years, are fundamentally complementary. Each primarily addresses a distinct part of the ESG&D corporate disclosure stack illustrated in the diagram above, and each has an important role to play in the integrated annual report portion of that stack.
Fig. 6.2
Main voluntary standards address different materiality concepts in a complementary manner47
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There is one additional, more recent initiative that prescribes a subset of metrics and disclosures, drawn from all of those listed above, which it deemed to be relevant for all industries to include in their mainstream reports:
WEF International Business Council Core Metrics and Disclosures: Concerned that most companies have not been applying these five essentially complementary standards and frameworks on a consistent, comparable basis, and that this is preventing companies from effectively communicating their shared and sustainable value creation and contribution to progress on the Sustainable Development Goals, the member companies of the World Economic Forum’s International Business Council undertook a project in 2020 to identify a baseline set of metrics and disclosures drawn from these standards that are relevant to virtually all industries. These 21 core and 34 expanded metrics and disclosures were issued in its September 2020 report entitled “Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation.”48 The companies will begin reporting on these common metrics and disclosures in their mainstream reports or other core communications to investors in 2021–2022. This collective action initiative, supported by the world’s four largest accounting firms, aims to create a common cross-industry foundation of sustainability disclosures drawn from particularly GRI, SASB, CDSB and TCFD that could be supplemented by more detailed industry-specific metrics, such as those prescribed by the SASB standards. This would provide the market with a core set of comparable information to enable better benchmarking and investment decision-making even as international accounting authorities and governments develop fuller official standards and legal requirements over the next several years.
Even with a good understanding of the individual elements of this disclosure stack, the task individual firms and their report preparers face in pulling these pieces together into a coherent whole may seem daunting. While the IFRS/IOSCO process has great potential to simplify matters by prescribing a baseline global standard, this is likely to take a few years potentially in a number of stages, and its early, widespread adoption by regulators is not guaranteed.
Under such fluid circumstances, taking a wait-and-see posture and maintaining current disclosure practices may seem like the most logical course of action. However, there is a stronger case for firms to act without delay to construct their own integrated report based on their particular considerations and context. First, investor expectations of their portfolio firms are evolving rapidly and well ahead of regulators’ actions, as initiatives such as the Net-Zero Asset Owner Alliance,49 recent BlackRock letters50 and ambitious Glasgow Financial Alliance for Net Zero51 illustrate. Second, employee, consumer and general public attitudes are shifting as well, and this is turning up the heat, so to speak, on governments and stock exchanges around the world. Third, the evidence from <IR>, TCFD and other such initiatives is that companies do not achieve the high quality of reporting they aim for in one reporting cycle. Enhancing governance, controls and measurement of ESG information are all essential parts of the implementation process, and it takes time to refine them. An early start is thus certainly better than a late start.
The writing would appear to be on the wall: mandatory mainstream ESG/sustainability reporting is coming sooner or later to some or all of the jurisdictions in which your firm operates. It would be far better to anticipate these changes than be compelled to completely overhaul the firm’s disclosure practices in a few years’ time. Moreover, the outline of a global baseline standard for material ESG/sustainability-related disclosure to investors and financial regulators is already coming into focus by virtue of the work of the private standard setters’ collective input into the IFRS/IOSCO process.52 This preparatory technical guidance suggests the following four-part approach to applying this stack in an integrated annual report during the next few transitional years until the formal promulgation of a global standard by international accounting authorities and its adoption or adaptation by national regulatory authorities:
1.
Report against the most recent version of the IFRS climate change standard (see Appendix A for the prototype standard on which the new International Sustainability Standards Board will base its exposure draft in 2022).
2.
Report against the 21 World Economic Forum IBC Measuring Stakeholder Capitalismcross-industry “core” metrics and recommended disclosures and consider reporting against the most relevant of its “expanded” metrics and disclosures (see Appendix B).
3.
Report against the SASB industry-specific metrics that pertain to the firm’s main business lines as per its “materiality map” (see Appendix C).
4.
Report any other information that careful consideration of the IFRS General Requirements for Disclosure of Sustainability-Related Financial Information Prototype Standard53 leads the firm to believe would be of important relevance to its value creation over the medium term (e.g., three to five years).
As the ISSB moves beyond climate change in the coming years to establish standards on additional ESG/sustainability topics, firms should plan to refine those elements of their reporting accordingly, progressively replacing reporting based on one or more of the voluntary frameworks listed above with a revised treatment of the topic based on these new standards as they become available. In taking this approach, firms will place themselves on the best-practice frontier of ESG/sustainability reporting, anticipating the likely path of regulatory requirements and reducing the transaction costs of having to catch up to these through a more radical, one-time reinvention of information systems and reporting practices.
6.2.3 Review, Assure and Approve for Issuance
Obtain comments on draft report from relevant internal governance and advisory committees.
Assure key elements, including key material ESG&D disclosures.
Secure approval of the CFO for presentation to and approval by the CEO and board.
As the firm’s main disclosure to investors, the integrated annual report will require the CFO’s review and comments, and it should also seek the same from relevant internal and external advisory committees. As much of the report as practicable should be assured, whether in terms of the verification of specific data or strength of related management systems. Finally, as the custodian of the firm’s purpose and its accountability to investors and other stakeholders in terms of its risk management, value creation and licence to operate, the board and its Audit Committee, as well as the CEO, should review and approve the report before issuance. Some firms have a specific committee on sustainability and ESG matters. The views of this group will be particularly relevant.
6.3 Accelerating the Creation of an International Standard Through Collective Business Leadership
As the foregoing discussion illustrates, although there is considerable complexity in the current ESG reporting landscape, the main existing voluntary standards exhibit a certain complementary logic. They can be applied in a stacked manner by companies wishing to tell a story that is at once coherent and based on market-tested best practice. But while this potential exists and reflects best practice, it is a long way from customary and consistent practice, which is what is needed to more fully align capital allocation decisions within boardrooms and financial markets behind the sustainable value creation strategies that would accelerate the implementation of the SDGs.
This systemic internalization of ESG&D factors in corporate and investor governance awaits a deliberate push, which clearer and more consistent disclosure norms can help provide. But efforts by individual companies, as recommended above, can only go so far. They are unlikely to produce the scale of behavioural change that social and economic conditions demand and the principles of stakeholder capitalism promise. As with the evolution of financial standards in decades past, the time has come for the top-down force of governmental action to accelerate convergence around a global solution, albeit by leveraging rather than substituting for the bottom-up momentum that has already been built within the business community and voluntary standard-setting community.
Given the highly interdisciplinary, public-private nature of ESG&D disclosure, the global business community has a crucial role to play in catalysing and shaping the process of international standards harmonization. In the first instance, it should wholeheartedly support the IOSCO and IFRS initiatives and strongly encourage national policymakers to do so as well rather than pursue their own national or regional solutions. It should encourage regulators around the world to adopt this common, baseline standard outright recognizing that it can be supplemented where required with additional national building blocks while maintaining the global interoperability of the ISSB cornerstone intact.
IOSCO and IFRS are keen to have this corporate engagement and support, as they are acutely aware of the threat disparate national approaches pose to the entire endeavour of improving capital allocation through more complete, consistent and comparable information. And they are mindful of the important role of civil society in shaping the decisions taken by political authorities, including the NGOs which have set the voluntary standards that have been widely adopted thus far. These have all been multi-stakeholder partnerships in which the industrial, investment and accounting communities have been deeply involved. Accordingly, the private sector and IFRS and IOSCO have a mutual interest in anchoring global standards for mainstream reporting of material ESG&D factors in a clear understanding of how these leading voluntary standards and frameworks, as well as the recent WEF IBC cross-industry metrics which are a composite of them, fit together based on the primary role each plays in the ESG&D disclosure stack outlined above (see Fig. 6.1).
As the primary producers and consumers of such information, business, accounting and investor leaders have a crucial role to play in helping to establish and sustain a broad political mandate for the kind of international and public-private-civil society cooperation that will be needed for IFRS and IOSCO to succeed. Today’s business leaders should take inspiration from the history of financial accounting standards—the Financial Accounting Foundation and Financial Accounting Standards Board in the US, and IFRS and IASB at the global level, as discussed in the preceding section. Other multi-stakeholder international governance efforts may also be instructive, such as the birth of Internet Corporation for Assigned Numbers and Names (ICANN) for which a global consultative process to consider governance options was overseen by the US Department of Commerce54; the Global Fund to Fight AIDS, Tuberculosis and Malaria for which a preliminary public-private Transitional Working Group was formed to develop governance options55; or indeed the Financial Stability Board’s experience in organizing the Task Force on Climate-Related Financial Disclosures.
Each of these was a purpose-built, public-private process to solve an interdisciplinary policy challenge for which much of the relevant expertise and capabilities resided in non-state actors. Each was also a response to a policy challenge that all stakeholders believed required a rapid solution. This is certainly the case for sustainability/ESG disclosure today, as evidenced by recent pronouncements by the EU and other key actors and by the limited time remaining for the world to generate the progress necessary to achieve the 2030 Sustainable Development Goals and targets of the Paris Climate Agreement.
IOSCO, IFRS and the global accounting community56 are forthrightly, if belatedly, rising to this challenge, and the main voluntary standard setters are showing signs of being ready to come together behind such an integrated solution rather than retain their pieces of the incumbent architecture. In September 2020, facilitated by the Impact Management Project, World Economic Forum and Deloitte, the five leading such organizations issued a joint Statement of Intent to Work Together Towards Comprehensive Corporate Reporting57 in which they provided a clear vision of such a solution, which helped to shape the initial thinking and planning of IOSCO and IFRS in this regard.
Against this backdrop of converging institutional agendas but still significant political uncertainty, strong engagement by the global business community could be decisive; it could make the difference between comprehensive and legitimate global standards emerging within a couple of years and a jumble of NGO and official global and regional frameworks persisting for another decade or more. With ten years remaining in the quest to attain the Sustainable Development Goals, including the interim progress scientists advise must be achieved by 2030 in order to avert a dangerous accumulation of greenhouse gases in the atmosphere by mid-century, the world cannot afford continued delay in aligning the information supplied to capital markets with these crucial aspects of sustainable enterprise value creation.
The five voluntary standards organizations that issued the Joint Statement of Intent charted a clear and compelling path forward. The IFRS Foundation’s International Sustainability Standards Board they foreshadowed would be a global public good. It should not be viewed as a substitute for national regulation, such as that being actively considered by the European Union, but rather as a complement to and enabler of such national action. Only national regulatory authorities can legally require disclosure—their role is thus crucial. But because capital and commerce flow across national boundaries, national disclosure requirements need to be consistent or interoperable at their core if they are to achieve the objective of effecting a more sustainable allocation of capital, and only an international reporting standard or set of standards can provide this.
National jurisdictions can supplement a global standard for reporting of sustainability factors material to enterprise value creation with requirements for reporting of societal impacts and other considerations, such as many of those pioneered by the Global Reporting Initiative. However, they would be ill advised to replicate an underlying global standard for reporting to investors for the same reasons they decided years ago to develop the IFRS regime for financial reporting. The business community has an intrinsic interest in seeing material ESG (& someday D) reporting take a globally coherent form. For this reason, the champions of stakeholder capitalism and sustainable enterprise value creation should play an active role in encouraging the accounting, investor, governmental and NGO communities to rally around the new ISSB without delay.
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See International Integrated Reporting Framework, International Integrated Reporting Council, 2013; and Creating Value: The Cyclical Power of Integrated Thinking and Reporting, International Integrated Reporting Council, 2016.
See, for example, How Does European Sustainable Funds’ Performance Measure Up?, Morningstar Manager Research, Morningstar, June 2020; Creating Value: Benefits to Investors, The International Integrated Reporting Council, 2017; and Realizing the Benefits: The Impact of Integrated Reporting, The International Integrated Reporting Council and Black Sun PLC, 2015.
Purpose Beyond Profit: The Value of Value—Board Level Insights, Association of International Certified Professional Accountants (AICPA), International Integrated Reporting Council (IIRC) and Black Sun PLC, 2018.
For an in-depth discussion of this mixture of recent progress and persisting fragmentation, see Mapping the Sustainability Reporting Landscape: Lost in the Right Direction, Association of Chartered Certified Accountants (ACCA) and Climate Disclosure Standards Board (CDSB), 2016.
World Economic Forum International Business Council, Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation, September 2020.
These statistics are drawn from Carrots and Sticks: Global Trends in Sustainability Reporting Regulation, KPMG International, GRI, United Nations Environment Programme (UNEP) and The Centre for Corporate Governance in Africa, 2016.
Carrots and Sticks: Sustainability Reporting Policy—Global Trends in Disclosure as the ESG Agenda Goes Mainstream, GRI and University of Stellenbosch Business School, July 2020, p. 17.
IOSCOsteps up its efforts to address issues around sustainability and climate change, International Organization of Securities Commissions (IOSCO), April 14, 2020.
See “IOSCO sees an urgent need for globally consistent, comparable, and reliable sustainability disclosure standards and announces its priorities and vision for a Sustainability Standards Board under the IFRS Foundation,” February 24, 2021 https://www.iosco.org/news/pdf/IOSCONEWS594.pdf, and “IOSCO elaborates on its vision and expectations for the IFRS Foundation’s work towards a global baseline of investor-focussed sustainability standards to improve the global consistency, comparability and reliability of sustainability reporting,” June 28, 2021, https://www.iosco.org/news/pdf/IOSCONEWS608.pdf
METI Ministry of Economy, Trade and Industry. “Ito Review of Competitiveness and Incentives for Sustainable Growth—Building Favorable Relationships between Companies and Investors”. Final Report, August 2014. https://www.meti.go.jp/english/press/2014/pdf/0806_04b.pdf
Navigating the landscape: A path forward for sustainability reporting, Reporting Matters 2019, WBCSD and Climate Disclosure Standards Board (CDSB), pp. 12–14.
Principles for a Purposeful Business: How to deliver the framework for the Future of the Corporation, British Academy, 2019, pp. 16–17. See also, Reforming Business for the 21st Century: A Framework for the Future of the Corporation, British Academy, 2018.
TCFD Implementation Guide: Using SASB Standards and the CDSB Framework to Enhance Climate-Related Financial Disclosures in Mainstream Reporting, CDSB and SASB, 2019.
