Posted on Tuesday, December 15, 2020

Five framework- and standard-setting institutions have come together to make a commitment to working towards a comprehensive corporate reporting system for ESG standards. GRI, SASB, CDP and CDSB set the frameworks and standards for sustainability disclosure, including climate-related reporting, along with the TCFD recommendations. In September 2020, the group published a statement of intent.

In December 2020, they published a follow up document, Reporting on Enterprise Value. The executive summary highlights the goals of the report as follows:

In this paper, we provide an important step towards our vision. We demonstrate how certain components of our current frameworks and standards, along with the recommendations set out by the Task Force on Climate-related Financial Disclosures (TCFD), can be used together to provide a starting point for the development of global standards for sustainability-related financial disclosure. The work could therefore serve as useful input for the Trustees of the IFRS Foundation, who have not been involved in the technical development of this paper, but who are currently consulting on the role that the IFRS Foundation could play by broadening its role beyond setting financial reporting standards.

Sustainability-related financial disclosure standards would enable disclosure of how sustainability matters create or erode enterprise value. This type of reporting is distinct from sustainability reporting, which is designed to illuminate a company’s most significant impacts on the environment, people and economy. We believe that sustainability reporting and sustainability-related financial disclosure must be seen as interrelated reporting concepts, with shared methodologies wherever appropriate, regardless of their distinct aims. We further explain the importance of this in Section 1. To bring the concept of sustainability-related financial disclosure to life, we provide a prototype of a climate-related financial disclosure standard. We also include a presentation standard that could inform future standards, given the relevance of other sustainability matters to enterprise value.
As these prototypes are intended to illustrate sustainability-related financial disclosure, they draw primarily from the frameworks and standards in our group that focus on reporting to providers of financial capital on how climate and other sustainability matters influence enterprise value.”




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