A two-year “Better Alignment Project” has been jointly introduced by the participants of Corporate Reporting Dialogue, which is an initiative aiming to bring together the setters of various international corporate reporting standards and frameworks to improve on coherence, consistency and comparability in the field.
With the launch of the new project, leaders from different profound framework- setting organizations hope to promote alignment and integration of different standards for preparing sustainability and non-financial reports. They are going to associate various sustainability standards and frameworks to find out their commonalities and differences, so as to make refinements regarding the overlap of data in different frameworks while still attending to different focuses, audiences and government procedures.
It is expected that the new project can help identify the correlation between non- financial metrics and financial outcomes, so that they can be incorporated into mainstream reports. Another focus of the project would be improving reporting from a multi-capital perspective, hence allowing companies to make efficient decision on the allocation of capital to address the ever-changing risks and opportunities.
According to Ian Mackintosh, Chair of Corporate Reporting Dialogue, since some of the elements in the corporate reporting system are unable to work as harmoniously as possible, companies may find themselves following conflicting objectives under disjointed definitions with unclear aims when preparing corporate reports. Therefore, in order to cope with the problem of reporting fatigue, reduce burden and increase effectiveness of corporate reporting, there is an urgent need for the alignment of reporting standards.
Curtis Ravenel, Global Head of Sustainable Business and Finance, Bloomberg, also points out that under the increasing demand and requirement for transparent disclosure in corporate reporting, organizations always need to adopt various frameworks and standards, so it is crucial to ensure clear, succinct and effective communication between companies and the market through alignment in the corporate reporting system.
In short, the dialogue participants have put much efforts in the promotion of corporate reporting. Apart from the alignment project, they have introduced a Statement of Common Principles of Materiality, proposed a common landscape map, and agreed to support and promote the recommendations of the Financial Stability Board Task Force on Climate-related Financial Disclosure (TCFD). It is hoped that the leading organizations can work jointly to bring forth comprehensive and harmonious frameworks in corporate reporting.
