SASB and IIRC merge to form Value Reporting Foundation

TWO organisations behind corporate reporting frameworks have merged to form the Value Reporting Foundation (VRF), with the goal to provide clarity and simplicity in the corporate reporting landscape.

The merger of the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) will combine the resources of the organisations, and allow them to continue to drive progress towards a more coherent and comprehensive corporate reporting system, said Janine Guillot, chief executive officer of VRF, on Thursday.

"We aim to help businesses and investors develop a shared understanding of drivers of enterprise value and how value is created, preserved or eroded over time," she said during a press briefing.

The VRF would support business and investor decision making with its three key tools: Integrated Thinking Principles, Integrated Reporting Framework and SASB Standards.

Ms Guillot said that the Integrated Reporting Framework and SASB Standards, which are focused on external reporting, are already complementary tools, with close alignment, and many companies already use these together. "We believe that we can fully harmonise those over time to make it easier for companies to prepare an integrated report using the SASB standards."

She noted that sustainability disclosures serve a broader array of stakeholders than traditional financial disclosures, including employees, customers and civil society. She added that such issues transcend international borders, but different jurisdictions around the world have unique regulatory mandates and legal frameworks governing corporate disclosure.

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"Simplifying the (environmental, social and governance) ESG disclosure landscape, which both companies and investors decry as the alphabet soup is complex, but it isn't impossible."

Ms Guillot said the solution would be to have a "building block approach", where one building block is a baseline set of global standards - which focuses on how sustainability issues impact enterprise value - that are targeted at disclosure to investors and other providers of capital.

"This building block would be focused on meeting the baseline information needs of global capital markets, and we believe the resources that have been developed by both the IIRC and SASB over the last 10 years can contribute to that solution under the auspices of the IFRS Foundation (International Financial Reporting Standards Foundation)," she said.

The IFRS Foundation has announced preliminary plans to develop an international sustainability standards board, and Ms Guillot said the VRF is participating in the technical readiness working group on plans for this.

In a statement on the VRF's website, the Singapore Exchange Regulation said: "This merger presents an opportunity to progress towards greater unification of reporting frameworks and standards. This will benefit companies and investors; reporting could become simpler for companies, and investors may enjoy enhanced data comparability."