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This is an unprecedented and much awaited move towards cooperation by the 5 leading global organisations on sustainability and integrated reporting. We encourage all stakeholders working together on advancing comparable and consistent NFI reporting. As EC Executive Vice President Dombroviskis stated: “the EU cannot develop such [non-financial reporting] standards alone, (… )the best and most widely accepted elements of existing standards and frameworks will be our starting point(..) to build on […] to the greatest possible extent”.
We support the much-welcomed EU leadership to move towards one reporting solution, and we recognise intermediate steps may be needed.
Cogito project: Harmonising NFI frameworks and connecting with financial reporting
In September 2017 we already called for coordination between the hundreds of NFI reporting initiatives. The Cogito project Interconnected standard setting for corporate reporting (December 2019) made the case for a system change: NFI and financial reporting should be connected, and the different NFI reporting initiatives should be consolidated to create a core set of NFI metrics. The Cogito paper also builds on the double materiality perspective (the materiality of material environmental and social impacts dependencies on companies’ finances, as well as the material companies’ impacts on people and planet) that the EC supports. Our feedback analysis summarised the overwhelmingly positive feedback for this vision received from 40+ stakeholders.
5 bodies progressing towards a comprehensive corporate reporting system
We commend the 5 bodies’ true tone of collaboration and their focus on connecting with other key stakeholders. The statement clearly echoes a need for system change. It also rightly sets out how complex it can be to reflect different user needs in NFI disclosures.
As the Cogito paper also proposed, the 5 bodies set out how their work can sustain creating one set of NFI standards that responds to investors’ and broader stakeholders’ needs and enables a connection to financial standards through the <IR> Framework. It aligns with the Cogito’s expanded materiality lens consideration when these organisations outline how their standards and framework complement each other and can be used to report different aspects of NFI.
Accountancy Europe will keep leveraging the European profession’s expertise to progress the global stakeholder debate on corporate reporting.
Read the joint statement here