The International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) are planning to merge, the organisations have announced.

They said the merged organisation, to be called the Value Reporting Foundation, could eventually integrate “other entities focussed on enterprise value creation”.

The Value Reporting Foundation and the Climate Disclosure Standards Board (CDSB) had jointly signalled interest in entering into exploratory discussions in the coming months, they said.

When formed by mid-2021, the merged organisation is to be led by Janine Guillot, currently CEO of SASB. Charles Tilley, CEO of IIRC, will serve as senior advisor, partnering with Guillot on the integration of the two organisations.

According to SASB and the IIRC, the SASB standards and the IIRC’s “<IR> Framework” will remain complementary tools, but the Value Reporting Foundation “will facilitate the use of both together”.

Their merger announcement comes amid a flurry of activity centred on reducing fragmentation in the field of corporate sustainability reporting, not least a move by the European Commission to initiate work on a possible non-financial reporting standard.

In September the IIRC and SASB came together with three other major sustainability reporting standard- and framework setters to outline how they could form the basis of a comprehensive corporate reporting system, and today they said their merger would advance the quintet’s work.

Janine Guillot, Charles Tilley

Janine Guillot of SASB and Charles Tilley of the IIRC

“This merger is a significant advancement towards building a comprehensive system of corporate reporting, as we work to ensure integrated reporting and sustainability disclosure have the same level of rigour as financial accounting and disclosure,” said Tilley.

Guillot said: “Sustainability disclosure is at the top of the agenda for many, creating incredible momentum towards simplifying the corporate reporting landscape.

“By merging two organisations 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.”

The Global Reporting Initiative (GRI) was a co-founder of the IIRC and said it welcomed the news of the merger.

“For a sustainable future, companies need to take responsibility for their impacts on the world,” said chair Eric Hespenheide. 

”Understanding the financial risks related to these sustainability impacts on a company’s bottom line and value creation are critical for providers of financial capital. The formation of the Value Reporting Foundation represents a significant step towards a better representation of sustainability related risks in financial reporting.”

He added: “I am looking forward to working with the Value Reporting Foundation on advancing corporate transparency.”

In contrast to the SASB standards and the CDSB framework, the GRI’s standards are developed in the public interest and focus on information describing companies’ impacts on the economy, the environment or people.

The SASB standards and CDSB framework have a different perspective on sustainability information, focusing exclusively on sustainability-related aspects’ impact on companies. The organisations refer to information that is material for enterprise value creation. 

Both perspectives combined are known as “double materiality”.

Last week SASB’s Investor Advisory Group (IAG), comprising 55 major asset owners and asset managers, updated its founding statement to call for SASB-based disclosure as a foundation of corporate sustainability reporting to investors.

Richard Sexton of the IIRC and Robert Steel of SASB are to co-chair the board of the Value Reporting Foundation. Mary Schapiro and Helen Brand will serve as vice-chairs. 

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