The Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) have confirmed they have completed their merger to create the new Value Reporting Foundation (VRF).
Janine Guillot, the chief executive officer of the newly formed VRF, said: “Businesses and investors have long asked for more clarity and more simplicity in the corporate reporting landscape. Our merger is a direct response to this call.
“[T]he merger also better positions us to support key bodies such as the IFRS Foundation to work with our colleagues around the world to drive toward a more comprehensive corporate reporting system.”
Ilmi Granoff from the ClimateWorks Foundation added: “The Value Reporting Foundation will accelerate progress towards a global, standardised, comparable and comprehensive corporate reporting system.
“It will enable businesses to take climate and human capital better into account, improving environmental, economic and social outcomes.”
The merger of the two organisations is intended to simplify the sustainability reporting requirements for listed companies and reduce the number of overlapping and competing sustainability reporting frameworks.
The SASB and IIRC first announced their intention to join forces last year and since then have worked to hammer out the fine details of the merger.
Speaking in November, IIRC CEO Charles Tilley said one of the aims of merging with the SASB was to “harmonise the top level structure so that the way the integrated reporting framework around capitals and SASB standards work together and are more aligned to have a common, top down framework.”
The SASB and the IIRC, together with the Global Reporting Initiative (GRI), the Carbon Disclosure Project (CDP), and the Climate Disclosure Standards Board (CDSB), make up what is often referred to as the Group of Five or The Alliance.
Last year, the group unveiled a prototype global sustainability reporting framework.
Its members described the framework as complementary to the IFRS Foundation’s recent interest in sustainability reporting and the EU’s sustainable finance taxonomy.
The launch of the new VRF coincides with calls for the IFRS Foundation to tackle sustainability reporting.
The proposal has drawn strong support from the regulatory community and from potential users of those standards, with constituents urging the Foundation to leverage off the SASB’s existing standards.
In addition, the European Commission has been active in the arena of sustainability reporting through the development of its Corporate Sustainability Reporting Directive proposal and the Sustainable Finance Disclosure Regulation.
Meanwhile, the US Securities & Exchange Commission has invited public consultation on climate disclosure while signaling a new willingness to engage globally on sustainability issues.
The IIRC framework is based on the premise that an organisation relies on six so-called capitals for success – financial, manufactured, intellectual, human, social, and natural capital.
From this starting point, Integrated Reporting sets out to produce an analysis of the organisation’s value-creation process.
The SASB has developed a suite of industry-specific standards focused on a number of ESG issues that aim to provide companies with a framework for discussing the financial impact of sustainability on their business.
One of the objectives of the new VRF will be to eliminate differences in the way in which the two frameworks use similar-sounding terminology.
Another priority for the VRF, CEO Janine Guillot said, will be to support the work of key bodies such as the IFRS Foundation.