The number of frameworks and standards in the environmental, social and governance (ESG) space can be overwhelming. While various organizations have set up different standards and frameworks, last year five of them — the Sustainability Accounting Standards Board (SASB), the International Integrated Reporting Council (IIRC), the Global Reporting Initiative (GRI), the Climate Disclosure Standards Board (CDSB), and the Carbon Disclosure Project (CDP) — announced plans to harmonize their standards and frameworks to provide more consistency. (See our blog post for additional information on this initiative).
In December 2020, this “group of five” published a prototype climate-related financial disclosure standard that illustrates how the concepts from their joint paper can be applied to climate disclosure and consolidates content and metrics into a single, practical guide. Notably, the publication of the prototype coincided with the fifth anniversary of the Paris Agreement.
SASB and IIRC
SASB and the IIRC also announced plans to combine under the oversight of a new organization to be called the Value Reporting Foundation. The official merger was formalized just this month. The merger of two entities focused on enterprise value creation represents meaningful progress toward simplifying ESG reporting.
SASB and GRI
Another effort to promote clarity in the sustainability disclosure landscape is the SASB and GRI collaborative work plan announced last year. The purpose is to show how companies can use both sets of standards together. Many companies use both SASB and GRI standards to meet the needs of their audiences, which provide complementary standards for sustainability information.
The first deliverable, A Practical Guide to Sustainability Reporting Using GRI and SASB Standards, was published in April 2021 and shows how companies are using the two sets of standards together. It provides reporting entities with insights from peer companies to support their sustainability reporting and disclosure journeys.
While the number of standard setters and efforts to consolidate seem overwhelming, the end goal is the same –practical, universal standards in the ESG space. The progress described in this post is only a sample of the intense efforts to simplify and globalize the ESG landscape.
If you have any questions regarding any of the topics covered in this blog post, please feel free to email the author directly or, if applicable, contact your primary Bass, Berry & Sims relationship attorney.
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