Certainly, here are questions to be addressed. The focus on enterprise value creation is key, but there should be a link to societal impacts – how should the two ‘talk to each other’? Materiality is another complex question. Should disclosures only be mandatory when something is deemed to be financially material? The concept of ‘dynamic materiality’ has been gaining currency – recognizing that, while an issue may not be material right now, it could become so over time as regulatory requirements change, global conditions evolve, or consumer behaviors and attitudes shift. This is an area to watch.
As my colleague Mark Vaessen raised, ”there will be an assurance need too. Information reported must be robust and reliable.” KPMG will continue to contribute to discussions and debate being led by the IAASB as they provide further guidance on ESG assurance.
It is hoped that a final determination about the SSB could be made in advance of COP26 in November. These are exciting times that offer the prospect of a new era for corporate reporting. I look forward to seeing the continued momentum and support for the IFRSF on this initiative.
To close, I couldn’t say it better than Larry Leva when he commented, “high quality sustainability reporting standards can help drive better decisions by investors, companies and policy makers. For sustainability issues such as climate and environmental reporting in particular, we need high quality global standards to address what is clearly a global issue.”
Do you have an opinion on the development of global sustainability standards? Share your thoughts with us!