June 25, 2021

ESG Disclosure Gets Easier? Merger of 2 Big Players Could Spur Harmonization

The merger between the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) has now closed – and the combined organization will now be known as the Value Reporting Foundation. The deal is an effort to simplify the ESG reporting landscape by aligning disclosure tools from two of the major players. From the press release:

The Value Reporting Foundation is a global nonprofit organization that offers a comprehensive suite of resources designed to help businesses and investors develop a shared understanding of enterprise value — how it is created, preserved or eroded over time. The resources — including Integrated Thinking Principles, the Integrated Reporting Framework and SASB Standards — can be used alone or in combination, depending on business needs. These tools, already adopted in over 70 countries, comprise the 21st century market infrastructure needed to develop, manage and communicate strategy that creates long-term value and drives improved performance.

As I blogged last fall when this merger was announced, the VRF also intends to support other organizations such as the IFRS Foundation. There seems to be an acknowledgement that there are too many players in the “reporting framework” space right now. That makes it difficult for companies to determine what’s important to disclose and difficult for investors to compare disclosures.

The Value Reporting Foundation may have more global reach & influence than the IIRC or SASB had on their own – with SASB gaining a lot of acceptance in the US but not oversees, and the inverse being true for IIRC. Michael Bloomberg, who is the chair of the TCFD and who has been a SASB supporter since its early days, is also a Chair Emeritus of the new organization. It remains to be seen whether or how any of these standards will get adopted by national regulators.

All of the existing resources from the IIRC and SASB remain available on their websites for now – but you can also visit the new VRF website for more tools.

Liz Dunshee