Technical representatives from the International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI) met in May to begin work on delivering the agreed MoU.
The MoU, announced in March, commits the two organisations to seeking to coordinate work programmes and standard-setting activities. The IFRS Foundation and GRI recognise the need to further harmonise the sustainability reporting landscape at an international level. IFRS Sustainability Disclosure Standards and GRI Standards can be viewed as two interconnected reporting pillars that address distinct perspectives, which can together form a comprehensive corporate reporting regime for the disclosure of sustainability information.
In May, technical representatives from both organisations outlined activities that could provide the necessary clarification and alignment. Among the initiatives discussed were:
- An agreed schedule of meetings and roadmap to advance technical aspects of the collaboration.
- A mapping exercise to establish those requirements in the ISSB’s General Requirements and Climate Exposure Drafts that are equivalent with GRI Standards in order to guide an exercise on alignment of disclosures, guidance, concepts and definitions.
- A comparison exercise of ISSB’s General Features and Qualitative Characteristics of Information in the General Requirements Exposure Draft with GRI 1: Foundation, to identify scope for alignment or explanation of differences.
- The development of a methodology to cross-reference between guidance and other materials produced by GRI and ISSB respectively in order to maximise usefulness to preparers of information.
- An examination of future priorities to maximise joint standard-setting and guidance development activities, where the same or similar information requirements exist.
- The development of a full articulation of the ways in which the standards developed by GRI and ISSB respectively are complementary or diverge, together with explanations.
- GRI staff outlined initial directions of their proposed feedback to the consultation by the European Financial Reporting Advisory Group (EFRAG) on the EU Sustainability Reporting Standards (the GRI response subsequently published on 20 June).
Emmanuel Faber, Chair of the ISSB, said:
The ISSB is committed to creating a global baseline of reporting standards that meet the needs of investors. Our collaboration with GRI will bring clarity to the market on how our two sets of standards can interact to provide a comprehensive and seamless suite of reporting standards that meet the needs of broader stakeholders, while streamlining the process for companies.
This first meeting of our technical teams has been truly encouraging and I look forward to our continued collaboration.
Eelco van der Enden, CEO of GRI, said:
The collaboration between GRI and the ISSB is significant because it reflects that both organisations value the importance of working together to align our sustainability-related standards. I believe this will not only give companies greater clarity on reporting expectations, it can ultimately improve the quality and relevance of reporting data. I therefore welcome the progress achieved under our MoU so far.
These outcomes are tangible first steps towards achieving the global, interconnected two-pillar system for corporate reporting, as envisaged through the MoU, which reflects the distinct yet equal importance of financial and impact materiality in sustainability reporting. We look forward to continuing to collaborate with the IFRS Foundation and the ISSB in support of this aim.
The requirements established by the ISSB are subject to the IFRS Foundation’s due process. Similarly, approval by the GRI Global Sustainability Standards Board will be needed before any of these outcomes are implemented.
