The International Integrated Reporting Council (IIRC) welcomes the multi-capital approach outlined in proposals announced this week for an EU Corporate Sustainability Reporting Directive, which recognize the importance of intangible assets and relationships for value creation, putting sustainability disclosure on an equal footing with financial information. The proposals will help businesses provide decision-useful, reliable and comparable information.
The proposals also emphasize the importance of integrating sustainability and financial information within management commentary, inline with the IIRC’s focus on the vital importance of connectivity of information to drive real behavioural changes in the way businesses operate.
With efforts ongoing globally to drive convergence, including via the IFRS Foundation’s Working Group and IOSCO’s Technical Expert Group led by the US Securities and Exchange Commission and the Monetary Authority of Singapore, we welcome the European Union‘s statement that it “fully supports” the ambition to achieve worldwide convergence and harmonization of sustainability reporting standards.
The European Union refers to the IIRC in its commitment to “take account of existing standards and framework” a move welcomed by the IIRC, which stands ready to work closely with the European Union to drive effective, robust reporting.
Commenting, Charles Tilley, CEO, IIRC said:
“Combined with the Taxonomy Regulation, Sustainable Finance Disclosure Regulation and upcoming Renewed Sustainable Finance Strategy, the European Union is providing global leadership as it works towards sustainable decision making in the EU.
“Proposals to require forward-thinking disclosure over short, medium and long-term timescales, for the mandatory audit of information with limited assurance to build credibility, and to build in the integration and connectivity of information, all demonstrate that the European Union is serious about driving robust reporting that delivers sustainable development. We believe that the leadership shown by the EU in these proposals can help raise the quality of reporting globally, and we look forward to working with the European Commission as they develop their proposals to address value creation in a multi-capital and multi-stakeholder environment.”