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Nov 25, 2020

SASB and IIRC merger to simplify sustainability disclosure

Newly formed Value Reporting Foundation will build comprehensive corporate reporting system

The Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) are to merge into one organization by mid-2021, offering investors and companies a comprehensive corporate reporting framework to drive global sustainability performance.

The newly formed Value Reporting Foundation, to be headquartered in London and San Francisco, will advance initiatives by SASB, the IIRC, the CDP charity, the Climate Disclosure Standards Board (CDSB) and the Global Reporting Initiative (GRI) to work toward a comprehensive corporate reporting system. The merger is expected to simplify sustainability disclosure.

‘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 Steel, SASB chairman. ‘This merger is an important step toward businesses and investors communicating with clarity and ease about the issues that matter most to financial performance.’

Steel and Richard Sexton of the IIRC will co-chair the new foundation’s board. Former SEC chair Mary Schapiro and IIRC board member Helen Brand will serve as vice chairs. All of the SASB’s 45 staff and the IIRC’s 25 employees are expected to remain with the new entity. The Value Reporting Foundation may also integrate other groups focused on enterprise value creation, including the CDSB.

The first key initiative to be advanced by the foundation will be its work toward a comprehensive corporate reporting system alongside partners at CDP, CDSB and the GRI.

Complementary reach

‘We also believe the two organizations have complementary reach,’ a spokesperson for the IIRC tells IR Magazine. ‘For example, the uptake of integrated reporting in America is not currently strong – around 30 organizations have adopted it, including the likes of PepsiCo, General Electric and JLL – and we hope this merger will strengthen awareness and uptake. Similarly, the IIRC has strong uptake in markets such as Japan, France, Australia and the UK where SASB is seeking to build adoption further.’

Global investors and corporates have called for a simplification of the corporate reporting landscape and for organizations to provide a clear solution for communicating about the drivers of enterprise value. Integrated reporting describes value creation topics and the approach to integrating them in corporate thought and reporting.

The IIRC is a global coalition of regulators, investors, companies, standard setters, the accounting profession, academia and NGOs. SASB connects businesses and investors on the financial impacts of sustainability. SASB’s standards are globally applicable and used by companies worldwide: of the 454 companies that have reported SASB metrics up to the end of October, 42 percent are domiciled outside the US.

GRI, an independent, international organization that helps businesses and other groups take responsibility for their impacts, co-founded the IIRC and welcomes the merger. Earlier this year, GRI launched a joint workplan with SASB to share best practices and case studies demonstrating how they can be used together.

‘We congratulate IIRC and SASB on their decision to join forces and their support of companies in producing relevant disclosures about sustainability-related value creation,’ says GRI chairman Eric Hespenheide.

‘For a sustainable future, companies need to take responsibility for their impacts on the world. Sustainability reporting is the practice by which they disclose their significant economic, social and environmental impacts. This information is critical to inform decisions for a wide range of stakeholders, ranging from employees to policy makers and from customers to investors.

‘The formation of the Value Reporting Foundation represents a significant step toward a better representation of sustainability-related risks in financial reporting.’

Caroline Byrne

Caroline Byrne is an Irish-Canadian journalist who started her career in London at the Associated Press and Bloomberg. Over the last decade, she has worked both as a freelancer and staff journalist for various organizations including Euromoney , The...