November 7, 2018
Published: The Accountant
A number of major corporate reporting bodies and standard setters have launched a two year project to drive better alignment in the corporate reporting landscape.
As part of the project, Corporate Reporting Dialogue (CRD) participants have committed to driving better alignment of sustainability reporting frameworks, as well as with frameworks that promote further integration between non-financial and financial reporting.
It was launched simultaneously at the Bloomberg Sustainable Business Summit in London and in Sydney, during the World Congress of Accountants 2018 (WCOA 2018).
A poll of audience members at a WCOA 2018 panel on framework alignment demonstrated the need to bring together the frameworks. They were asked the question: ‘Do you find, either as a preparer or as a user of reports, the corporate reporting landscape easy to navigate?’
Almost three quarters of responses, coming from a variety of nationalities and organisations, but all in professions related to accountancy, answered no. The remaineder either answered either yes or ‘no opinion’.
The CRD was launched four years ago as a means of encouraging dialogue between various framework providers. It comprises of the Climate Disclosure Standards Board, the Financial Accounting Standards Board*, the Global Reporting Initiative, the International Accounting Standards Board, the International Organisation for Standardisation, the Sustainability Accounting Standards Board, and is convened by the International Integrated Reporting Council.
Speaking at the WCOA 2018, CRD chair Ian Mackintosh described the project as: “A paradigm shift towards the integration of financial and non-financial information.
“The aim is to combat reporting fatigue and reduce the burdens. To enable effective reporting, to manage better pricing in of ESG related externalities by financial markets, and to drive long term efficient allocation of capital. To align the markets with changing nature of risks and opportunities.
“This project will have a ‘kick off’ meeting on the 20th November, and we are looking initially at a two year period.
“We are very excited about this. The CRD does not have its own bank account, it does not have its own constitution. It is very much a working group together. This should be a step forward change in how it operates and what it achieves.”
Bloomberg Philanthropies will be providing funding for this project.
Through this new project, participants will map their respective sustainability standards and frameworks to identify the commonalities and differences between them, jointly refining and continuously improving overlapping disclosures and data points to achieve better alignment, taking into account the different focuses, audiences and governance procedures. Participants will identify how non-financial metrics relate to financial outcomes and how this can be integrated in mainstream reports.
In a statement, Mackintosh added: “The different elements of the corporate reporting system are not working as harmoniously as possible, with the result being that corporate reporting can be seen to pursue conflicting objectives, under disjointed definitions with unclear aims.
“There is a renewed urgency to drive better alignment that can combat reporting fatigue, reduce burden and enable more effective corporate reporting. Today, the participants of the Corporate Reporting Dialogue have made clear their commitment to delivering this.”