New York, 24 September 2019 - The Corporate Reporting Dialogue – an initiative bringing together the major standard setters and framework providers globally – released a report today showing high levels of alignment between the frameworks on the basis of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. As part of the Dialogue’s Better Alignment Project, CDP, the Climate Disclosure Standards Board (CDSB), the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) collaborated intensively to assess alignment on the TCFD’s disclosure principles, recommended disclosures and illustrative example metrics.
The report was launched amongst businesses and investors at the World Economic Forum’s Sustainable Development Impact Summit, during Climate Week NYC, reaffirming the Dialogue participants’ commitment to respond to the urgent need to resolve the barriers to effective climate reporting.
Entitled “Driving Alignment in Climate-related Reporting”, the publication maps the Better Alignment Project participants’ standards and frameworks against the seven principles for effective disclosure, the 11 recommended disclosures and 50 illustrative example metrics detailed in the TCFD recommendations. It also documents the commonalities and differences between the Dialogue participants within the parameters of the TCFD recommendations’ example metrics.
The results of the technical mapping provide a practical guide to assist organizations in understanding and implementing the TCFD recommendations when using the participants’ well-established and globally applicable frameworks and standards.
The mapping showed strong alignment between the participants’ frameworks and standards and the TCFD recommendations, specifically:
- The TCFD’s seven ‘Principles for Effective Disclosures’ are harmonious and complementary with those of the participants’ frameworks and standards, with the mapping showing no sources of conflict.
- The participants are well-aligned with the TCFD’s 11 recommended disclosures, each of which is comprehensively covered by the frameworks and standards.
- Overall, 80% of the TCFD's 50 illustrative metrics are fully or reasonably covered by CDP, GRI and SASB indicators.
- There are high levels of alignment between CDP, GRI and SASB for the TCFD’s illustrative example metrics, with 70% of the TCFD’s 50 metrics showing no substantive difference between the participants’ indicators. For the remaining 15 indicators, substantive differences are limited.
Ian Mackintosh, Chair of the Corporate Reporting Dialogue, commented: “This report is the first deliverable of the Better Alignment Project and I am delighted with the results presented. The actual alignment of the frameworks against the TCFD recommendations and between the frameworks is much higher than may have been envisaged prior to the start of the project.
The connections and cooperation between the operational teams of the framework organizations have developed significantly. This has not only led to a much deeper understanding of each other’s frameworks, but also has proven to be a strong basis for future work.
Relationships with critical senior stakeholders have also intensified. To me, it means that the Better Alignment Project has set the ground for a long-lasting change in the reporting landscape.”
Experts from CDP, CDSB, GRI, IIRC and SASB will review the Better Alignment Project report in interactive webinars on 10 October 2019 (repeated 8am / 4pm UK time). Webinar participants will be invited to share their views on the report and engage with the experts to ensure that the work of the Corporate Reporting Dialogue remains grounded in the needs of the market.
Notes for editors:
The Better Alignment Project report will be presented at two webinars on 10 October 2019. Participants must register for the webinars in advance to gain access.
The report publication follows a technical mapping effort and a global stakeholder consultation, including an online survey and a series of global roundtables, held in 11 countries. Around 250 stakeholders, including businesses and investors, were consulted on how to support effective disclosures, addressing the TCFD recommendations, and identifying how non-financial metrics relate to financial outcomes and how this can be integrated in mainstream reports.
Consultation findings reaffirmed a call from the market to unravel and solve inconsistencies in metrics for climate change reporting. Further consultation findings included calls for the relationships, interconnections and alignment between participants’ frameworks and standards to be better articulated to the market as well as confusion over the differing definitions of materiality between the frameworks and standards. The frameworks and standards have worked on a set of frequently asked questions, included in the report, that articulate the use of the frameworks in conjunction with each other for effective reporting.
The Better Alignment Project is a ground-breaking two-year project, launched in November 2018, to drive better alignment of sustainability reporting frameworks, as well as with frameworks that promote further integration between non-financial and financial reporting. The aim is to make it easier for companies to prepare effective and coherent disclosures that meet the information needs of capital markets and other stakeholders in society.
The Corporate Reporting Dialogue is an initiative, convened in June 2014 by the International Integrated Reporting Council, designed to respond to market calls for greater coherence, consistency and comparability between corporate reporting frameworks, standards and related requirements.
Further information about the project can be found on the Corporate Reporting Dialogue website.
Media contact: Zara Maung, Communications Associate, IIRC
Contact via email: [email protected] or telephone: +44 207 504 2575
Participants of the Corporate Reporting Dialogue Better Alignment Project:
CDP is an international non-profit that drives companies and governments to reduce their greenhouse gas emissions, safeguard water resources and protect forests. Visit www.cdp.net or follow @CDP to find out more.
Climate Disclosure Standards Board (CDSB) is an international consortium of business and environmental NGOs, committed to advancing and aligning the global mainstream corporate reporting model to equate natural capital with financial capital. Visit www.cdsb.net or follow @CDSBglobal for more information.
Global Reporting Initiative (GRI) is an international independent organization that has pioneered corporate sustainability reporting since 1997. GRI helps businesses, governments and other organizations understand and communicate the impact of business on critical sustainability issues such as climate change, human rights, corruption and many others.
International Integrated Reporting Council (IIRC) is the convenor of the Corporate Reporting Dialogue. It is a global coalition of regulators, investors, companies, standard setters, the accounting profession and NGOs. The coalition is promoting communication about value creation as the next step in the evolution of corporate reporting. Visit www.integratedreporting.org or follow @theiirc
Sustainability Accounting Standards Board (SASB) is an independent standard-setting organization that develops and maintains robust reporting standards that enable businesses around the world to identify, manage and communicate financially material sustainability information to their investors. SASB standards are evidence based, developed with broad market participation, and are designed to be cost-effective for companies and decision-useful for investors. To download any SASB industry-specific standards, or learn more about SASB, please visit www.SASB.org.
Additional participants in the Corporate Reporting Dialogue:
International Accounting Standards Board (IASB) The IFRS Foundation is a not-for-profit international organisation responsible for developing a single set of high-quality, global accounting standards, known as IFRS Standards. IFRS Standards are now required in over 140 jurisdictions, with many others permitting their use.
International Organization for Standardization (ISO) is an independent, non-governmental international organization with a membership of 163 national standards bodies each of which represent the stakeholders in their countries. Through its members, it brings together experts to share knowledge and develop voluntary, consensus-based, market-relevant International Standards that support innovation and provide solutions to global challenges.
Financial Accounting Standards Board (FASB) (FASB participates as an observer) is the independent, private-sector, not-for-profit organization that establishes financial accounting and reporting standards for public and private companies and not-for-profit organizations that follow Generally Accepted Accounting Principles (GAAP).