Some sort of harmony in the sustainability standards area could be on the verge of breaking out, if a series of recent announcements are anything to go by.
In the acronym-heavy world of responsible investment, it can be easy to lose track of the range of the sometimes – to the casual observer – confusing and apparently rival sustainability standards that are available.
But an announcement last month that the Sustainability Accounting Standards Board (SASB) has signed a ‘memorandum of understanding’ with the CDP, the environmental data body formerly known as the Carbon Disclosure Project, is just the latest sign that sustainability standards setters are increasingly on the same page.
SASB, which is developing standards for industries that can be used in Securities and Exchange Commission filings, has a three-year agreement that will see it work with the CDP’s Climate Disclosure Standards Board (CDSB) offshoot which will focus on integrating sustainability information into mainstream corporate reporting.
Under the agreement, SASB will utilize CDP’s data as evidence for determining the materiality of climate change-related issues in more than 80 industries. SASB will also receive technical assistance in referencing CDSB’s Climate Change Reporting Framework for disclosure of climate change-related information. CDSB will in turn reference standards developed by SASB.
The SASB–CDP accord coincided with a similar arrangement announced between the CDP and the Global Reporting Initiative, the body behind the Sustainability Reporting Framework.The pair will work to “align areas of their reporting frameworks” and promote the harmonization and clarification of corporate sustainability reporting guidelines, standards and frameworks.
The GRI has also signed a new agreement with the UN Global Compact, the corporate sustainability initiative.
Earlier, in March, the GRI and the International Integrated Reporting Council (IIRC), which promotes combined sustainability and financial reporting, committed to deepening their cooperation “to transform the future of corporate reporting”. The GRI was a co-founder of the IRRC.
SASB itself also has recently announced that the World Business Council for Sustainable Development (WBCSD) has joined its Advisory Council.
SASB says that harmonizing its standards with existing disclosure standards avoids additional costs for companies and aligns SASB’s work with global corporate transparency efforts. It publishes a table showing how the varying bodies’ standards complement each other.
The latest developments can only be a welcome sign that coherence is at least on the agenda. In addition, it’s also likely that further cooperative agreements are already in the pipeline. So watch this space for further signs of harmony.
Recent sustainability standards agreements: