Introducing the Value Reporting Foundation: SASB and IIRC merge to give ESG reporting a trim

Merger of bodies aimed at harmonisation

The Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) will merge in mid 2021 to create the Value Reporting Foundation, in a move towards the long-awaited harmonisation of ESG reporting standards on the back of pressure from regulators, investors and stakeholders.

SASB was founded in a garage by entrepreneur Jean Rogers in 2011 and during the last few years it started an internationalisation process to overcome its perceived identity as a US-centric standard setting body. 

A milestone in this process was its internal governance reform (to mimic the structure of a standard-setting body) and subsequent reshuffle, although it was alleged at the time that such development was at the cost of its research clout. See RI coverage here and here

The IIRC was set up a year earlier and its Integrated Reporting framework helped kickstart the reform of corporate reporting, based on the idea that traditional financial reporting was not capturing how companies generated value in the long run. 

The pair are now combining their respective standards and framework, which they see as complementary. The Value Reporting Foundation will be headquartered in London and San Francisco. Janine Guillot, SASB’s CEO, will be the CEO of the Foundation. 

SASB and IIRC are also part of an alliance called Statement of Intent To Work Together Towards Comprehensive Corporate Reporting, which also includes the Global Reporting Initiative (GRI), Climate Disclosure Standards Board (CDSB) and CDP. That alliance is coordinated by the Impact Management Project.

The GRI said in a statement: “GRI was a co-founder of the IIRC and sees integrated reporting and disclosing impacts on value creation as complementary to sustainability reporting. Furthermore, GRI earlier this year launched a joint workplan with SASB that aims to share best practices and case studies demonstrating how they can be used together.”

The alliance came on the heels of the Corporate Reporting Dialogue (CRD), which includes the International Accounting Standards Board (IASB), its US counterpart Financial Accounting Standards Board (FASB) as an observer, and the International Organization for Standardization (ISO). 

The IASB has also become closer to the sustainability reporting space. Following last year’s comments by the IASB Chair, Hans Hoogervorst, recommending all these initiatives and bodies to merge to “create a less chaotic world”, the IFRS Foundation is mulling the creation of its own Sustainability Standards Board.