Sustainability disclosure bodies seek ‘common voice’ as FSB taskforce ramps up

Corporate Reporting Dialogue aims for “aligned and rationalized” standards

Eight leading sustainability reporting and accounting bodies such as the CDP and the International Accounting Standards Board (IASB) have come together in an initiative called the Corporate Reporting Dialogue to find a “common voice” on areas of mutual interest and engage with regulators.

It comes as the high-level Financial Stability Board (FSB) is set to issue what Bank of England Governor Mark Carney called today a “stock take” of the existing climate disclosure initiatives.

The bodies signed up to the dialogue also include the Climate Disclosure Standards Board, the Global Reporting Initiative, the International Integrated Reporting Council, the International Organization for Standardization (ISO) and the Sustainability Accounting Standards Board.

The group has issued a statement on the common principles of materiality in corporate reporting. A notable absentee is the US-based Financial Accounting Standards Board (FASB), which is doing its own work on materiality. “Therefore, it cannot commit to the Dialogue’s foundational principle of materiality before the outcomes of its current project are finalized,” the bodies said. As reported by RI, FASB’s work in this area has come under sharp criticism from investors convened by the Securities and Exchange Commission.

The Corporate Reporting Dialogue initiative, which is chaired by Huguette Labelle, the retired Canadian civil servant who chairs Transparency International, aims to identify how the various frameworks and standards “can be aligned and rationalized”.It will also share information, and “express a common voice on areas of mutual interest, where possible, to engage key regulators”.

Labelle said: “It is not possible to establish a ‘one size fits all’ quantified definition of materiality – in many countries it is a legal concept with established definitions.”

It all comes as the FSB has somewhat set the cat amongst the pigeons in the sustainability disclosure sector by creating the Michael Bloomberg-led Task Force on Climate Disclosures (TFCD). The task force issues its first report tomorrow (April 1).

The first formal meeting of the Task Force, held at Bloomberg’s London offices last month, heard presentations from a variety of bodies in what some who were present likened to a series of pitches.

Carney, the driving force behind the TFCD, said today that the body’s first report takes a “stock-take of existing initiatives”. Speaking to journalists from Tokyo, where the FSB was in plenary session, he said that just around a third of issuers provide comparable and reliable data related to climate “notwithstanding” the approximately 400 disclosure initiatives already in place.

Carney stressed the voluntary nature of the task force, but said its aim is to produce recommendations “that are such a high standard that they will achieve buy-in across the G20, issuers, investors and credit providers”. He made an analogy with the Enhanced Disclosure Task Force which looked at banks and where “buy-in was nearly complete”.